A man speaks on his cellphone while walking past an image of gas facilities at the 26th International Oil, Gas, Refining and Petrochemical Exhibition in Tehran on May 13, 2022. (Photo by Morteza Nikoubazl/NurPhoto) Government statisticians have endorsed a new measure of the size of national economies, tackling statistical quirks that led to the contribution of fossil fuels being overstated and that of renewables being under-counted. At the UN Statistical Commission’s annual session in New York last month, all governments decided that net domestic product (NDP) – as opposed to gross domestic product (GDP) – “will be identified as the conceptually preferred measure of economic growth”. They agreed to try and implement these changes through their national statistics offices and central banks by 2029-2030. One key difference, which could support climate action, is that NDP includes the depletion of non-renewable natural resources like coal, oil and gas as a cost of production, shrinking their value in the calculation. Bram Edens, a statistician with the Organisation for Economic Co-operation and Development (OECD), explained that accounting for how reserves of fossil fuels are used up will reduce their value in the same way that the value of buildings or machinery falls due to the wear and tear they suffer over time. Blow to prestige of petro-states During a webinar to explain the change, the International Monetary Fund’s chief statistician Bert Kroese said that most countries NDPs are 10-20% lower than their GDPs. The additional requirement to account for resources depletion, he noted, would reduce most countries’ NDPs by only a “relatively small” amount, but “will have a greater impact on countries which depend heavily on mining and mineral extraction” such as Norway, Russia and Saudi Arabia whose NDPs would shrink on paper by another 10-20%. African banks back oil export pipeline […]
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