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Inconsistent Definitions of GDP: Implications for Estimates of Decoupling

Inconsistent GDP Measures Create Ambiguities in Environmental Analysis

Research studies assessing the prospects for uncoupling economic growth from negative environmental impacts have examined the historical relationship between environment outcomes and GDP. The results have been varying and inconclusive. PERI researcher Gregor Semieniuk reviews the history of revisions to GDP for the U.S. case. He shows how, for a range of studies, the estimated relationship between GDP and environmental outcomes is significantly impacted by which definition of GDP researchers use. Semieniuk argues that much more careful treatment of GDP measures is critical for advancing understanding on this major question.


Efforts to assess the possibilities for decoupling economic growth from negative environmental impacts have examined their historical relationship, with varying and inconclusive results. Part of the problem is ambiguity about definitions of environmental impacts, e.g. whether to use territorial or consumption-based measures of environmental impact. This paper shows that ambiguities arising from definitional changes to GDP are sufficiently large to affect the outcomes. I review the history of structural revisions to GDP using the example of the United States, and on international comparisons of purchasing power parity, compare decoupling results using various historical definitions of GDP on the same environmental indicator, and demonstrate that changing the GDP data vintage does impact decoupling results in qualitatively important ways, with and without purchasing power parity. Inconsistencies in economic measurement introduce an additional layer of ambiguity into historical decoupling evidence and model projection into the future. To advance debate and be clear about scenario assumptions, rigorous reporting of GDP definitions used and the sharing of data vintage for subsequent comparison and replication are urgently needed.

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