India Plans to Include Environmental Costs in GDP Data

India plans to quantify the cost of environmental damage to the economy when reporting gross domestic product figures within five years, an initiative it will encourage other governments to follow at the climate talks in Mexico.

“India will report a GDP that takes into account environmental degradation by 2015,” Environment Minister Jairam Ramesh said today at a conference in New Delhi. “We must provide leadership in this area.”

Countries are grappling with ways to price pollution so that those that produce it can be made to pay for its costs. More than 30 nations have introduced a price on carbon with an emissions-trading system, according to Anthony Hobley, a Sydney-based lawyer and climate change specialist at Norton Rose LLP.

India’s economy expanded 8.9 percent in the three months through September from a year earlier, the Central Statistical Organisation said today. That was above the 8.2 percent median estimate of 30 economists in a Bloomberg News survey.

Ramesh said such figures fail to incorporate the toll on the economy of rising public health bills and other long-term costs linked to environmental damage, such as air and groundwater pollution.

“If we are reporting GDP growth of 8 percent a year, actual GDP growth that takes into account environmental costs may be 2.5 percentage points lower,” he said. The United Nations climate talks began yesterday in the Mexican resort of Cancun and are due to conclude on Dec. 10.