1.3.8—GDP limitations
- Syllabus
- First assessment 2026
- Objective
- 1.3.8
- Level
- SL
GDP Counts Markets, Not Nature
GDP measures market production; it does not automatically subtract depletion or damage to natural systems. Green GDP attempts to include those costs.
Compare the market output with changes in carbon storage, habitat, soil and water regulation. Green GDP depends on estimated environmental costs, so its assumptions matter.
Logging can raise GDP through timber sales while reducing forest services; subtracting estimated depletion makes apparent progress smaller.
The value of lost ecosystem services and future resources; GDP is incomplete for sustainability.
GDP is not ‘wrong’; it measures market production, not complete well-being or sustainability.