Sustainable Development with Green GDP

In fact, this is not really a new criterion to assess the health of Vietnamese economy. However, instead of using conventional GDP calculation method, according to the Prime Minister’s Decision No. 43/2010/QD-TTg, the “Green GDP” Index will be brought into the national socioeconomic indicator system, starting from 2014. Therefore, the Green GDP Index is taken by conventional GDP minus indicators of resource depletion and damage caused by environmental pollution. If is now quite difficult to determine these two parameters, resource depletion and damage caused by environmental pollution.

 

In the 1970s, some developed countries in the world like Norway, France and Finland made a great effort to build a mechanism to integrate environmental damage and natural resource depletion into national economic accounting. In 1993, the United Nations and World Bank (WB) collaborated to develop a methodology for the construction of natural and environmental accounts and published an instruction manual on the System of Integrated Environmental and Economic Accounting (SEEA 1993). The amendment to this system was made in 2003. That is the premise for CIEM to research and find out best methods for Vietnam to compute the “Green GDP” Index.

 

In reality, Vietnam enjoyed a high economic growth rate for a long period of time and international friends spoke high of it. However, looking from the perspective of sustainable development and environmental factors, Vietnam’s growth was primarily driven by the extraction of available natural resources in the country in the past decade. The growth concentrated on polluting, energy-intensive industries.

 

Meanwhile, the System of National Accounts (SNA) does not account environmental costs or measure full contributions of the environment. An early urgent warning by economists to Vietnam’s economy is the very use of conventional GDP index is likely to lead to a growth policy that focuses all resources on growth at any cost.

 

The Green GDP Index construction project was funded by the UK's Foreign Commonwealth Office from July 2011 to March 2012. Specialists from the General Statistics Office (GSO) and CIEM are quickly building computing methods for Green GDP Index. And, after nine months of study, the framework methodology for construction of Vietnam Green GDP Index was created. However, to be used as a criterion of national environmental accounting, it remains new to both policymakers and statistical staffs in Vietnam. For this reason, to have a roadmap to put this set of criteria into practice, we must go through some stages like building a framework methodology, information and data preparation, and human resources development to perform green accounting.

 

Currently, according to Vietnamese and international experts, Vietnam can apply international environmental accounting framework and should firstly focus on key accounts like natural resources: non-renewable energy like petroleum, coal and gas; pollution accounts; and environmental public spending accounts. In particular, forest account should be given first priority.

 

The reason is very simple. Forest account is easier to do with than other accounts such as mineral account and energy account. Besides, energy account potentially contains national secrets.