|Ruhiira has deforested most (only 5% of original area remains)|
of its land for agricultural expansion
and biomass requirements for cooking and heating
(No electricity was available)
For example, take two poor countries, both have a GDP of 100 and both have 100 ha of remaining natural forests. These forests provide ecosystem services in the form of biomass (10USD per year if substituted by natural gas), protection against soil erosion (50 USD per year), water recharge to underground reservoirs and in general protection from extreme runoff (30 USD), finally provides natural habitat to species that also provide ecosystem services such as pollination (10 USD). In country A a leader that has understood the importance of sustainable development, decides to start a national agroforestry business and maintain the natural forest intact, The wood provided by this sustainable agroforestry scheme provide 400 USD per year. So country A has now a GDP of 500 USD.
|El desierto the Atacama, what can you observe from the picture?|
What do you think is the GDP of the area? 0?
well no they have the largest deposits of
copper and other minerals that you crave for.
Still I would not like to live in there...
GDP tells us that country B was more effective than country A in increasing the wellbeing of its population, right?
Well actually no, in 10 years time, A will be having a GDP of 500 USD and Country B will have a GDP of 100 USD. Damned. What went wrong? We are not considering the transformation of natural capital. In the end most of the wealth that countries produce still come in one way or another from natural capital. Country A created 400 units of wealth maintaining 100 units of natural capital per year untouched, in reality country A is more efficient in the creation of wealth. Country B created 1000 units of wealth by destroying 100 units of natural capital that will not replenish, so in fact the destruction of natural capital in 20 years is 2000, the real wealth created by country B is 1000 - 2000 = -1000. Country A in the same period created 400x20 + 100x20 = 500x20 = 10000 units of wealth. Now makes sense?
This is called GDP efficiency, its the ability of a country to create wealth by minimizing the loss of natural capital.
|Los Viveros de Coyoacan provide |
one million tree seedlings per year
for reforestation projects around Mexico City
(AKA the city of hope)
Average GDP per capita is the same right? So? Is it the same situation?
I call this GDP distribution, I want to live in country A, and you?
Let's start using our brains...