The difficulty of protecting the environment and addressing climate change is partly linked to what economic indicators leave out. Gross domestic product measures production, but not wealth in the broad sense or overall well-being. It also does not subtract key forms of natural-capital degradation from national wealth, nor does it account for many benefits that nature provides free of charge.

According to environmental economist Katheline Schubert, this is not a flaw in GDP itself, since the indicator was designed for another purpose. The problem arises when GDP is used as the sole measure of economic performance. Values that markets do not reflect can then have little influence on public decisions.

Economists have developed methods to make some of these values more visible. For climate policy, one approach begins with collective emissions-reduction targets and estimates the cost of the transformations required to meet them. This is the basis of the “value of climate action,” examined in a 2025 report by a commission chaired by Alain Quinet.

The value was estimated at 256 euros per tonne of carbon-dioxide equivalent in 2025. It represents the value society must assign to avoiding one tonne of emissions in order to meet climate objectives at the lowest possible cost. The measure can be used to compare investments in transport, buildings and industry by considering both their financial costs and their decarbonisation benefits, helping direct public action towards the most effective solutions.

The same question arises in national accounting. In experimental work published in 2024, France’s Insee proposed adjusting net domestic product—GDP minus the depreciation of equipment—to reflect the degradation of climate capital and the depletion of the carbon budget. The latter refers to the maximum amount of carbon dioxide that can be emitted while retaining the objective of limiting warming to an agreed level.

Insee estimated this adjustment at 4.1% of net domestic product in 2023. It combines an estimate of climate-related damage with the implicit value of the constraint placed on future emissions. These calculations illustrate how national accounts could better show the long-term consequences of current production: environmental damage and the depletion of the carbon budget reduce future generations’ possibilities for production and consumption.

Sources: Le Monde Économie.