Would GDP increase when the environment is damaged by toxic spills and then the damage caused...

Would GDP increase when the environment is damaged by toxic spills and then the damage caused

by these spills is cleaned up?

Solutions

Expert Solution

Would GDP increase when the environment is damaged by toxic spills and then the damage caused by these spills is cleaned up?

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Yes, GDP would increase in this process.

Unfortunately, any component of GDP doesn't take into account any type of damage to the environment. GDP only takes into account production and related economic activity.

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In this case, the generation of toxic waste is due to an economic activity, which should raise GDP.

The transportation of toxic waste is an economic activity, which should raise GDP.

The spilling of such waste is not an economic activity, and it doesn't affect GDP. The fact that it damages the environment is not accounted anywhere.

The cleaning activity of toxic waste is an economic activity, which should raise GDP. Cleaning up will also have other indirect effects on health, quality of life etc., which are not directly measured in GDP.

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Thus, all the associated events, pre and post the spill, except the actual spill itself, are in favor of raising economic activity and GDP.

Rahul Sunny answered 1 month ago

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