China Ditches Green GDP

♠ Posted by Emmanuel in , at 4/03/2007 04:46:00 AM
China was lauded for its forward thinking when it released its first set of green GDP figures last year that showed its GDP in 2004 would have been shaved by three percent (amounting to $64B) after accounting for environmental damage and resource usage. Although those releasing the figures acknowledged methodological limitations that may have underestimated this reduction, compiling green GDP was a step in the right direction of quantifying the environmental costs of China's growth. This effort was led, at the behest of no less than Premier Hu Jintao, by proactive vice-minister Pan Yue of the State Environmental Protection Agency (SEPA). Despite approval from many quarters that China was beginning to recognize the environmental costs of its economic rise, murmurs of discontent were heard from participating provinces by late last year. Recently, it was announced that future results of green GDP studies would not be reported publicly just as the 2005 figures were set to be released:

Green GDP accounting - which takes into account the impact of environmental degradation on the economy - has hit a snag, a source with the environmental watchdog said.

The National Bureau of Statistics (NBS) has asked the State Environmental Protection Administration (SEPA) not to release the latest results of Green GDP to the public and keep them only as a reference for policymakers, said the source.

The NBS and SEPA jointly released the Green GDP accounting for 2004 last September amid much fanfare; and the results for 2005 were planned to be released this month by SEPA...

But soon after the [2004] report was released, some of the 10 provinces and municipalities in the pilot project were reluctant to continue their participation and wanted to pull out because of concerns that regional economic growth could be hit.

Likely, political pressure from provinces participating in the program decided to complain about green GDP for it made their economic prospects appear worse. Chalk this one up as a victory for the old mindset, though you have to wonder how much further China can go without more honestly appraising the environmental costs of its economic rise. As Pan Yue suggested earlier, it may be difficult to get regional officials into an environmental mindset:
Like the green GDP calculation system, a strict rewards and punishment system and accountability should be adopted to ensure governments at all levels will implement it.

We will do what we can to speed up the legislative process of a detailed regulation to evaluate the environmental protection performance of officials and make it an important reference for their promotion or appointment.

Only by doing this can we change the officials' "economy- overriding-all" perspective and to one of low energy consumption, high utilization and low emission.