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I found this variable and I'm not a native english speaker, so I'm a little bit confused with "adjusted savings" right in front of "carbon dioxide damage". I'd like to know what does this variable really means for GDP/PPP.

I have this variable in some big data table and it highly and positively correlates with GDP/PPP value(the higher value, the higher GDP). Should I take this variable in a way that it expresses how much money each country saves(which explains GDP increase) because the country harms less with carbon dioxide than other countries, or what does it actually mean?

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From the definition of adjusted net savings:

Adjusted net savings are equal to net national savings plus education expenditure and minus energy depletion, mineral depletion, net forest depletion, and carbon dioxide and particulate emissions damage.

It is a little easier to see on the World Development Indicators Table 4.11 First few entries of table 4.11

That is: Adjusted net savings = Gross savings - Consumption of fixed capital + Education expenditures -Net forest depletion- Energy depletion - Mineral depletion - Carbon dioxide damage - Local pollution damage

The idea is that ruining the environment is like depreciation in the sense that if you look at savings but ignore depreciation you overstate how much wealth has increased from that savings. Similarly, if you pollute your country that ruined environment makes you poorer than your level of savings suggests.

Update:

Despite the label, you should think of the field "Adjusted savings: carbon dioxide damage" as actually meaning "adjustment to savings from carbon dioxide damage". If you want to calculate national savings rate net of carbon dioxide damage but not net of the other variables, you would calculate it as follows: = Gross savings + Education expenditures - Carbon dioxide damage

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  • $\begingroup$ So does it mean that AS: carbon dioxide damage = Gross savings - Carbon dioxide damage? Or how would you write that equation exactly? $\endgroup$ – KeyWeeUsr May 11 '16 at 15:17
  • $\begingroup$ I don't understand. I posted the equation that relates adjusted savings with gross savings. $\endgroup$ – BKay May 11 '16 at 15:19
  • $\begingroup$ Well, you posted adjusted net savings(i.e. gross savings minus all that stuff), but I have adjusted savings: carbon dioxide damage, so I want to know if my variable means that the gross savings are adjusted only by that damage or how should I look at it?(I need to describe AS: CDO in my paper) $\endgroup$ – KeyWeeUsr May 11 '16 at 15:24

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