TROPICAL RAINFORESTS: Saving What Remains

A Problem with GDP as a Measure of National Economic Health

GDP, Gross Domestic Product, is the one of the most widely used indicators of the national economy. GDP is the annual aggregate production of all goods and services in a country. One problem with GDP is that it does not necessarily indicate the economic well-being of a country since activities that are detrimental to the long-term economy (like deforestation, strip mining, over-fishing, murders, terrorism) increase today's GDP. Therefore environmental degradation is rarely accounted for in GDP calculations. For example, the infamous Exxon Valdez oil spill showed up as a net economic gain in the US because of the expenditures associated with the clean-up effort. These expenditures outweighed the eleven million gallons of oil spilled into Alaskan waters.





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