Green GDP Accounting — Economic Framework

Economic Framework

GDP is a gross production measure. Subtracting consumption of produced fixed capital gives NDP. Further environmental adjustments require a defined method and must not overlap with amounts already counted. In an illustrative exercise, GDP of 1,000 minus fixed-capital consumption of 100 gives NDP of 900; additional non-overlapping depletion of 40 and degradation of 20 produce an adjusted net measure of 840.

Physical asset accounts also balance changes. An opening stock of 500 plus additions of 20 minus reductions of 50 closes at 470, with no other changes. This does not itself provide a monetary depletion cost. Physical quantities and monetary values can move differently when unit valuation changes.

The SEEA Central Framework was adopted as an international statistical standard in 2012. In 2021, chapters 1–7 of SEEA Ecosystem Accounting received statistical-standard status, while chapters 8–11 were recognised as principles and recommendations for monetary valuation and integrated accounts. The distinction should not be flattened into identical status for the entire document.

MoSPI's 2022–2026 strategy concerns development of environmental-economic accounts. A strategy period does not prove completion or establish a single official Green GDP estimate. Physical accounts, valuation boundaries and the risk of double counting remain important even when monetary integration is the analytical objective.