In 1929, the U.S. stock market crashed, leading to a global economic collapse, or what we now call the Great Depression.

The groundwork for this had been laid years earlier, during the years known as the “Roaring Twenties.” After World War I, U.S. factories were abuzz with activity. People splurged and businesses thrived.

But beneath the surface, problems were brewing. Economic optimism meant that many people borrowed money to buy stocks, paying only a small upfront margin. So when stock prices temporarily fell, those borrowers couldn’t repay their loans. Panic spread, followed by desperate sell-offs, and banks collapsed. This spiral devastated economies until a slow recovery began after World War II.

During this time, U.S. policymakers struggled to figure out how to put numbers on what was happening in the economy. That’s when Russian economist Simon Kuznets came into play. It’s called Gross National Product, or GNP. But if we tweak it a bit to exclude what American companies produce abroad, we can get a better sense of how the U.S. economy is doing."

And so we get Gross Domestic Product (GDP).

Simply put, GDP is the annual value of all goods and services produced within a country. It became the global standard for measuring economies at the Bretton Woods conference in 1944.

But here's something I haven't told you yet. Kuznets not only created GDP, he also warned you not to rely entirely on it. "The welfare of a nation cannot be inferred from a measure of national income," he said.

Simply put, GDP captures production and consumption, but ignores critical aspects such as environmental damage, resource depletion, or even a country's overall well-being. Or, as economist Diane Coyle puts it, GDP is a "wartime measure." It's useful during crises, but it says little about creating happiness in peacetime. What furniture made from felled trees is It says how valuable it is, but it doesn’t say how valuable the value of the environmental value of that tree is when it is planted and grown.

That’s why some countries are experimenting with ways to improve GDP.

This is where Green GDP comes in, a concept that subtracts environmental costs such as pollution and deforestation from traditional GDP. Taking these into account gives governments more reason to protect the environment because they know it directly affects their economic outcomes.

If you’re wondering how, Green GDP is not a new idea. More than three decades ago, the UN (United Nations) proposed a methodology for calculating it. Countries such as the US, China and Norway have tried Green GDP by subtracting the proposed environmental costs from traditional GDP.

But the idea didn’t catch on. Norway, for example, found that its valuation techniques for environmental depletion were inconsistent. The US abandoned the idea when it came to the environmental costs making GDP figures look weaker. China also dropped the idea in 2005 after resistance from local governments.

So the UN revised the concept to address these challenges, introducing ways to account for environmental services such as clean air, water and biodiversity. This meant that policymakers could now highlight not just the negatives, such as resource depletion, but also the positives, such as nature’s contributions.

But does this really make sense?

Environmental degradation is often tracked using satellite imagery taken at specific times. Governments can manipulate this by choosing when to monitor forests, conveniently hiding issues such as stubble burning. It’s like sweeping the mess under the rug and declaring the room clean.

In addition, planting trees is not always beneficial. For example, planting trees in grasslands or wetlands can harm native species, disrupt ecosystems and destroy biodiversity. Even the type of tree matters. Native, mature trees are excellent at absorbing carbon and supporting wildlife, while young or non-native trees often fall short.

Here’s a thought to ponder – governments often promote Green GDP to serve their own agendas, whether it’s to secure international funding or to burnish their environmentally friendly image.

Without a clear methodology, this strategy can be quickly exploited and the modified Green GDP can be used as a convenient disguise. This is a slippery slope and that is why it is so important to examine these metrics.

So yes, perhaps it is time for governments to reconsider this and agree on a standard framework. A framework that clearly defines what is included and what is excluded when converting ecological services into numbers. They will also need to ensure transparency so that analysts and critics can examine the data and trust the calculations.

Otherwise, the concept risks becoming just another empty buzzword.

After all, green GDP should be a mirror that reveals both progress and loss, not a tool for telling comforting stories.