Gross Domestic Product (GDP) summarizes a vast amount of economic
information in a single monetary metric that is widely used by decision-makers around the
world. However, GDP fails to capture fully the contributions of nature to economic activity
and human well-being. To address this critical omission, we develop a measure of ...
Gross Domestic Product (GDP) summarizes a vast amount of economic
information in a single monetary metric that is widely used by decision-makers around the
world. However, GDP fails to capture fully the contributions of nature to economic activity
and human well-being. To address this critical omission, we develop a measure of Gross
Ecosystem Product (GEP) that summarizes the value of ecosystem services in a single
monetary metric. We illustrate the measurement of GEP through an application to the
Chinese province of Qinghai, showing that the approach is tractable using available data.
Known as the “water tower of Asia,” Qinghai is the source of the Mekong, Yangtze, and
Yellow Rivers, and indeed, we find that water-related ecosystem services make up nearly twothirds of the value of GEP for Qinghai. Importantly most of these benefits accrue
downstream. In Qinghai, GEP was greater than GDP in 2000 and 3/4th as large as GDP in
2015 as its market economy grew. Large-scale investment in restoration resulted in
improvements in the flows of ecosystem services measured in GEP (127.5%) over this period.
Going forward, China is using GEP in decision-making in multiple ways, as part of a
transformation to inclusive, green growth. This includes investing in conservation of
ecosystem assets to secure provision of ecosystem services through trans-regional
compensation payments.