Green GDP and Energy: A New Model of GGDP and Energy

Abstract

While the gross national/domestic product (GNP/GDP) index is a highly reliable indicator that reflects economic performance of a country, it still largely ignores the depreciation of assets, non-market economy and especially the damages to the environment caused by growth. Environmental sustainability of economic growth has come to be recognized as one of the most important pillars of sustainable growth and development. In order to tackle many challenges of the so-called green growth and sustainable development, we try to build a new/alternative Green GDP indicator that should give us a clearer perspective of the consequences of economic progress by offering a new approach in quantifying the cost of ecological and environmental degradation. Since the loss of natural resources is difficult to estimate, but the main purpose of natural resource loss is to obtain energy, the relationship between GGDP and energy is studied, including coal resources, natural gas resources and nuclear energy. Furthermore, the main factors affecting GGDP are indirectly explored, so as to provide reference opinions for the sustainable development of various countries. Since the obtained data is panel data, after preprocessing, logarithmic operations, F-test and Haussmann test, a random-effects model is selected, and the calculation concludes that GGDP is highly correlated with GDP, coal, natural gas and nuclear energy.