The Plight of Green GDP in China

Abstract

China’s decision in 2004 to implement and use “Green GDP (Gross Domestic Product)” to measure societal development created a fury of debate. Although endorsing the adoption of a national Green GDP at the Communist Party plenum reflected a political shift in priority towards a more environmentally sustainable economic model, Green GDP faced many challenges – challenges that other countries had discovered in their own pilot studies – that ultimately lead to the official demise of Green GDP accounting in China in 2009. This paper explores the challenges inherent in Green GDP implementation as illustrated by China’s experience in trying to implement this metric. Our analysis of the implications of such a framework results in recommendations for increasing the robustness of sustainability accounting systems. Though experiencing an initial aborted attempt, China can yet revive its development of Green GDP and/or other environmental accounting, as evidence mounts that it is nowhere more needed than in China for her pursuit of a more harmonious society.