Center for Systems Integration and Sustainability

Gross domestic product (GDP) summarizes a vast amount of eco- nomic information in a single monetary metric that is widely used by decision makers around the world. However, GDP fails to cap- ture fully the contributions of nature to economic activity and human well-being. To address this critical omission, we develop a measure of gross ecosystem product (GEP) that summarizes the value of ecosystem services in a single monetary metric. We illus- trate the measurement of GEP through an application to the Chi- nese province of Qinghai, showing that the approach is tractable using available data. Known as the “water tower of Asia,” Qinghai is the source of the Mekong, Yangtze, and Yellow Rivers, and in- deed, we find that water-related ecosystem services make up nearly two-thirds of the value of GEP for Qinghai. Importantly most of these benefits accrue downstream. In Qinghai, GEP was greater than GDP in 2000 and three-fourths as large as GDP in 2015 as its market economy grew. Large-scale investment in restoration resulted in improvements in the flows of ecosystem services measured in GEP (127.5%) over this period. Going forward, China is using GEP in decision making in multiple ways, as part of a transformation to inclusive, green growth. This includes investing in conservation of ecosystem assets to secure provision of ecosystem services through transregional compensation payments.