Beyond GDP: The Need for New Measures of Progress

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by Robert Costanza, Maureen Hart, Stephen Posner, and John Talberth

Type: Report [title]
Published January, 2009
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This paper is a call for better indicators of human well-being in nations around the world. We critique the inappropriate use of Gross Domestic Product (GDP) as a measure of national well-being, something for which it was never designed. We also question the idea that economic growth is always synonymous with improved well-being. Useful measures of progress and well-being must be measures of the degree to which society’s goals (i.e., to sustainably provide basic human needs for food, shelter, freedom, participation, etc.) are met, rather than measures of the mere volume of marketed economic activity, which is only one means to that end. Various alternatives and complements to GDP are discussed in terms of their motives, objectives, and limitations. Some of these are revised measures of economic activity while others measure changes in community capital—natural, social, human, and built—in an attempt to measure the extent to which development is using up the principle of community capital rather than living off its interest. We conclude that much useful work has been done; many of the alternative indicators have been used successfully in various levels of community planning. But the continued misuse of GDP as a measure of well-being necessitates an immediate, aggressive, and ongoing campaign to change the indicators that decision makers are using to guide policies and evaluate progress. We need indicators that promote truly sustainable development—development that improves the quality of human life while living within the carrying capacity of the supporting ecosystems. We end with a call for consensus on appropriate new measures of progress toward this new social goal.

Robert Costanza is the Gordon and Lulie Gund Professor of Ecological Economics and Director of the Gund Institute for Ecological Economics at the University of Vermont. The Gund Institute is a transdisciplinary research and teaching unit that integrates the study of humans and the rest of nature to address research, policy, and management issues at multiple scales, from small watersheds to the global system. He is co-founder and past-president of the International Society for Eco – logical Economics, and was founding chief editor of the society’s journal, Ecological Economics. His awards include a Kellogg National Fellowship, the Society for Conservation Biology Distinguished Achievement Award, and a Pew Scholarship in Conservation and the Environment.

Maureen Hart is the Acting Executive Director of the Community Indicators Consortium, a learning network of community indicator organizations and practitioners. She is an internationally known expert on sustainability indicators and the author of the Guide to Sustainable Community Indicators, used worldwide by organizations and communities working to enhance long-term economic, social, and environmental quality of life. For 15 years, as President of Sustainable Measures, Hart has provided technical assistance to community indicator projects, evaluated indicators and indicator sets, and researched, published, and presented on various aspects of measuring sustainability at the local, regional, and national scales.

Stephen Posner is a research assistant at the Gund Institute for Ecological Economics and a graduate student in natural resources and ecological economics at the University of Vermont. His current research focuses on indicators and the impacts of growing economies on natural resources and human well-being. He previously taught ecology and conservation land use planning to local decision makers in the ten-county Hudson Valley region of New York, and has a B.S. in astronomy and physics from Haverford College.

John Talberth is Senior Economist for the Center for Sustainable Economy and directs the Sustainability Indicators Program at Redefining Progress. Talberth earned his Ph.D. in economics from the University of New Mexico in 2004 and his M.A. in Urban and Regional Planning from the University of Oregon in 1986. He co-founded the Center for Sustainable Economy in 2001, and provides expert support in the fields of conservation planning, environmental economics, and environmental law to government agencies, businesses, and nonprofit organizations. In 2005, Talberth became Director of the Sustainability Indicators Program at Redefining Progress and coordinates scientific advances and policy applications of the Ecological Footprint, Genuine Progress Indicator, and other sustainability metrics.