China’s green GDP and environmental accounting

Authored by: Yu-Wai Vic Li

Routledge Handbook of Sustainable Development in Asia

Print publication date:  June  2018
Online publication date:  May  2018

Print ISBN: 9781138182189
eBook ISBN: 9781351008204
Adobe ISBN:


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Yu-Wai Vic Li writes on “China’s green GDP and environmental accounting.” Dr. Li notes that China’s environmental conditions have deteriorated significantly as a result of rapid industrialization, massive urbanizations and shifting demographics that have resulted in resource depletion of unprecedented scale. The annual growth rates that surpass most of the developed and developing worlds invariably contain entail enormous costs to the natural environment and ecosystem. In the 2000s, Green GDP gained momentum when the country faced skyrocketing pollution in the 2000s and the top party and state leaders adopted a “scientific outlook” of development, endorsing the notion of green GDP and practices of environmental accounting. This galvanized the launch of China’s green GDP accounting in March 2004 led by the State Environmental Protection Agency (SEPA; and upgraded to Ministry of Environmental Protection in 2008) and the National Bureau of Statistics (NBS). The joint-agency campaign centered on accounting of the abatement/treatment costs of, and the economic losses arising from air, water and solid waste pollution in ten provinces and municipalities and 42 industrial sectors. This herculean effort was accomplished in about two years, with the world’s first official green GDP accounting report released in September 2006. However, behind the facade of the campaign’s apparent success laid intractable methodological challenges and political resistance from the statistical bureau and local authorities involved. This not only undermined SEPA’s lead in the accounting exercise, it also foreshadowed the unfortunate end in July 2007, when the NBS unilaterally announced the project’s termination and local authorities quit the project. The research endeavor, however, was carried on by SEPA’s affiliated research body, the Chinese Academy for Environmental Planning (CAEP), which published its own annual results. The central authorities did not extend their support again until 2013, when the new Chinese administration under Xi Jinping rallied for support of the “ecological civilization” campaign and the international framework of environmental economic accounting was finally well-developed. Blessed by the central authorities, the MEP resumed the green GDP study in early 2015, but this was rivaled by a different environmental accounting initiative championed by the NBS, which concerned stock-taking of natural capital that would expand the economy’s asset/wealth level for long-term sustainable development. This added considerable uncertainties to the fate of China’s green GDP survey.

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