Chhattisgarh has introduced an innovative plan that connects the ecosystem services of its forests with the Green Gross Domestic Product (Green GDP).

• The move highlights the direct link between significant environmental contributions of forests like clean air, water conservation, biodiversity and the state’s economic progress.

What is Green GDP?

• Green GDP is an alternative metric for gauging economic growth that takes into consideration the environmental consequences linked to economic activities.
• The origin of Green GDP can be traced back to the 1993 United Nations publication, “Handbook of National Accounting: Integrated Environmental and Economic Accounting.” 
• This handbook, developed under the framework of the System of Environmental-Economic Accounting (SEEA), introduced the concept of monetary valuation of natural resources.
• Calculation of Green GDP: 
  • Essentially, it proposed subtracting the cost of natural resource depletion and environmental degradation from the traditional Gross Domestic Product (GDP) to arrive at a more accurate reflection of economic well-being. 
  • This adjusted figure was termed “Green GDP” or “Environmentally Adjusted Domestic Product.”

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Key Assessment Parameters to Determine the Economic Value of Forests

• Carbon Sequestration: Quantify CO₂ absorbed and O₂ produced by trees, assigning market value to include in Green GDP.
• Water Resources: Evaluate the economic impact of water conserved and supplied by forests through rivers, springs, and watersheds.
• Biodiversity: Assess the role of forest fauna (animals, birds, insects) in maintaining ecological balance and supporting agriculture.
• Soil Conservation: Measure the prevention of soil erosion and its contribution to sustainable farming and land productivity.
• Climate Regulation: Analyze the forests’ role in temperature regulation, rainfall patterns, and climate stability for economic valuation.
• Recreation and Tourism: Estimate the revenue generated from eco-tourism and recreational activities in forested areas.