China's 'green GDP' index facing technology problem, local protectionism

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Last updated at: (Beijing Time) Saturday, April 03, 2004

China's 'green GDP' index facing technology problem, local protectionism

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China needs to remove both technological obstacles and resistance from some local officials before it can establish a "green" gross domestic product (GDP) index system, said a senior Chinese environmental official in Beijing on April 2.

The "green" GDP, considered an echo of China's newly raised "scientific concept of development", requires adjusting the traditional national GDP to account for the degradation of both natural resources and environment.

"We have to first resolve difficulties in deciding the value ofnatural assets, and then remove the resistance of local officials.Neither is easy," said Pan Yue, deputy director of the State Environmental Protection Administration (SEPA) in an interview with Xinhua.

According to Pan, the major technological challenge is to decide the value of natural assets when they are not traded in themarket and thus have no price.

"How much is the cost of felling a part of forest? We don't know, because we don't know how to count the ensuing animal extinction and soil erosion."

Pan recommended deciding the value by counting the cost for recovery. "How much will it cost to restore a clean Yellow River? If it is impossible, the Yellow River is invaluable. Then any irreversible pollution is intolerable."

Pan acknowledged that another challenge is to overcome the resistance from local officials.

"The new index will surely lead to a drastic fall of GDP figurein some areas and in turn bring a negative influence to local officials' promotion. Therefore, resistance is to be expected," Pan said.

Pan suggested China learn from Mexico, which, also a developingcountry, adopted the green GDP index in 1990 with the support of the United Nations.

"SEPA and the National Bureau of Statistics (NBS) have already formed a joint working group on the green GDP, and will basically set up the framework in three to five years." added Pan.

According to the NBS, it has chosen land, forestry, mineral andwater resources as the first group of resources for a quantitativeaccount. It is also working on an "energy resources account" to calculate energy consumption in the upcoming energy shortage.

As pilot experiments, industrial and water pollution valuing projects are carried out on an experimental basis in southwestern Chongqing municipality and forestry counting projects in south China's Hainan island province.

Source: Xinhua

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