OECD World Forum 2012 confirms that world has embraced new measures of progress Reply

At a World Forum of leading economists, chief national statisticians, and many other experts, organized by the OECD and the Government of India, it became clear that new ways of measuring overall progress — in parallel to, or even in replacement of, the GDP — have now became mainstream.

Speakers [including Alan AtKisson, lead author of Life Beyond Growth] reported on dozens of projects at the national government level to measure national wellbeing, by both objective and subjective means, and sometimes the two in combination. While challenges remain, both technical and political, alternative measurements have achieved a level of momentum and global critical mass that appears irreversible. The indicators are also grappling with system sustainability issues such as future risk (in general terms), and with the factors and policies that produce better outcomes, using these new measures.

Speakers also outlined the needs, both political and research-oriented, for further development. For example, environmental measures still lack the robustness needed to “dialogue” effectively with the GDP, said the European Commissioner for Environment, Karl Falkenberg. And measures of social wealth are still far from parity with measures of economic wealth in technical terms.

But the direction of change is now well-established. Materials from this conference, including speaker presentations, are available at the conference website: http://www.oecd.org/site/worldforumindia/

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Inclusive Wealth Report 2012: UN’s new approach to measuring the sustainability of countries Reply

The United Nations University International Human Dimensions Programme on Global Environmental Change (UNU-IHDP) and the United Nations Environment Programme (UNEP) in collaboration with the UN Water Decade Programme on Capacity Development (UNW-DPC) and the Natural Capital Project have released a new report, titled “Inclusive Wealth Report 2012” (IWR 2012) at the Rio+20 conference.

The report is first in a series of biennial reports aiming to track the sustainability of countries using a newly developed measure, the Inclusive Wealth Index (IWI). The IWI aims to go beyond the present generation of short-term economic and development measures, such as the gross domestic product (GDP) and the Human Development Index (HDI). The IWI has been developed to capture the full wealth of nations by looking into country’s capital assets, including manufactured, human and natural capital, and its corresponding values.

In the Inclusive Wealth Report 2012, twenty countries were assessed using the IWI over a period of 19 years (1990-2008). Together they represent more than half of the world population and almost three quarters of world GDP and include high, middle, and low-income economies on all continents.

Some of the key findings of the IWR 2012 included:

  • 70 percent of countries assessed  present a positive Inclusive Wealth Index (IWI) per capita growth, indicating sustainability.
  • High population growth with respect to IWI growth rates caused 25 percent of countries assessed to become unsustainable.
  • While 19 out of the 20 countries experienced a decline in natural capital, six of them also saw a decline in their inclusive wealth, thus following an unsustainable track.
  • Human capital has increased in every country, being the prime capital form that offsets the decline in natural capital in most economies.
  • 25 percent of assessed countries, which showed a positive trend when measured by GDP per capita and the HDI, were found to have a negative IWI.
  • The primary driver of the difference in performance was the decline in natural capital.

Based on these key findings, the report offers a set of recommendations to national-level policy-makers. It calls on countries to:

  • Build up their investments in renewable natural capital
  • Mainstream the Inclusive Wealth Index within planning and developing ministries
  • Support/speed up the process of moving from an income-based accounting framework to a wealth accounting framework
  • Move away from GDP per capita
  • Establish research programs for valuing key components of natural capital, particularly ecosystem services.

The next issue of the Inclusive Wealth Report is expected to be released in 2014 with a special focus on social capital.

Link: UNU-IHDP Inclusive Wealth Report news

Ecologic Institute started to fill the gap on measures of sustainable industries Reply

The Ecologic Institute, a private not-for-profit think tank, has released a new report on resource efficiency indicators and their potential use for measuring progress towards sustainable industries. The report, titled “Integrating resource efficiency, greening of industrial production and green industries – scoping of and recommendations for effective indicators,” is the outcome of work undertaken by the Ecologic Institute as part of the process of establishing a Green Industry Platform by the United Nations Industrial Development Organization (UNIDO) in 2012.

The authors of the report note that there currently appears to be a gap concerning indicators for measuring progress towards sustainable industries and sustainable industrial development (including the greening of industries, progress achieved in green industries, and greater resource efficiency in industrial production) and this report aims to contribute to filling this gap.

The report uses the Life Cycle Assessment (LCA) as an organizing framework for systematic evaluation of the existing indicators as a measure of resource efficiency. The 10 most promising indicators considered in this study are:

  • Environmentally weighted material consumption (EWC)
  • Energy intensity by sector
  • Production based CO2 productivity
  • Water consumption by sector
  • Sustainable Process Index (SPI)
  • Water abstraction rates and water stress
  • Corporations’ turnover, value added and exports of the environmental goods and services sector
  • Resource Productivity / Material Productivity
  • Total Material Consumption (TMC)
  • Ecological Footprint (EF)

The authors suggest that since there exist many different aspects of industrial production it is only logical to consider building a basket of indicators that jointly give a more comprehensive picture than any of the indicators could give alone. They propose 4 different dimensions of sustainable industrial development to be part of the basket, namely:

  • Protection of critical environmental goods and services;
  • Minimal environmental impacts;
  • Efficient resource-use; and
  • Social and economic aspects of industrial production.

