Is Green GDP Just GDP in Disguise? A Note on the Persistence of Environmentally-Adjusted National Income

This study examines whether Green GDP conveys a dynamic signal distinct from conventional GDP in terms of persistence by applying the Gaussian semiparametric local Whittle estimator to a global panel of 160 countries over the period 1970–2019. Our findings demonstrate that the cross-country mean memory parameter is 0.99 for real GDP and 0.97 for real Green GDP, with persistence estimates remaining statistically indistinguishable across all 160 jurisdictions. However, regional heterogeneity is markedly stronger for Green GDP than for unadjusted GDP. A component-level decomposition attributes dynamic departures entirely to natural resource depletion, whereas CO2 emissions and waste generation exhibit the same degree of persistence as aggregate economic activity, with CO2 emissions displaying the strongest regional clustering. Extending existing analysis on persistence of a smaller sample of Green GDP to a global sample, these results indicate that current green-accounting frameworks are dominated by environmental adjustments whose stochastic properties closely mirror aggregate macroeconomic dynamics, thereby dampening the informational value of Green GDP as an independent policy signal.