A Two-Dimensional Adaptive GGDP-Accounting Model

Abstract

The inadequacy of GDP to reflect the depletion of natural resources and the environmental impact of economic activities has raised the necessity to replace it with GGDP. This study aims to develop a comprehensive GGDP metric that incorporates diverse indicators from multiple dimensions and can adapt to changes in indicators over time. Specifically, the study develops a Two-Dimensional Adaptive GGDP-Accounting Model (2-DAG Model). The model involves selecting four aspects, namely Economic Development (ED), Environmental Cost (EC), Technological Progress (TP), and Societal Environmental Protection (SEP). Each aspect is associated with corresponding indicators. ED, EC, and TP are categorized under the Dimension-X, while SEP is placed in the Dimension-Y. The Entropy Weight Method (EWM) is utilized to allocate weights to the indicators within each aspect. The logistic equation is employed to describe the coefficient- in the dimension-x, enabling the construction of the two dimensions. By combining the two dimensions, the final Gross Green Domestic Product (GGDP) value is determined.