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The way we measure economic health is flawed, according to new research from the Stanford-based Natural Capital Project. When we talk about a country’s economic prosperity, we’re almost always referring to gross domestic product, or GDP, a calculated value based on the goods and services that flow through an economy. But GDP doesn’t account for many of the benefits that people and economies receive from nature, like clean water and climate security.
To address this economic gap, Stanford researchers developed a new metric for measuring the value of nature’s contributions to economic activity. Their study, published in Proceedings of the National Academy of Sciences, details how the approach, known as Gross Ecosystem Product (GEP) is being successfully implemented in China.