Why are GNI and GDP poor indicators of environmental quality Essay

Q 88. Why are GNI and GDP poor indicators of environmental quality, human health and well-being, and economic health? What is GPI? What are the benefits of using the GPI as an indicator of both “progress” and environmental quality?GDP or Gross Domestic Product of a nation is sum of value of all the goods and services produced within that country i.e. within the geographical boarders in a given time period (generally measured on quarterly or annual period). GNI or Gross national income on the other hand is sum of GDP and net income received from abroad.

What we find here is that these economic parameters talk of only economic value of goods or services and do not take into account the other equally important aspects associated with the production of goods and services. To take an example blatant cutting of forests for industrialization may lead to higher industrial output, increased exports, lot of jobs and in turn handsome GDP and GNI numbers. But, are these GDP/GNI numbers presenting the true big picture. Certainly not, the deforestation, will lead to destruction of ecology and this kind of development model can not be sustained. This means the problem with GDP/GNI numbers is that these numbers consider ecology as something extraneous to the economy, which is not true.

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Ecology is the starting point and in fact mother of all the activity. Let us consider another example of child care and domestic work by a mother at home. She is rendering services very very important for well being of humanity.She is not earning anything for doing these services and therefore her services contribute nothing to GDP. The anomaly is for similar services a child care centre and a maid earns money and that contributes to GDP. Thus there are clear contradictions to establish that GDP / GNI numbers do not include many activities indicator of good human health and well being at the same time these umbers include what is bad for country from environment, human health and well being considerations. GPI or Genuine Progress Indicator on the other hand takes into consideration the sustainability aspect of the economic activity mainly impact on environment or ecological system. Besides, GPI is a measure of how well the fruits of economic developments have percolated to different strata of society.

How this has resulted in improvement in the living standard of individuals. GDP / GNI numbers on the other hand are not bothered whether the economic gains are confined to a few privileged or spread fairly well across the population.Therefore, GPI is certainly a better indicator of environmental quality, human health and well-being, and economic healthQ 89.

What are the negative effects of mining, processing, and use of mineral resources?Mining, processing and use of mineral resources have become integral and inevitable parts of our economic life. However, there are many adverse aspects of mining and mineral processing. Mining is of two types – open cast and underground mining. In open cast mining the mineral is above the ground itself in the form of a hill. The entire hill is excavated to process the mineral. This leads to destruction of the flora and fauna. Besides, lot of dust is generated which leads to pollution and human health hazards. In case of underground mining, the mining personnel go deep inside the ground.

This has life risk associated with it as the ground above can crumble or water can leak from the walls of mines. In many cases there are toxic gases like methane and carbon monoxide associated mainly with underground coal mines. Many casualties have been reported and the risk persists despite the progresses made so far.Processing of these minerals in many cases, require use of toxic chemicals.

This poses health risk to the personnel. Besides, the effluents are discharged to the surroundings and lead to contamination of the underground water or the water mass into which the effluents are discharged. Mineral processing consumes considerable energy and therefore adds load on the ecological system. Lot of dust and fines are also generated, which pollute the environment.After processing the minerals are converted into useful forms. In many cases this process of conversion is highly energy intensive and produces lot of heat and green house gases.

One can take example of conversion of iron ore into pig iron in the blast furnace. This is a high temperature process and uses coke as primary fuel. Hot metal is produced at around 1600 oC. Besides, CO2, CO and dust is generated, which keeps on polluting the environment.


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