Denmark is no longer only going to calculate economic growth in financial terms. The government is to introduce a Green GDP in the form of how much growth affects nature, according to Development Aid Minister Christian Friis Bach (SocLib).

“Targets for growth are currently much too simple,” Friis Bach says as the Rio summit approaches.

In order to move the proposal forward, Denmark is to provide DKK10million to the World Bank for research into green indicators, and will put itself forward as a pilot for the calculations the bank recommends.

The goal is to development a system whereby the Economy Ministry will publish environmental developments in the same way that economic indicators are produced each quarter.

The World Wide Fund for Nature (WWF) says the introduction of green targets is ‘one of the most important steps ever’ in moving to the global green economy that is high on the agenda of the of the UN summit in Rio that begins on Wednesday and ends on Firday.

“Right now the economic GDP indicators cheat,” Environment Policy Spokesman John Nordbo says.

Nordbo explains that if all the fish in Danish waters were caught, and the entire Rold Forest was felled, this would show up as short-term economic growth. In the long term, however, both the economy and environment would be adversely affected.

Friis Bach is therefore looking to put a value on environmental degradation, which would then be subtracted from the national accounts.

Richard Dobbs, who heads McKinsey’s Global Institute research department says the initiative is a good one. But he adds that it is a waste of time to concentrate too much on measuring a green GDP as showing consideration for the environment will be the key to success anyway as the global middle class gets bigger and bigger.

Resources such as water and energy will be under pressure, resulting in countries and companies that have understood to save their resources also being those who earn most – irrespective of whether you measure green GDP or not.

“My worry is that measuring green GDP will end up in theoretical discussions rather than action. Denmark will have to do what is necessary to achieve a good green GDP anyway,” Dobbs says.

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