Gross Environment Product

News: The Uttarakhand government recently announced it will initiate valuation of its natural resources in the form of ‘Gross Environment Product’ (GEP), said to be along the lines of Gross Domestic Product (GDP). The idea of the valuation of the components of the environment is not new. But it got impetus following rapid degradation of ecosystems, which led to adverse impacts on more than 60 percent of services we get from the ecosystems.

What is Gross Environment Product (GEP)?

  • GEP is the measure of ecosystem services of any area. It reflects the aggregated annual value of goods and services provided by ecosystems (forests, water bodies, oceans, etc.) to people in a given region, such as at district levels, state, and country.
  • It entails the establishment of a natural capital accounting framework by integrating ecological benefits into common measures of economic growth such as GDP.
  • It summarizes the value of ecosystem services in a single monetary metric. Several attempts were made to find ways to address environmental issues.
  • The term “ecosystem services” was coined in 1981 to attract academics towards this aspect.
  • Ecosystem services represent the benefits humans get: Forests, lakes, and grasslands; timber and dyed; carbon sequestration and nutrient cycling; soil formation and productivity; and tourism. The definition is still in the process of evolution. The concept received attention and now is part of global knowledge.


  • GEP can be applied as a scientific basis for Eco-Compensation and public financial transfers.
  • For example, Finance Commission’s revenue-sharing formula between the Union and the states including forest cover as a determining factor in a state’s share.
  • GEP can be applied to measure the status of ecosystem services, which is an important indicator of sustainable development. It is also a critical indicator for measuring the progress of Eco-civilization.
  • Its implementation can help assess the impact of anthropological pressure on our ecosystem and natural resources- air, water, soil, forests.