Based on the reviews conducted in report the following indicators are proposed to be included in the basket:

  • EMC (or eco-efficiency or overall environmental impact indicator) to capture environmental impacts;
  • Energy intensity by sector and production-based CO 2 productivity to cover the critical environmental areas energy and climate change;
  • Water productivity by sector and water stress to capture resource efficiency for a second critical environmental resource; and
  • Resource productivity (or TMC over GDP) to capture resource efficiency.

The authors note that the social aspects of sustainable industry have not been within the scope of their analysis, but should be considered in the development of the basket. They also highlight that this scoping study did not provide the necessary frame to develop a fully fledged analysis or road-test the proposed indicator basket and that such research tasks should be undertaken in followup projects under the auspices of UNIDO.

Link: Ecologic Institute download site of the report

New Happy Planet Index Report: Costa Rica tops the HPI for the second time Reply

Nef (the new economics foundation) has recently released “The Happy Planet Index: 2012 Report,” nef’s third global report based on one of the leading global measures of ‘sustainable well-being’, the Happy Planet Index (HPI).

HPI is a measure of progress that uses global data on experienced well-being, life expectancy, and Ecological Footprint to generate an index revealing which countries are most efficient at producing long, happy lives for their inhabitants, whilst maintaining the conditions for future generations to do the same. This efficiency is expressed in the number of Happy Life Years (life expectancy adjusted for experienced well-being) achieved per unit of resource use.

The results in this year’s report show that we are still not living on a ‘happy planet’ (similarly as the results in the past reports -published in 2006 and 2009 – suggested). At the present time, no country is able to combine success across the three goals of high life expectancy, high experienced well-being and living within environmental limits. The positive news is that at least some countries, like Costa Rica, are coming close.

In fact, Costa Rica tops the Happy Planet Index for the second time in a row. It has the second highest life expectancy in the Americas, experienced well-being higher than many richer nations, and a per capita Ecological Footprint one third the size of the USA’s. Norway, in 29th place out of 151 countries, is the highest ranking Western European nation, just behind New Zealand in 28th place. The UK ranks 41st and the USA ranks 105th out of 151 countries.

Nic Marks of nef highlights that “overall, the HPI reflects the fact that while the challenges faced by rich resource-intensive nations and those with high levels of poverty and deprivation may be very different, the end goal is the same: to create long and happy lives that don’t cost the Earth.” He also notes that “if things are to improve we need new official measures of progress” [italics added]. This is why nef came up with the Happy Planet Charter alongside the report to underline the urgent need for better measures of progress. More information on this can be obtained at the Happy Planet Index website.

Link:

Happy Planet Index website

New measure of prosperity for Scotland: Oxfam Humankind Index Reply

Oxfam, the UK’s leading aid and development charity, has launched a new index for measuring quality of life and social justice in Scotland – the Oxfam Humankind Index (HMI). The index, developed by the Oxfam’s Scotland Office, is largely based on information from public consultations and surveys with a particular focus on seldom heard groups such as African refugee women, young people living in poverty in rural areas or people with learning disabilities.

Oxfam worked in partnership with the New Economics Foundation, who processed the compiled information from the public consultations to produce a series of weighted priorities set for Scotland by the people of Scotland. The index consists of 18 measures in five domains (Social, Human, Nature & Environment, Financial, Physical Resources) ranging from good family relationships, having secure and satisfying work, a decent home, good local facilities and transport to access to green areas.

Judith Robertson, the head of Oxfam Scotland, said the index “goes beyond simplistic economic measures like GDP. It reminds us that the economy should serve its people, not the other way around.”

The first assessment of Scotland’s performance using HMI showed that the country’s overall prosperity increased by 1.2% between 2007-08 and 2009-10, largely due to improvements in how people felt about their health and community spirit.

HMI is now being considered also by senior Oxfam executives for use across the UK and as part of the charity’s work on sustainable living and on new measures of inequality, as well as by Oxfam offices overseas in “middle economy” countries such as Brazil. The charity is also  encouraging local and national government to examine these results in order to plan and prioritize their future actions.

