THE GROSS DOMESTIC PRODUCT AND.pdf - Wikiprogress

In accordance with this goal, the World Bank in 1997 publishedExpanding the Measure of Wealth: Indicators of EnvironmentallySustainable Development, and Statistics Canada released onDecember 4, 1997, the new Canadian System of Environmental andResource Accounts, which will be incorporated into the country‟snational balance sheets and input-output accounts. In fact, a majorgoal of Statistics Canada‟s new Environmental Protection ExpenditureAccounts is „to provide those who might be interested in calculatingan environmentally-adjusted GDP along these lines with theinformation necessary to do so.‟(from GPI Atlantic‟s Measuring Sustainable Development)Incorporating natural resources into balance sheet accounts provides astatement of national wealth (value of capital from which a nation can derivefuture income). Currently, this includes machines that harvest timber, but notthe timber itself. Both are capital assets, but unlike the situation of a nationlosing all its capital (as currently defined), a nation could exhaust a naturalresource and it would not show up in the calculation of the national accounts.The reason for this is the fact that man-made capital is taken into accountwhen it is created; however, “discovered” natural capital is never accountedfor on a balance sheet.The satellite system reorganizes the SNA framework to better serveenvironmental analysis to make explicit spending on environmentalprotection activities, and to present the value of natural resource asset stocksand the yearly change in these stocks. It also describes theenvironment/economy interaction in physical terms, linking data on resourceuse and waste production to economic data from SNA. The result is anenvironmentally adjusted Net Domestic Product.B. Redefining Progress’ Genuine Progress Indicator (GPI)Redefining Progress, a San Francisco-based policy organization(www.rprogress.org), is at the forefront of the alternative economic/socialindicator movement. Their Genuine Progress Indicator (GPI) adjusts theGDP to account for “negative” growth (such as resource depletion andspending for crime prevention) versus “positive” growth. Its goal is to createa single-number indicator that will supplant GDP as a measure of economicand social welfare.The GPI is designed to measure economic welfare and sustainable economicdevelopment. It begins with consumer spending adjusted for incomeinequality, to which it adds and subtracts various factors deemed to contributeor hamper sustainable economic development and social welfare (see Table1).