Economic Impact Of Gross Domestic Product

Decent Essays

5. Economic Perspective
In a previous section the researcher mentioned that as a countries’ economic performance, wealth and prosperity, improves, households will have more income to spend, which leads to more consumption and, consequently, more waste production. The Bloomberg Economist Michael McDonough studied the correlation of GDP and trash and he discovered a similar positive relationship between a countries’ GDP and its total waste production (See Figure 16) (McDonough). The Gross Domestic Product (GDP) is the total monetary value of all, domestically, produced final goods and services during an annual basis (Investopedia). He explains that everything that people throwing away, not only consumer products but also buildings being …show more content…

McDonough discovered waste has an 82% correlation to US economic growth by examining the Association of American Railroads (AAR) carloads of trash with the U.S. GDP. The U.S has experienced a GDP decline of approximately 20% between 1994 and 2012 and a decline of waste production of approximately 30% (See Figure 16) (McDonough). From Figure 16 one can see that something is wrong in the economy, potentially, in the underlying economy. And that recent downturns in the waste production is concerning regarding the near term direction of the overall US economy.
Figure 16: AAR Waste Carloads compared to U.S. GDP
Therefore, this correlation makes it clear that countries need to have the right tools to deal with the increasing amount of waste in order to minimize both the economic costs, and the environmental negative effects that come with waste. One can argue that recycling is one of the best tools to fight the increase in waste production. Recycling would not only lower the total amount of waste that needs to be disposed of in the end of the waste stream, which would reduce both the cost and the environmental damage, but recycling would also lower the need to use virgin raw materials, which reduces the strain on natural resources.
Some might say that the problem is that while growth in GDP has a clear relationship with waste production, there is not a clear

Get Access