Environmental costs measured

By Eva Cheng Every dollar of economic activity officially registered by Japan in 1990 has hidden unaccounted costs to the environment worth of at least $2.50, an international conference in Tokyo was told late last year. The Japan Centre for Economic Research, which prepared the study, reported that the US$3.55 trillion of goods and services produced by Japan in 1990 —measured by gross domestic product — was achieved at the hidden price of at least $8.77 trillion of damage to the environment. But that price (calculated by the extent of destruction of natural assets and the ecosystem as well as the costs in restoring those damages that are deemed recoverable), high as it is, captures only a partial picture. It has not taken into account the damage done by global warming, destruction to the ozone layer, overseas environmental destruction associated with Japanese imports or damage that isn't recoverable. Centre spokesperson Yoichi Nakamura said the green GDP, which was proposed to the Japanese government late last year, was modelled after the system of national accounts proposed by the 1992 Earth Summit in Rio de Janeiro. The environmental cost remains at an astounding level despite a decline, per unit of economic activity, in the five years to 1990, which was attributed to the halving of coal production in Japan. But air pollution caused by vehicle emissions, a main source of environmental damage during the period, rose by 6.9%, far exceeding the rate of economic growth. The disregard of environmental damage is a fundamental flaw in the measurement of economic output in most countries today. Unpaid housework, performed primarily by women, is another glaring omission common from the prevailing measurement of national accounts.

From GLW issue 216