Beyond Gross Domestic Product: including Nature in economic policy assessment

1 minute read / May 27, 2024

The supply of ecosystem services, such as crop pollination and water purification, are of great importance to any economy, both directly and indirectly. However, most assessments use Gross Domestic Product (GDP) as the main economic development indicator. GDP shows the total value of output/income generated in a country, but it does not capture fully the contributions of nature to economic activity.

The concept of Gross Ecosystem Product (GEP), which summarises the value that ecosystem services provide to the economy in monetary terms, is a way to overcome these shortcomings in policy assessments. It also allows assessing the impact of particular policies on the overall condition of ecosystems.

The Gross Ecosystem Product in Macroeconomic Modelling report explains and showcases how GEP can be applied in macroeconomic analyses alongside the traditional GDP indicator. The application of GEP to assess the value of ecosystem services in the decision-making process could enhance the quality of new policies and stewardship, which in turn could improve the management of natural capital.

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