Green GDP accounting - which takes into account the impact of environmental degradation on the economy - has hit a snag, a source with the environmental watchdog said.

The National Bureau of Statistics (NBS) has asked the State Environmental Protection Administration (SEPA) not to release the latest results of Green GDP to the public and keep them only as a reference for policymakers, said the source.

The NBS and SEPA jointly released the Green GDP accounting for 2004 last September amid much fanfare; and the results for 2005 were planned to be released this month by SEPA.

"Experience has shown that both the theory and the methodology of Green GDP accounting are not sophisticated enough," the NBS said in the letter obtained by China Daily. "There are lots of difficulties in the pilot project."

The NBS said that the results would be sent to the State Council, the Cabinet, which would decide whether to publicize them.

The SEPA and NBS jointly launched the project in March 2004 to drive home to the public and officials the waste created and environmental damage wrought in the process of economic growth.

Simply put, Green GDP is calculated by deducting the cost of natural resources' depletion and environmental degradation from traditional GDP.

The country's first Green GDP report showed pollution caused losses of 511.8 billion yuan ($64 billion) in 2004, or 3.05 per cent of the 16 trillion yuan ($2 trillion) GDP that year.

At the news conference marking the release of the report, Pan Yue, vice-minister of SEPA, said the figures marked "only the beginning of our efforts in calculating Green GDP".

But soon after the report was released, some of the 10 provinces and municipalities in the pilot project were reluctant to continue their participation and wanted to pull out because of concerns that regional economic growth could be hit.

"It is good news if the suspension of the release of figures could improve the system of Green GDP accounting, as well as its implementation," said Zheng Yisheng, professor at the Center for Environment and Development affiliated to the Chinese Academy of Social Sciences. "But it is a pity if it means an end to Green GDP accounting."

(China Daily 03/23/2007 page1)