This is my biggest issue with the game so far as well. I made a thread a couple of weeks ago where I outlined how it seems a bit strange that the GDP has the same negative impact on the environment regardless of whether your CO2 emissions are maxed out or are completely gone. It doesn’t really make sense to me that when almost every green policy is active, and there is no fossil fuel usage in my country, my environment is only at about 60% still. A fully decarbonized economy would not have such a massive impact on the environment anymore, especially since fossil fuel-related air and water pollution are some of the biggest drivers of environmental degradation. There would certainly still be a negative environmental impact from any economic activity since it is impossible to avoid as humans, but it should not be as big.
I suggested that, much how like the impact on car usage from the petrol tax scales according to the electric car transition value, the impact on the environment from GDP should scale according to CO2 emissions. The lower the CO2 emissions, the lower the GDP impact on the environment, and vice versa. Or alternatively, certain policies like the climate change adaption fund could scale the impact of GDP on the environment to account for the fact that those negative impacts are being mitigated.