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Gross World Product 2007
In 2007, gross world product (GWP)—the aggregated total of all finished goods and services produced worldwide—was expected to grow 5.4 percent to $72.3 trillion (in 2007 dollars).1 (See Figure 1.) This estimate reflects actual purchasing power in countries (that is, in purchasing power parity or PPP terms). The market exchange rate GWP, which is based on straightforward monetary terms, was expected to reach $53.4 trillion, an increase of 8 percent since 2006.2 The projected growth of GWP (PPP) in 2007 was revised downward from earlier estimates due particularly to economic disruptions in the U.S. housing market, which also had ripple effects in other countries, particularly within Europe and in Japan.3 Even with this late-term contraction, growth in 2007 was still expected to be higher than the average since 1970.4
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Although the U.S. economy still accounts for 19 percent of the world total, China is closing the gap—now accounting for 16 percent of GWP, up from 15 percent in 2006.9 China’s gross domestic product (GDP) grew dramatically in 2007, jumping an estimated 11.7 percent and making up one third of the projected $3.7 trillion in GWP growth in 2007.10 Increases in exports and investments drove this expansion.11
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India’s economy was expected to grow 9.1 percent in 2007, accounting for 11 percent of total GWP growth—more than the U.S. contribution.17 Growth in the world’s second most populous nation was mainly driven by domestic demand.18
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Economic growth is having a direct impact on the ecological systems on which the human economy depends. As the U.N. Environmental Programme’s recently published Global Environmental Outlook–4 notes, human society is using the world’s renewable resources unsustainably, thus degrading farmland and fisheries, rivers and forests.24 And society is risking a significant weakening of the global economy if unsustainable resource use is not addressed. In particular, climate change could reduce economic growth by anywhere from 5 to 20 percent by 2100 if left unchecked.25
These warnings are not new. In 2005 the Millennium Ecosystem Assessment made it clear that nearly two thirds of ecosystem services have been degraded or are being used unsustainably, and indicators like the Ecological Footprint have demonstrated that human society has been living beyond its means since 1987.26 According to this measure, humans are now using the equivalent of 1.25 planets’ worth of resources.27 (See Figure 4.) In short, without dramatic redesign of the global economy to reduce the ecological impacts, growth will most likely plummet
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(contd)
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Although the U.S. economy still accounts for 19 percent of the world total, China is closing the gap—now accounting for 16 percent of GWP, up from 15 percent in 2006.9 China’s gross domestic product (GDP) grew dramatically in 2007, jumping an estimated 11.7 percent and making up one third of the projected $3.7 trillion in GWP growth in 2007.10 Increases in exports and investments drove this expansion.11
.
.
.
.
India’s economy was expected to grow 9.1 percent in 2007, accounting for 11 percent of total GWP growth—more than the U.S. contribution.17 Growth in the world’s second most populous nation was mainly driven by domestic demand.18
.
.
.
Economic growth is having a direct impact on the ecological systems on which the human economy depends. As the U.N. Environmental Programme’s recently published Global Environmental Outlook–4 notes, human society is using the world’s renewable resources unsustainably, thus degrading farmland and fisheries, rivers and forests.24 And society is risking a significant weakening of the global economy if unsustainable resource use is not addressed. In particular, climate change could reduce economic growth by anywhere from 5 to 20 percent by 2100 if left unchecked.25
These warnings are not new. In 2005 the Millennium Ecosystem Assessment made it clear that nearly two thirds of ecosystem services have been degraded or are being used unsustainably, and indicators like the Ecological Footprint have demonstrated that human society has been living beyond its means since 1987.26 According to this measure, humans are now using the equivalent of 1.25 planets’ worth of resources.27 (See Figure 4.) In short, without dramatic redesign of the global economy to reduce the ecological impacts, growth will most likely plummet
.
.
.
(contd)