Transcript No Slide Title

Beyond GDP: New Measures
of Wellbeing and Progress
Jānis Brizga
Pasaules dabas fonds
Content of presentation
• Myth about growth
• Alternative measures
• Example of ecological footprint
World population map
Myth about Economic Growth
• Resource depletion – next generations
• More consumption, energy use, greenhouse
gas emissions, make economy grow, but are
we better off?
• External costs
• Crime, sickness, pollution, accidents make
economy grow — just because money is being
spent.
Wrong messages
• GDP can grow even as poverty and
inequality increase;
• More work hours make economy grow - free
time has no value – affects health (stress);
• GDP ignores work that contributes directly to
community health (volunteers, work at
home).
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Values, elements of wellbeing
Health
Security
Knowledge
Community
Freedom
Ecological integrity
Equity
Expanded definition of capital
Different SDI approaches
grouped around a policy cycle
Different SDI approaches grouped around a policy
cycle (Source of policy cycle: de Ridder et al., 2006)
The Genuine Progress Index
(US, Australia only)
or Index of Sustainable Welfare
or Measur of Domestic Progress (UK only)
GPI is calculated by adjusting GDP by subtracting social and environmental
costs, and adding in the value of non-market productive activity, such as
volunteer work and child rearing.
Calculated by NGOs and think tanks - Redefining Progress (GPI, 2006, U.S.
only); New economics foundation (MDP, 2004; UK only); Friends of the Earth
UK and New economics foundation (ISEW)
Adjusted Net Savings (Genuine
Savings) – World Bank
ANS = Net savings - resource depletion & environmental
degradation + the value of investment in human capital.
Negatively adjusted net saving rates imply a total wealth in decline. The basic idea
behind this concept is that only net savings increase wealth. While the standard national
accounts solely show change in physical capital, i.e. man-made assets like machinery
and infrastructure, 'genuine savings' strive to include the natural, environmental and
human capital as a source of wealth.
Adjusted Net Saving
rates by region (% of
GNI)
Human Development Index (UNDP)
The HDI was designed as a measure for progress in developing
countries beyond simple income figures such as GDP. A long and
healthy life, knowledge and a decent standard of living are
considered as the three key elements of development. Therefore,
data on life expectancy, adult literacy, school enrolment and GDP
are combined to calculate the index.
Gross National Happiness
(Kingdom of Bhutan)
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The four pillars of GNH are:
sustainable and equitable socio-economic development;
preservation and promotion of cultural values;
conservation of the environment; and
establishment of good governance.
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Application: GNH is not a quantified measure. Rather, happiness is the
guiding framework for the country’s five-year planning processes.
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Assessment: After two international conferences about the concept of
GNH, the current focus is to develop indicators to measure GNH. A target
date to complete a first set of indicators is 2008, when the first democratic
elections in Bhutan will be held.
Happy Planet Index
(The new economics foundation)
HPI = (Life satisfaction x Life expectancy) / Ecological Footprint.
Quality of life indices (generally): Research on quality of life
goes beyond economic and environmental statistics and includes
surveys to get information directly from the individual. Various
indexes for quality of life have been developed by different
research teams. The aim is to monitor the state and development
of quality of life for different countries and various social groups.
Moreover, these studies seek to find correlations with socioeconomic data to identify drivers for well-being and happiness.
Ecological footprint
EF measures the amount of natural resources an individual, a community, or a
country consumes in a given year.
To understand the humanity’s footprint we need to know two key things:
- Ecological Supply (the available biocapacity / ecological capacity)
- Ecological Demand (our use of biological resources / the footprint).
 Compares human consumption of natural resources with the planet’s
ecological capacity to regenerate them
 Assumes current technology levels, and looks at the amount of area needed
to generate and to dispose of waste.
Land use categories
Total territory of the World is 51 bil. ha.
Out of that:
• 36,6 bil. ha is water;
• 14,4 bil. ha is terrestrial land;
• 11,2 bil. ha are biologically productive territory
Cropland – 1,5 bil. ha
Pasture – 3,4 bil. ha
Forest – 3,7 bil. ha
Sea space – 2,4 bil. ha
Built-up land – 0,2 bil. ha
Carbon storage areas
Needs of other species – 12%
World population: September 2007 – 6,6 mil.
Available productive land per capita 1,7 ha
Measuring (un)sustainability
• European footprint – 4,8 ha
• US footprint – 9,6 ha
• Average European needs 3 planets
• Average American needs 5 planets
EF and Growth in EU
20
years
ago
and
now
EE
LT
LV
Ecological dept
Future scenarios
1) Inerce (40 planētas biokapacitātes gadi
līdz 2050.g);
2) neskārti 50% no ekosistēmām
3) neskārti 67% no ekosistēmām
4) neskārti 88% no ekosistēmām
Solutions