Tag Archive: population


Retire the GDP

We need to stop trying to measure progress by calculating the worst our society has to offer.

Extensive research has revealed that the dramatically escalating consumption of the last half century has brought no increase in the satisfaction levels of Americans. According to Manfred Max-Neef’s “Threshold Hypothesis” when macroeconomic systems expand beyond a certain size, the additional benefits of growth are exceeded by the attendant costs. (Max-Neef 1995.)

And as Elizabeth Kolbert eloquently illuminates in the New Yorker:

But let’s imagine, for a moment, that we had enjoyed ourselves for the past fifty years. Surely, trashing the planet is just as wrong if people take pleasure in the process as it is if they don’t. The same holds true for leaving future generations in hock and for exploiting the poor and for shrugging off inequality. Happiness is a good thing; it’s just not the only thing.

And this is all to say nothing of the actual dollars and cents value of the contributions of nature to our fiscal progress. Whether you’re using the GDP or something more realistic, you can’t discount the $33 trillion per year (in the 1990’s) that nature contributes to our economy (as calculated by Robert Costanza and other theorists of natural capital). Researchers arrived at the figure by analyzing 17 specific areas of contribution by the natural environment, including water filtration, pest control, pollination and erosion control among others.

So what are the alternatives? Measuring and evaluating our progress as a society is important work and we don’t want to “throw the baby out with the bath water”. Enter the Genuine Progress Indicator or GPI. Developed in 1995 by a few geniuses in California, it was promptly and whole heartedly endorsed by about 400 other geniuses (Nobel laureates, economists, business leaders etc) in the following joint statement:
Since the GDP measures only the quantity of market activity without accounting for the social and ecological costs involved, it is both inadequate and misleading as a measure of true prosperity. Policy-makers, economists, the media, and international agencies should cease using the GDP as a measure of progress and publicly acknowledge its shortcomings. New indicators of progress are urgently needed to guide our society…The GPI is an important step in this direction.
The creator of the GDP himself even warned of its limitations:
The welfare of a nation can scarcely be inferred from a measurement of national income… Goals for “more” growth should specify of what and for what.
A group in Nova Scotia currently working towards a shift to the GPI astutely observes
The things we measure and count — quite literally — tell us what we value as a society and determine the policy agendas of governments.
The GPI may not be the last word in progress measurement, but it is certainly a more complete indicator than what we’re currently working with. The group in Nova Scotia has this to say about the scope of the GPI
The GPI system and framework is based on a capital accounting framework, in which the value of human, social, and natural capital are recognized along with the manufactured and financial capital that are currently measured. Like conventional capital, this human, social, and natural capital is seen as subject to depreciation, and requiring re-investment in the event of depletion or degradation. Based on this approach, the GPI assesses the economic costs of liabilities like crime, pollution, sickness, and natural resource depletion, rather than counting defensive expenditures in these areas as contributions to prosperity (as current measures do).
At this point, it’s safe to assume that as the GDP increases the actual quality of life will be decreasing. What does that say about the relevance of financial capital to social capital?
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The Happy Planet Index is economics at its most basic: Input vs Output of a system. With one small difference. It’s focus is on efficiency or true economy. The New Economics Foundation, a “think-and-do-tank” that breathes some life into the musty theories of economics, has taken on the considerable task of demonstrating and then communicating that our lives can be rich and fulfilling without destroying the planet through their Happy Planet Index. It seems like they’ve succeeded in creating something imminently understandable yet profound.

The HPI reflects the average years of happy life produced by a given society, nation or group of nations, per unit of planetary resources consumed. Put another way, it represents the efficiency with which countries convert the earth’s finite resources into well-being experienced by their citizens.

Attempting to quantify and measure the happiness level of a group of people is a daunting and controversial task whose very feasibility has been debated since the beginning of time. With a clear understanding of the complexities at play, here’s what the HPI team has to say:

In recent years, the debate has moved from philosophy to the realm of science, with a growing body of research identifying what it means to be happy, what drives it and how to measure it. For us, being ‘happy’ is more than just having a smile on your face – we use the term subjective well-being to capture its complexity. Aside from feeling ‘good’, it also incorporates a sense of individual vitality, opportunities to undertake meaningful, engaging activities which confer feelings of competence and autonomy, and the possession of a stock of inner resources that helps one cope when things go wrong. Well-being is also about feelings of relatedness to other people – both in terms of close relationships with friends and family, and belonging to a wider community.

Understanding the ecological footprint of an individual or group is relatively straightforward by comparison, but their attempt to break it down is still worth a read.

From here it’s just a matter of plugging the data into their elegant equation and making sense of the results.

The HPI shows that around the world, high levels of resource consumption do not reliably produce high levels of well-being, and that it is possible to produce high well-being without excessive consumption of the Earth’s resources. It also reveals that there are different routes to achieving comparable levels of well-being. The model followed by the West can provide widespread longevity and variable life satisfaction, but it does so only at a vast and ultimately counter-productive cost in terms of resource consumption.

The complete results for over 140 countries can be found here. You probably won’t be surprised to see that the US falls into the “blood red” footprint category and shares the crown with most of Africa, Cambodia and Iraq.

And why is this measurement not only relevant but critically important? Once again the near religious worship of Growth as the means to any end is proving to be no more than an academic concept that becomes incredibly destructive when put into practice.

Biologists talk about physical growth as a process which has an optimum level beyond which further growth is not beneficial, and can indeed turn malignant. Economic growth can be subjected to the same analysis. Aside from the obvious environmental impacts which we have already discussed, there is gathering evidence that an obsession with growth may have led us to ignore other aspects of life critical to our well-being. This is where the HPI has a crucial role: pointing us towards a new vision of progress which does not depend on ever-increasing growth.

During an economic crisis, it may seem inopportune to question the centrality of economic growth. Now more than ever, governments around the world are desperate to restart growth by any means possible. And yet we should not lose sight of the fact that economic growth is just one strategy to achieve well-being and, in terms of natural resources, a demonstrably inefficient one. Rather than pursuing growth at all costs, even if detrimental to well-being or sustainability, leaders should be striving to foster well-being and pursue sustainability, even if detrimental to growth. The horse and the cart need to be returned to their rightful places.

 

The Pop Clock

Watch the population exploding in real-time by going to Pop Clock. Once there, hit refresh every few seconds for a very interesting show.

 Graph: Oil Drum
Photo: Outr Blog