Link: Oxfam Humankind Index (HMI), Guardian article about HMI

Civic Exchange developing an index for measuring well-being in Asian cities Reply

Civic Exchange, a Hong Kong-based non-profit public policy think tank, has produced a new report titled “Measuring Well-Being in Cities – A Literature  Review.” This Asian think tank is working on creating a tool – a well-being index for Asian cities – that can harness the power of indices plus engage people on issues of civic importance. The newly released report reviews a range of existing indices of well-being, quality of life and liveability, which have been consulted by the think tank’s researchers in developing the new index for Asian cities.

The review identifies six “approaches” to developing indices for well-being, including:

  • Human development (e.g. GDP, Human Development Index, Gross National Happiness, or China’s Xiaokang Indicators)
  • City competition (e.g. rankings published by consultancies and magazines based on liveability indices)
  • City planning (very few internationally recognized)
  • Satisfaction (e.g. Gallup World Path, nef’s National Accounts on Well-being)
  • Health (e.g. a set of indicators under the WHO’s Global Health Observatory, The Australian Unity Well-being Index)
  • Sustainability (e.g. Happy Planet Index, Genuine Progress Indicator)

It is concluded that it would not be effective to create a new index that attempts to merge all of these six approaches. Instead, suggests the author, it could work around what Asian urban residents themselves identify as their priorities and needs, as well as incorporating both objective and subjective criteria for well-being.

As part of the index-development process, the researchers at Civic Exchange have collected and studied information on over 160 indices from around the world that measures various elements that may be said to broadly relate to the concept of “wellbeing.” The have summarized this information in a document with clear summary tables containing all the indices they have studied from September 2011 to April 2012.

Links: Measuring Well-Being in Cities – A Literature Review, Summary of indices

Centre for Bhutan Studies publishes a short guide to the GNH Index Reply

The Centre for Bhutan Studies has released a short publication, “GNH and GNH Index: A Short Guide to the Gross National Happiness Index” providing background on the concept of Gross National Hapiness (GNH) and its measurement. The authors – Karma Ura, Sabina Alkire, Tshoki Zangmo – present information on the origins of GNH and focus especially on the 2010 GNH Survey, the first official national survey on GNH in Bhutan. They then go on with  explaining the compounds of the GNH Index with its nine domains and 33 clustered indicators that are based on 124 variables. The domains include:

  • psychological well-being
  • time use
  • community vitality
  • cultural diversity
  • ecological resilience
  • living standard
  • health
  • education
  • good governance

As can be seen from the selection of the domains, the GNH Index is truly multidimensional and the authors really highlight this feature. They point out that “in the GNH Index, unlike certain concepts of happiness, in current western literature, happiness is itself multidimensional – not measured only by subjective well-being, and not focused narrowly on happiness that begins and ends with oneself and is concerned for and with oneself.” In Bhutan say the authors ” the pursuit of happiness is collective though it can be experienced deeply personally.”

It is also stressed, on the other hand,  that despite being a complex measure useful in the government policy settings,  the GNH Index can also be decomposed into the ‘building blocks’ and used by other organizations and citizens.

The authors of the guide also inform that the outcomes of the GHN Survey can be used to identify where unhappiness is arising from and for whom. These findings can then be used to determine groups of “not-yet-happy people” and improve their conditions. In the GNH Index, people are considered “happy” when they have sufficiency in 66% of the (weighted) indicators or more, those below 66% are considered “not-yet-happy.”

The results of the 2010 GNH Survey in Bhutan have shown that the insufficiencies of not-yet-happy people differ in different parts of the country. In rural areas, not-yet-happy people tend to attain less education, living standards and balanced use of time, while in urban areas, not-yet-happy people are typically insufficient in non-material domains such as community vitality and culture, and psychological well-being.

Links: A Short Guide to GNH and GNH IndexCentre for Bhutan StudiesGross National Happiness, Educating for GNH

Wikiprogress drafts an overview of National Initiatives on Measuring Well-being Reply

Wikiprogress, a global virtual platform for sharing information in order to evaluate social, environmental and economic progress, provides a draft document listing initiatives on measuring well-being on the national level. Based largely on the content of the Wikiprogress.org website, there are initiatives and examples from some 17 countries, including Australia , Belgium, Canada, China, Finland , France, Germany, Hungary, Italy, Japan, Luxembourg, the Netherlands , New Zealand, Slovenia, Spain, UK  and the US.

The initiatives range from government-led projects to organization- and community-based initiatives, such as the Australian National Development Index, Canadian Index of Well-being, Findicator (Finland), World Database of Happiness (the Netherlands), the National Well-being Project (UK), or The State of the USA, to name just a few.

