Uttarakhand has become the first Indian state to launch a Gross environment product Index (GEPI).
- Uttarakhand now does not only calculate what services we get from the environment but also what we put back into the environment.
What is the Gross Environment Product (GEP)?
- About: It is an assessment system to measure the ecological status of a region and is one of the components of green GDP.
- It is considered as the product and service value that the ecosystem provides for human welfare, economic and socially sustainable development including provisioning, regulating and cultural ecosystem services.
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GEP
- GEP was novel in that it assessed and assigned a value to the benefits that ecosystems provide.
- Benefits: Consider these benefits as various kinds of services, for example, provisioning (food, water and timber); regulating (climate regulation and flood control); supporting (soil formation and nutrient cycling) and cultural services (recreational and spiritual).
- Give Monetary Value to the services: By translating these diverse contributions into a single monetary value, GEP reflects the true worth of natural capital in sustaining economic and social well-being
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- Ecosystem services: It represents the benefits humans get: Forests, lakes and grasslands; timber and dyed; carbon sequestration and nutrient cycling; soil formation and productivity; and tourism.
- In some cases, GEP could be more than GDP: For instance, in 2000, Qinghai’s (China) GEP was greater than GDP and was three-fourths as large as GDP in 2015.
- Four main constituents of the environment which are directly impacted by development activities: It Includes air and water quality, number of trees planted in a year and the measure of the area of organic soil
- Formula: GEP Index = (Air-GEP index + Water-GEP index + Soil-GEP index + Forest-GEP index)
Green GDP
- It is a term used generally for expressing GDP after adjusting for environmental damage.
- Environmental accounting: The System of National Accounts (SNA) is an accounting framework for measuring the economic activities of production, consumption and accumulation of wealth in an economy during a period of time.
- When information on an economy’s use of the natural environment is integrated into the system of national accounts, it becomes green national accounts or environmental accounting.
- Process: The process of environmental accounting involves three steps viz. Physical accounting; Monetary valuation; and integration with national Income/wealth Accounts.
- Physical accounting: It determines the state of the resources, types, and extent (qualitative and quantitative) in spatial and temporal terms.
- Monetary valuation: It is done to determine its tangible and intangible components.
- Thereafter, the net change in natural resources in monetary terms is integrated into the Gross Domestic Product in order to reach the value of Green GDP.
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Advantages of Gross Environment Product (GEP)
- Quantitative indicator: GEP can be applied as a quantitative indicator for officials’ performance appraisal and off-office auditing.
- Impact Assessment: Help assess the impact of anthropological pressure on our ecosystem and natural resources.
- EcoCompensation & Revenue-sharing: GEP can be applied as a scientific basis for EcoCompensation and public financial transfers.
- For Example: Finance Commission’s revenue-sharing formula between the Union and the states including forest cover as a determining factor in a state’s share.
- Measuring the Progress: GEP can be applied to measure the status of ecosystem services, which is an important indicator of sustainable development. It is also a critical indicator for measuring the progress of Eco Civilization.
- Universal Measure: GEP is a universal measure of ecological status. It can be applied to various countries and regions, and all types of ecosystems.
- Establishing Harmony: Releasing GEP along with GDP in the state and GEP assessment will establish better harmony between ecology and economy .
- GEP offers a meaningful alternative by quantifying the contributions of natural ecosystems to the economy and overall welfare, including human well-being
- Raising Awareness: GEP index would also increase awareness of the environment. This will help in assessing the contribution to environmental protection.
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Why is there a need for GEP in Uttrakhand?
- Potential of the States: Through its biodiversity, Uttarakhand gives services to the tune of Rs. 95,112 crores per year to the nation and has more than 71% area under forests.
- For example, forests in the state generate Rs. 300 crores worth of employment, Rs. 3,395.2 crores worth of fuelwood, Rs. 1,243.2 crores worth of timber and save Rs. 1,306.5 crores by arresting floods.
- Himalayas Contribution: The Himalayas contribute substantially to the sustainability of the Gangetic Plains where 500 million people live.
- Wildlife & Natural Resources: It is home to the Himalayas, wildlife reserves such as Corbett National Park and Rajaji Tiger Reserves, and the origin point of various rivers such as Ganga, Yamuna and Sharada.
August 17, 2024
