Transcript Open - The Scottish Government

Additional Measures of
Progress for Scotland?
Dr Karen Turner
Senior Lecturer, Department of Economics
and Fraser of Allander Institute
University of Strathclyde
4 October 07
Problem
•National income as currently measured not sustainable income
•Satellite accounting – ‘baskets’ of individual sustainability indicators
•Is it reasonable to measure and report sustainability in a single
number or composite measure?
•Work with Scottish Government reporting to Steering Group on
Additional Measures of Progress
Defining sustainability – Brundtland and
Hicks
•Adjusted GDP/net savings measures
• GDP net of depreciation capital/productive capacity
• National rather than domestic product
• Different types of capital – distinguish types of natural capital
• Green Net National Product?
• Measurement issues
• Focus on depreciation and reinvestment in capital (Genuine Savings)
• Tend to correspond to Brundtland – Hicksian definition sustainable
income…future generations
•But, focus may be wider:
• Global system sustainability - ‘importing sustainability’?
• Welfare, well-being, happiness of current generation? ‘Quality of life’
• Appropriate to attempt to measure in single indicator?
‘Baskets’ of composite indicators
•Problem of ‘hidden’ or ‘cancelling’ effects
•Argument – not appropriate to integrate economic, well-being and
environmental sustainability?
•Role of composite – to simplify and aid communication and
comprehension
•‘Basket’ of composites (each with underlying individual) may be
appropriate)
•E.g. GDP, HDI and GS? (issue of international comparability)
Practical implications
•Combined use of composite and individual indicators (local and/or global
concerns)
• ‘Hidden’ and ‘cancelling’ effects
• Large ‘baskets’ of individual indicators
• Complements rather than substitutes
•International comparability?
•Trade-off:
• Weights and components reflecting country-specific preferences
• Political process and preferences differ across countries
• Set against monitoring government/country relative to others
Key issues/questions arising (1)
•What do we mean by sustainability, what are Scotland’s sustainability
objectives?
• i.e. what is/are a composite indicator(s) required to measure/reflect?
•Distinguish different types of sustainability concern
• Local quality of life and global system sustainability (and other where
binding constraints apply)
• Different implications for the development and use of individual and
composite indicators
•How is the indicator to be used?
• E.g. international comparability – trade-off indicator that is comparable
with other countries with one that reflects local priorities and preferences
Key issues/questions arising (2)
•Should we consider ‘baskets’ of composite indicators?
• Different indicators for different objectives and purposes?
• Key feature of clarity of communication and comprehension
•Distinguishing issues that require the input of experts from those that are best
addressed through the political process
• Valuation/measurement and technical aspects of aggregation
• Selecting and weighting components relating to QOL (welfare, wellbeing, happiness)
•If candidate indicators are identified, are data available to construct them to an
acceptable standard?
• Pre-requisite to improve quality and reporting of economic,
environmental and social data in consistent and compatible formats