Green GDP and Economic Openness in India

Abstract

Aim: The vast range of weather conditions in India's climate system is a result of numerous reasons, including growing agricultural activity, altered land use patterns that increased emissions of methane and nitrous oxide as well as other greenhouse gases, automobile use, and so forth. It is necessary to quantify the significant and under-estimated impact of climate change on the natural system through changes in extreme weather. To account for the economic losses of the environment as a result of climate change, the Green GDP concept was introduced. The objective of the paper is to compute the Green GDP for India and test the effect of economic openness on GDP and Green GDP. Methodology: The World Bank Database, the OECD, and Energy Statistics India 2021 are some of the sources from which information was gathered. Growth Rate, Economic Openness Index and the Green GDP estimation methods are employed. To compute the Green GDP indicator for the years 2011 to 20, the GDP measure is subtracted from the costs associated with the utilization of natural resources and environmental degradation. Results:  According to the outcome, the cost of environmental damage will decline from 11 per cent in 2011 to 9 per cent in 2020. The cost of environmental damage growth rate was -3.07 percent. The Economic Openness Index was 55.62 in the year 2011 and it is gradually declining and attained 36.46 in the year 2020. The lower the index, the lower the impact of trade on domestic activities and the less powerful the economy of that country. The relationship between economic openness and Green GDP per capita shows that less and less economic openness moves the cost of environmental damage to the increasing side. Conclusion: The cost of environmental damage increased in the year 2020 compared to 2011 but the growth rate shows negative. The government should take several initiatives to assure data availability and accountability to estimate the environmental damage cost and to frame suitable policy options to improve economic performance overall.