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Dual Accounting Methods of GDP and GEP: Pilot Practice by Yantian District in Shenzhen


By Gu Shuzhong, Research Institute of Resources and Environment Policies of DRC

Traditional GDP accounting has long failed to reflect in real terms the contributions made by resource, environment and ecology to economic growth; green GDP accounting has made to some extent positive correction to the traditional GDP accounting; while GEP accounting marks a brand-new accounting method putting more focus on resources, environment and ecological benefits. GEP means gross ecosystem production, which reflects aggregate ecological products and services that the ecosystem of a country or a region, an area or a drainage area could provide to human beings. Yantian District in Shenzhen city has taken a leading position in the country in making pilot practice relating to the double accounting of GDP and GEP and has set a prime example in establishing and improving the system for ecological progress. Compared with other areas, urban GEP accounting by Yantian is more beneficial for understanding and evaluating the urbanization progress and ecological effect, which is worth learning for rest of the country. Yantian has formulated a GEP accounting indicator system consisting of three classes of indicators, 2 for the first class, 11 the second and 28 the third. In terms of assigned value, Yantian applies different methods of assignment to the two first-class indicators. The annual accounting results published by Yantian serve as a major benchmark for appraisal of work performance of institutions and officials. Yantian's GEP accounting results have a significant bearing on the promotion of ecological progress, reform of the official appraisal system, the building of a new-type of urbanization, transformation toward "green" development, management of ecosystem, as well as the upgrading of a city's image. It also enables us to realize that GEP accounting has been widely accepted and considered as a good method of reexamining a city's development process. GEP accounting requires adherence to scientific accounting with an overall consideration of the characteristics and requirements of urban development. The success of GEP accounting depends on support given by party committees and governments. To adopt urban GEP accounting means to face a series of challenges of system boundaries, human interference, and urban functions. Yantian is dealing with the above-mentioned challenges through improving the accounting system, focusing efforts on the combination of accounting system with ecological progress.