economics medium True/False

The 'Green GDP' attempts to adjust the conventional Gross Domestic Product by monetizing and subtracting the costs of environmental degradation, resource depletion, and ecological damage caused by economic activities.

  1. True
  2. False

Answer: True

Conventional GDP treats the extraction and sale of natural resources as pure income, ignoring the destruction of natural capital. Green GDP accounts for the 'bads' alongside the 'goods' by deducting the monetary value of pollution, deforestation, and loss of biodiversity. While conceptually superior for measuring sustainable development, it remains difficult to implement globally due to the complexities of accurately pricing ecological damage.

Topic Macroeconomics - National Income
Exam Relevance UPSC Prelims, SSC CGL
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