Chhattisgarh

• 10 Jan 2025

Forest Ecosystem and Green GDP

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.