In order to make the economy work for us and the planet, we need new Wellbeing Economic measures that take into account environmental and social issues, supplement GDP and become a central measure of where we are as a nation.
In sustainability circles much is made of the “three pillars of sustainability” and the fad of the &quou;triple bottom line” of environment, society, and economy. This is to confuse ends with means, objectives with tools. Environmental Wellbeing and human Wellbeing are two desirable endpoints. Economic Wellbeing is a means to achieve those ends.
Environmental Wellbeing and human Wellbeing are two desirable endpoints. Economic Wellbeing is a means to achieve those ends.
Some of the things which make life most valuable cannot be expressed in monetary terms. What price clean drinking water, fresh air, friendship, health, tranquillity or a beautiful view? Just as we do not seek to calculate the value of different peoples’ lives in determining where to invest in health, so we cannot easily put a financial value on the enjoyment of 29m annual visitors to the Peak District National Park. Some things, clearly, do not have a price. Nevertheless, many of the environmental goods and services of which we take advantage are currently not taken into consideration in conventional economic accounting. This leads to the degradation of the environment and often in a diminution of the welfare of our society as well – the two are intrinsically linked.
Work is under way in government departments and think tanks around the world to develop new indicators of both the “needs” Wellbeing part and the “means” health of the planet part of this two-fold nexus. These new indicators will change the way we look at life and our planet and are bound to be revolutionary in the way they impact on our economy.
Such new measures will need to include in their accounting the ability to subtract as well as add. To subtract from perceived growth the defensive costs of dealing with pollution, to maintain security in the face of rising crime and social unrest and the costs of national defence. They will also need to add the true costs and benefits of unpaid work. They also need to take into account the distribution of income, not just its growth. After all, £100 extra for a poor man is worth far more than £100 for a millionaire and yet currently national accounts treat £100 income identically, no matter who receives it.
These new measures will need to take into account environmental Wellbeing. By doing so they will show us that we are most certainly in a stage of uneconomic growth – both for the levels of the planet’s and our own Wellbeing. We will see clearly that we have overshot the point where decreasing marginal benefits of economic growth were equal to the increasing marginal returns.
We will need to ask how healthy are our fish stocks, our rivers and lakes? How much pollution have we put into the delicately balanced atmosphere? How many species are we losing? How much soil and forest is lost and land turned to desert through our activities? Does it take one tonne of carbon emissions or a tenth of that to get me to and from work in a year? Are we living off income, or natural capital? These are all crucial questions when we consider the environmental impacts of our actions.
If the Happy Planet Index were used instead of GDP to determine membership of the G8, then none of the current G8 would be members.
They will also need to take into account social Wellbeing. How well educated are we, how long do we live, what are our levels of crime, depression and substance abuse? How much time do parents get to spend with their children? Do people feel over-worked? How cohesive are our communities? Do we fear crime or do we feel secure? Do we have fair access to resources and opportunities? Do we have rising or falling feelings of life satisfaction, enjoyment and achievement? Are we leaving the planet to future generations in as good or better a condition than the one we inherited? All of these things need to be taken into account when we discuss our health as a nation.
The map of the Happy Planet Index below [disclosure: Jules Peck was involved in its initiation] compares how many planetary resources it takes countries to deliver units of long happy lives and shows the UK at paltry 108th, just ahead of Laos but one behind Libya. Right now Germany uses half the amount of resources to deliver happy long lives as the US. And countries ranked by the UN as being medium-development are far more efficient than low and high-development countries. What this tells us is that, of course it’s miserable for most living in a very poor country, but also that beyond a certain level, vastly increasing consumption fails to lead to greater Wellbeing. Countries with more prevalent intrinsic values, more community involvement and which value adventure, creativity and loyalty over material wealth and possessions also rank highly in the life satisfaction quotient of HPI.
If HPI instead of GDP were used to determine membership of the G8, then none of the current G8 would be members. As we start to question issues in the Wellbeing debate, society may tune into a more playful way of life, working less, earning less, spending more time with family and friends and less money on pointless positional goods which damage our planet.
New taxation, regulation and Consumer shifts may bring about changes to our current form of capital based economy. Our economy may shift away from one defining its success by economic growth to one which is defined by economic development that brings most good long lives to the majority with least resource input and footprint on our planet. This is exciting new terrain and as revolutionary as the enlightenment and industrial revolution.