Current Affairs

Uttarakhand introduces Gross Environment Product (GEP)

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  • Published
    28th Jul, 2021
  • Context

    In a latest development, the State government of Uttarakhand announced to initiate valuation of its natural resources in the form of ‘Gross Environment Product’ (GEP).

  • Background

    • The concept of valuation of the environment products or components is nothing new.
    • However, it got impetus following rapid degradation of ecosystems, which led to adverse impacts on more than 60% of services derived from the ecosystems.
    • In order to address these environmental issues, several attempts were made:
      • Ecosystem services: In 1981, the term “ecosystem services” was coined to attract academics towards this aspect.
      • Elaborated aspects of ecosystem services: Later, Robert Costanza (American ecological economist) contributed various publications defining and elaborating aspects of ecosystem services.
        • According to Costanza, ecosystem services can be defined as the benefits human populations derive, directly or indirectly, from ecosystem functions.
        • However, the definition is still in the process of evolution.
      • Millennium Ecosystem Assessment: In 2000, the Millennium Ecosystem Assessment was called for by General Kofi Annan (United Nations Secretary).
      • In 2010, the Conference of Parties to the Convention on Biological Diversityheld in Nagoya witnessed acceptance of environmental goods part of the national accounts.

    Today, ecosystem services are well-defined field of research worldwide.

  • Analysis

    What is GEP?

    • GEP is a process of simple valuation of state’s ecological wealth, or to assess that what part of the GDP it contributes.
    • Simply put, it is the total value of final ecosystem goods and services supplied to human well-being in a region annually.
    • It can be measured in terms of biophysical value and monetary value.

    Ecosystems (which can be measured) include: 

    • natural ecosystems such as forests, grassland, wetland, desert, freshwater and ocean
    • artificial systems that are based on natural processes like farmland, pastures, aquaculture farms and urban green land, etc. 
  • How significant are ecosystem services?

    Ecosystem services represent the benefits humans get:

    • Forests
    • lakes and grasslands
    • timber and dyed
    • carbon sequestration and nutrient cycling
    • soil formation and productivity
    • tourism
    • In 1997, a group of 13 economists and ecologists led by Costanza showed that at global level the value of ES is about twice as much as the global GDP.

    Estimating the State’s green reserves

    • Uttarakhand, through its biodiversity, gives services to the tune of Rs 95,112 crore per year to the nation.
    • The state encompasses an area of 53,483 square kilometre. Around 86 percent of this is mountainous and 71 percent is covered by forest.
    • It is also home to the Himalayas, is the origin point of rivers like Ganga, Yamuna and Sharada as well as home to wildlife reserves like Corbett and Rajaji Tiger reserves.
  • How human well-being and economic development impacted the ecosystem?

    • Degradation of ecosystem services
    • Increased risks of non-linear changes
    • The exacerbation of poverty for some groups of people
  • How valuation of ecosystem services have innumerable benefits?

    • Help human societies understand the critical importance of the ecosystem to them.
    • Provides a basis for prioritizing investments to meet conservation goals.
    • Monetary values associated with nature help understand the trade-offs between conservation and development.
    • Helps investment (infrastructure development) decisions that might otherwise ignore the effects on the environment.
    • Helps design efficient management mechanisms (economic instruments, controls, etc.) and institutions (PES).
  • Conclusion

    The demand of introduction of GEP caught pace after the 2013 tragedy of Uttarakhand. This significant development of implementation of the concept and calculation of the GEP will help to understand the impact of anthropological pressure on ecosystem and other natural resources.  Thus, it will enable formulation of policies for sustainable development.