A new green GDP mechanism may turn "a new page in Chinese environmental history."  

Officials and experts are working on an accounting system to adjust gross domestic product (GDP) calculations to include environmental costs.

Dubbed "green GDP,'' the new accounting system is a joint effort by the State Environmental Protection Administration (SEPA) and the National Bureau of Statistics (NBS).

Officials designed a four-step approach to calculate green GDP, officials said Thursday during an international workshop sponsored by Environmental Defense, a US-based environmental NGO.

The workshop marks "a new page in Chinese environmental history," said Dan Dudek, Environmental Defense’s chief economist.

Green GDP includes integrated environmental and economic accounting systems and attempts to measure the actual amount of environmental pollution.

The system also attempts to account for the cost of environmental losses and adjust GDP calculations to match those losses.

The system is needed to support a sustainable economy, said NBS director Li Deshui.

Although development of the system itself is still in its preliminary stages, ministries should work together to develop it, he said.

Pan Yue, deputy director of SEPA, said the new system fine tunes the existing national economic accounting system, because it does not factor in natural resource depletion and environmental losses.

Green GDP can also be used to evaluate the performance of local government officials, who are used to being promoted solely based on their successes in advancing the local economy.

Pan said one of the objectives of the green GDP calculation is to bring ecological and environmental concerns into officials' decision-making process.

(China Daily June 25, 2004)