Link: http://www.wikiprogress.org/images//National_Initiatives_on_Measuring_Well-being.pdf

Global Transition 2012: International initiative on ‘New Economy’ Reply

The Global Transition 2012 is an international network of organisations and leading thinkers striving for “an alternative global green economy that maximises well-being, operates within environmental limits  and is capable of coping and adapting to global environmental change.” The initiative has been introduced and supported by the Stakeholder Forum for a Sustainable Future, the new economics foundation (nef) and the New Economics Institute, with partnership with other organisations such as the Green Economy Coalition and BioRegional. The current focus of the initiative is to “grow the network of organisations from now, in the lead up to Rio+20 [United Nations Conference on Sustainable Development, 2012] and beyond.”

On their website, The Global Transition 2012 initiative publishes short blog articles from leading thinkers, information on events related to the Rio+20 conference, as well as series of ‘Challenge Papers’ on key topic areas covering: The Green Economy, Beyond GDP, Global Inequality, One Planet Living, The Blue Economy, Energy Resources and Services, Food Security, Managing Natural Capital, Global Finance and Banking, Green Jobs and Skills, and Trade.

‘The Gren Economy’ paper by nef urges that “we must devise and manage a rapid economic transition.” The authors propose that new economic models maximising human well-being, but at the same time working within the Earth’s environmental boundaries, need to be implemented. The paper “puts forward 6 challenges to lay the foundations for [the needed] systemic change: 1. Develop a national transition plan that puts countries on paths to operate within planetary boundaries, and on timescales sufficiently quick to preserve key, ecological life support functions; 2. Don’t start from a growth perspective; 3. Agree to develop and implement new measures of economic success; 4. Commit to reduce income and wealth inequalities between and within nations; 5. Put fiscal policy and public expenditure centre stage in managing economic transition; and 6. Recapture the financial sector for the public good.”

‘The Beyond GDP: Measuring Our Progress’ paper co-authored by nef, Global Footprint Network and National Secretary for Planning and Development, Ecuador, then focusses on ways of measuring environmental sustainability and well-being. The authors “call for governments around the world to: 1. Amend their national accounting systems to align what they measure with what really matters; and 2. Use those measures as a guide for policy and political action.”

In connection with the Global Transition 2012, the initiative has also developed ‘The Global Transition to a New Economy’ project. The key of this project is an interactive map of already existing projects and initiatives that can be put under the umbrella of ‘New Economy’.

Links: http://globaltransition2012.org/, http://www.gtne.org/

UNEP’s Green Economy Unit provides feedback on Life Beyond Growth 2012 Reply

We have kindly asked those organisations and institutions whose work has been featured in Life Beyond Growth 2012 for their feedback on the report. We especially  appreciated the response from Joy Kim, Programme Officer at  UNEP’s Green Economy Unit, who gave us a permission to publish her view on the report.

Joy wrote to us:

“Thank you for your invitation to provide feedback on your new publication ‘Life Beyond Growth’.

It is an impressive compilation of new economics and I found it quite interesting to read about the evolution of the growth paradigm. Let me provide a few comments particularly on indicators — the relationship between green economy and sustainable development and the notion of de-growth.

First, it seems that the spectrum of indicators seems to be narrowly defined (basically three clusters: GDP, green GDP and GNH). Yet, such a clustering of indicators does not do justice in my view as the picture of indicators across the spectrum of new economics is very complex and some further work is required in order to identify such gaps in this area.

As you mentioned in chapter 5, there has been vast amount of work done in the filed of sustainable development indicators including ‘Genuine Savings’ etc. The problem is that they appear to play a secondary, or back seat role in policy-making relative to key economic indicators such as GDP (by the way, these indicators are not to replace GDP. GDP is one economic indicator, yet it has been a predominant one so far to measure our economic progress. A key challenge is to understand better the constraints to taking a more integrated approach).

At the same time, there is a paucity of data and indicators that capture the economic transformation in terms of investment, outputs and jobs in environmental sectors (renewable energy technologies, public transport, waste management etc.). The same can be said for similar data from social sectors (by levels of education, occupational training, by social groups such as women and youth, public health care etc.).

In this regard, UNEP has been largely striving to assisting countries to implement a key set of indicators by identifying knowledge gaps and providing guidelines for the implementation of such indicators. The system for environmental and economic accounting (SEEA) is a case in point.

Second, in page 27, you have listed sustainable development in the spectrum of alternative economic frameworks together with green economy and green growth. Yet, sustainable development is a widely accepted overarching concept across the spectrum of general growth paradigm. Hence it is misleading to list it as an alternative economic framework next to green economy, as green economy is a means to achieve sustainable development.

Finally, in the conclusion, it is stated that ‘green economy’ allows selective de-growth. In my view, it would be more accurate to say that green economy is grounded on the notion of decoupling (both relative and absolute although the grounding on the latter is weaker than the former). Green economy attempts to redress the existing growth model by providing an alternative one, but it should be born in mind that economic growth is an important part of green economy.

I hope these are useful and thank you again for this opportunity to provide our views on this publication.”