Forest Ecosystem and Green GDP

• 10 Jan 2025

Why in News? 

Recently, Chhattisgarh became the first state in India to link its forest ecosystem to the Green Gross Domestic Product (Green GDP).  

• This approach highlights the economic and environmental value of forests, focusing biodiversity conservation and climate change mitigation. 

 Key Points 

• Goals and Design of the Action Plan: 
  • The plan ensures economic progress while preserving the environment for future generations. 
  • Key benefits like climate regulation, soil enrichment, water purification, and carbon absorption will now be integrated into the state’s economic planning. 
• Importance of Forest Resources in Chhattisgarh: 
  • With 44% of its land covered by forests, Chhattisgarh’s natural resources are vital to millions. 
  • Forest products such as tendu leaves, lac, honey, and medicinal plants significantly boost the rural economy. 
  • Forests absorb carbon dioxide, playing a crucial role in combating climate change. 
• Alignment with National Vision: 
  • The initiative aligns with the Prime Minister’s vision of a "Developed India 2047." 
  • The plan emphasizes both the economic and environmental benefits of forests in budget planning and policy-making. 
• Findings from ISFR Report: 
  • The India State of Forest Report (ISFR) highlights a significant rise in forest and tree cover in Chhattisgarh, attributed to biodiversity protection and conservation efforts. 
• Cultural and Employment Significance: 
  • Forests in Chhattisgarh hold religious and cultural significance, deeply tied to tribal traditions and spiritual solace for local communities. 
  • Forests contribute to employment through eco-tourism activities such as jungle safaris and camping in national parks. 
• Ecosystem Services Valuation: 
  • To quantify the economic value of forests, scientists will assess their ecosystem services, including: 
    • Clean Air: 
      • Quantifying CO2 absorption by trees and its conversion into oxygen. 
      • Adding its market value to Green GDP. 
    • Water Conservation: 
      • Measuring the economic impact of water provided by forests through rivers and springs. 
    • Biodiversity: 
      • Valuing the role of forest fauna in maintaining ecological balance and aiding agriculture. 

 Green Gross Domestic Product (Green GDP) 

• Traditional GDP: A measure of the annual value of goods and services produced within a country, GDP has been the global standard since 1944.  
  • Simon Kuznets, the economist who created GDP, stated that GDP doesn't reflect a nation's true welfare, as it ignores factors like environmental health and social well-being.  
• Green GDP: It is a modified version of traditional GDP that accounts for the environmental costs of economic activities.  
  • It incorporates factors such as natural resource depletion, environmental degradation, and pollution into the economic output, offering a more comprehensive picture of a nation’s true wealth.  
• Need for Green GDP: Traditional GDP overlooks sustainability, environmental degradation, and social welfare. It focuses solely on economic output without considering the long-term consequences on the environment.  
  • Green GDP, on the other hand, ensures that economic growth aligns with sustainable practices, reflecting the true cost of environmental damage and the depletion of natural resources.  
• Formula:  
  • According to the World Bank, Green GDP = NDP (Net Domestic Product) − (Cost of Natural Resource Depletion + Cost of Ecosystem Degradation).  
  • Where NDP = GDP − Depreciation of Produced Assets.  
    • Cost of Natural Resource Depletion refers to the value lost due to overuse of natural resources.  
    • Cost of Ecosystem Degradation refers to the value lost from environmental damage such as pollution and deforestation.