Abstract
A key indicator of the System of National Accounts of Russia at a regional scale is Gross Regional Product characterizing the value of goods and services produced in all sectors of the economy in a country and intended for final consumption, capital formation and net exports (excluding imports). From a sustainability perspective, the most weakness of GRP is that it ignores depreciation of man-made assets, natural resource depletion, environmental pollution and degradation, and potential social costs such as poorer health due to exposure to occupational hazards. Several types of alternative approaches to measuring socio-economic progress are considering for six administrative units of the Ural Federal District for the period 2006-2014. Proposed alternatives to GRP as a measure of social progress are focused on natural resource depletion, environmental externalities and some human development aspects. The most promising is the use of corrected macroeconomic indicators similar to the “genuine savings†compiled by the World Bank. Genuine savings are defined in this paper as net savings (net gross savings minus consumption of fixed capital) minus the consumption of natural non-renewable resources and the monetary evaluations of damages resulting from air pollution, water pollution and waste disposal. Two main groups of non renewable resources are considered: energy resources (uranium ore, oil and natural gas) and mineral resources (iron ore, copper, and aluminum). In spite of various shortcomings, this indicator represents a considerable improvement over GRP information. For example, while GRP demonstrates steady growth between 2006 and 2014 for the main Russian oil- and gas-producing regions – Hanty-Mansi and Yamalo-Nenets Autonomous Okrugs, genuine savings for these regions decreased over all period. It means that their resource-based economy could not be considered as being on a sustainable path even in the framework of “weak†sustainability, i.e. sustainability under the assumption that the accumulation of producible physical capital and of human capital can compensate for losses in natural non reproducible resources.
Highlights
A key indicator of the System of National Accounts of most countries is the gross domestic product (GDP), characterizing the final result of production activity of economic entities, which is measured by the value of goods and services produced by these entities for use
The basic measure of the regional development stability is a net regional product (NRP), which is calculated as the difference between the gross regional product (GRP) and the depreciation of fixed capital in the course of economic activities (DFC)
For the calculation of environmentally adjusted (“green”) GRP, net regional product (NRP) is reduced by the cost of non-renewable natural resources spent in the course of economic activity (DNNR) and by the damages caused by environmental contamination (EPC) (Formulas 1 and 2)
Summary
A key indicator of the System of National Accounts of most countries is the gross domestic product (GDP), characterizing the final result of production activity of economic entities (residents), which is measured by the value of goods and services produced by these entities for use. Among other shortcomings of GDP, we can mention the fact, that at its calculation the depletion of natural resources and environmental degradation in the course of the economic activity are not taken into account. An impression is given of rapid economic growth at the parallel depletion of the resource base, degradation of ecosystems, environment pollution and public health deterioration. Underestimating these negative consequences can give a distorted picture of the state of economics and lead to the choice of a false path of development
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
