A new approach to measuring green GDP: a cross-country analysis

While the gross national/domestic product (GNP/GDP) index is a highly reliable indicator that reflects economic performance of a country, it still largely ignores the depreciation of assets, non-market economy and especially the damages to the environment caused by growth. Environmental sustainability of economic growth has come to be recognized as one of the most important pillars of sustainable growth and development. In order to tackle many challenges of the so-called green growth and sustainable development we try to build a new/alternative Green GDP indicator that should give us a clearer perspective of the consequences of economic progress by offering a new approach in quantifying the cost of ecological and environmental degradation. The indicator reviews economic growth through the environmental prism without speculating on how economic and social trends will evolve and how these developments will guide policy making in the years to come. We are well conscious that this indicator cannot ideally reflect the genuine status and improvement of national output, however, we see it as an attempt to encourage further discussions on the green growth in a diverse range of developing and developed countries. The results reveal a necessity for a new synergy between economic and environmental concepts, hence this study should be seen as an opportunity, not an obstacle for equitable and sustainable growth/development prospects.