CAPACITY BUILDING WORKSHOP
ON GREEN GDP ACCOUNTING
(GUP Project on Accounting for Resources Depletion and Environmental Degradation in Malaysian National Income Accounts)
Date:
22 – 23 December 2009 (Tuesday – Wednesday)
Venue:
Best Western Premier Seri Pacific Hotel, Kuala Lumpur
ORGANIZER:
Environmental and Natural Resource Economics Group Universiti Kebangsaan Malaysia
BACKGROUND
Sustainability has become a key concept in economic planning and development efforts across the globe. Sustainability in the context of national income calls for sustained maintenance of overall capital assets over time. These assets encompass manufactured capital, human capital as well as natural capital. It is common sense economics if a person saves in the current period, he plans to be better off in the future. Hence, to be on the sustainable development tract, countries must operate within her means. Macro‐policies must not result in the degradation of its overall capital assets. The appropriate national income is therefore the level that can be produced and consumed by the country without depleting these capital assets.
The main critic of conventional GDP or GNP has been on the emphasis on national spending as the basis for economic performance. More specifically, GDP only shows the value of domestic economic outputs while ignoring entirely the changes in the stock or quality of the resources that are used in producing such outputs. It also disregards the environmental costs that emanates from economic (extraction, production and consumption) processes. Hence the GDP is incapable of reflecting if an economy is moving on a sustainable growth path. As a practical illustration, consider China which boasts a high economic growth track of some 8 percent over the past two devcades. The country’s State Environmental Protection Admnistration (SEPA) in 2005 launched a pilot Green GDP Accounting Project that involves 10 provinces and municipalities. The study has revealed the enormous resource degradation and environmental cost associated with the Chinese “miracle” growth. When environmental costs were considered in the calculation of GDP, some regions demonstrated near zero growth rates.
Indonesia provides another glaring example – her GDP was reduced substantially by 10 percent when resource depletion and environmental costs were factored into the GDP calculation. The Table below further illustrates how GDP was pronouncedly affected even when only forest depletion was internalized into the calculation.
Costs of Forest Depletion and Degradation in Selected Countries
Country Year Change (%) in GDP/NDP
Indonesia 1971‐1984 ‐5.4% of GDP
Costa Rica 1970‐1989 ‐5.2% of GDP
Philippines 1988‐1992 ‐3.0% of GDP
Malaysia 1970‐1990 ‐0.3% of GDP
Sweden 1998 ‐0.03% of NDP
Sources: Various published sources
The System of National Accounts (SNA) which gave rise to the GDP measure, developed in the 1930s was structured to yield macro data of economic performance for the purpose of national policy analysis. It was originally intended to capture the aggregate value of economic production of goods and services over a specific period of time. It does not intend to incorporate all goods and services that contribute to human welfare or well‐being. The concerns on sustainable development, particularly the worry that unsustainable economic production will lead to reduced future productivity motivates the development of alternative GDP measures, namely Green GDP and Genuine Progress Indicator (GPI). In 1993, the UN published the SNA Satellite System for Integrated Environmental and Economic Accounting (SEEA) and since then it has undergone major revisions and refinements.
OBJECTIVES OF WORKSHOP
• Country experience sharing on Green GDP Accounting and other measures of economic progress
• Capacity building on the methodology of Green GDP accounting and Genuine Progress Indicator (GPI)
• To identify a methodological framework for the implementation of Green GDP accounting in Malaysia
PROGRAM
1st Day (Tuesday, 22 December 2009)
Time Schedule
08.00 – 08.45 Registration
08.50 – 09.00 Welcome Remarks
• Prof. Dr. Jamal Othman, Head of UKM Environmental and Natural Resource Economics Group (EnRE)
09.00 – 9.45 Speaker 1 (Prof. Dr. Jamal Othman, UKM)
Green Economy and Macro Measure of Sustainability 9.45 – 10.00 Coffee Break
10.00 – 11.15 Speaker 2 (Prof. Ming Lei, Peking University, China) Green GDP Accounting: The Experience of China
11.15 – 12.30 Speaker 3 (Vicky Elizabeth Forgie, Massey University, New Zealand)
Alternative Measure of GDP: The Experience of New Zealand 12.30 – 14.00 Lunch Break
14.00 – 14.15 Opening notes – Deputy Vice Chancelor Universiti Kebangsaan Malaysia
14.15 – 15.30 Speaker 4 (Buyung Airlangga, BPS, Indonesia) Green GDP Accounting: The Indonesian Experience 15.30 – 16.30 Panel Discussion (All invited speakers)
16.30 – 16.45 Coffee Break
16.45 – 17.45 Malaysian Case Studies 1st Case
Title: Accounting for Depletion of Petroleum Resources in Malaysia
2nd Case
Title: Accounting for Forest Resource Depletion in Malaysia 3rd Case
Title: Accounting for Agricultural Soil Erosion in Malaysia 17.45 – 17.50 Closing Remarks
19.30 – 20.30 Dinner
2nd Day (Wednesday, 23 December 2009) [Only for academics and Department of Statistics Participants]
Time Capacity Building Session
08.00 – 08.30 Breakfast
08.30 – 10.30 GPI and Env. IO – Methodology
by: Vicky Elizabeth Forgie, Massey University and Landcare Research, New Zealand
10.30 – 11.00 Coffee Break
11.00 – 13.00 Green Accounting and SEEA – Methodology by: Prof. Dr. Ming Lei, Peking University, China 13.00 – 14.00 Lunch Time
14.00 – 16.00 Accounting for Timber and Oil Depletion–Methodology by: Buyung Airlangga, Statistics of Indonesia (BPS) 16.00 – 16.30 Coffee Break
16.30 – 16.45 Closing Remarks
PARTICIPANTS
1. Academics, Faculty of Economics and Business, UKM 2. Department of Statistics
3. Economic Planning Unit
4. Malaysian Development Institute
5. Ministry of Natural Resources and Environment 6. Ministry of Agriculture and Agro‐base Industry 7. Department of Forestry
8. Ministry of Energy, Green Technology and Water 9. Forest Research Institute of Malaysia
10. Department of Fishery 11.Department of Environment 12. Department of Lands and Mines 13.Petronas
14. Malaysia Energy Centre
15. Malaysia Agricultural Research and Development Institute
SINCEREST APPRECIATION
• Deputy Vice Chancellor (Academic and International Affairs), UKM
• Center for Research and Innovation, UKM
• Environmental and Natural Resource Economics Group (EnRE), UKM
• Department of Statistics, Malaysia
• Invited speakers and resource person
‐ Prof. Ming Lei (Peking University, China)
‐ Vicky Elizabeth Forgie (Massey University and Landcare Research, New Zealand)
‐ Buyung Airlangga (Statistics Indonesia)
• All participants
WORKSHOP ORGANIZING COMMITTEE
Environmental and Natural Resource Economics Group (EnRE) Universiti Kebangsaan Malaysia
Prof. Dr. Jamal Othman (Chairman) Assoc. Prof. Dr. Abdul Hamid Jaafar Dr. Norlida Hanim Mohd Salleh Dr. Redzuan Othman
SECRETARIAT
A. Faroby Falatehan
Norzanita Muhammad Muhktar Yaghoob Jafary
Nor Zuriati Amani Ab Rani
