Green Gross Domestic Product is the index of the Economic growth of a particular country which enshrines the environmental consequences of the economic growth. Simply put, Green GDP is conventional gross domestic product figures adjusted for the environmental costs of economic activities. It’s a measure of how a country is prepared for sustainable economic development. It accounts for the monetized loss of biodiversity and costs caused by climate change.
History of Environmental Accounting in India
The Central Statistics Office (CSO) had developed the Framework for the Development of Environment Statistics in 1990. So, the Compendium on Environmental Statistics began to be released from 1997. In Goa, a pilot project dealing with Natural Resource Accounting was tried in 1999-2000. After this resource accounting was conducted in 8 states. Then a Technical Advisory Committee was created in 2010 under the chairmanship of Dr Kirit Parikh to provide a Synthesis Report on the findings of the working of these accounting methods. It recommended the development of a National Accounting Matrix. Thereafter in 2011, the task of creating a green national accounts framework was taken up by a High powered expert group under Partha Dasgupta.
The environmental audit also began to be conducted by the Comptroller and Auditor General of India owing to guidelines created by the International Organization of Supreme Audit Institutions. The specialized guidelines in this regard were released in 2002. It focuses mainly on the initiative taken by the institutions to promote sustainable development and address the environmental concern. From then onwards, the audit started at the central level through the Compliance Audit and Performance Audit by the Principal Director of Audit and at the state level is being carried out by the state Accountant General. In 2013, Partha Dasgupta committee submitted its report defining the framework in such a way that the wealth of nation will be taken into account by subtracting the depletion of the natural resource. However, development of proper calculation of Green GDP is still in progress.
Environmental Accounting Process
Three steps are involved in this:
- Physical accounting of the resources, their types and their extent in terms of temporal and spatial area in states.
- Monetary Valuation to determine the tangible and intangible components.
- Integration of the net change in the resources in terms of money into the Gross Domestic Product in order to reach the value of Green GDP.