RAS question
What is 'green GDP'?
Correct answer: (D) GDP adjusted for environmental costs and depletion of natural resources.
Green GDP is GDP adjusted for environmental degradation costs and the depletion of natural resources.
Explanation
Green GDP modifies the usual GDP idea so that economic output is not read in isolation from environmental damage. It subtracts environmental degradation costs and natural-resource depletion from conventional GDP, making it a better signal of sustainable economic progress. The System of Environmental Economic Accounting explains that GDP measures the monetary value of goods and services produced in a year, but growth can occur at the expense of nature and future prosperity. Green GDP deducts the cost of natural-resource depletion and ecosystem degradation. India’s exploration of green accounting through the SEEA framework fits this approach because SEEA links environmental data with economic data to calculate green economic indicators.
Why the other options are wrong
- (A) Regular GDP counts the monetary value of production but does not subtract environmental degradation costs or natural-resource depletion.
- (B) Green GDP is not GDP measured in a special green currency; the word green refers to environmental adjustment, not the unit of money.
- (C) Green GDP is not limited to output from green industries; it adjusts the broader GDP measure for environmental costs and resource depletion.
Concept
This tests environmental accounting within sustainable development, especially the limits of GDP as a welfare or long-term progress indicator. It recurs in RAS because environment-economy linkages, natural capital and sustainable growth are standard themes in governance, economy and ecology questions.