EU mulls indicators to measure wellbeing ‘beyond GDP’

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The European Commission has published a roadmap for developing new environmental and social indicators to measure the real prosperity and wellbeing of nations beyond traditional GDP. The reflections could affect the strategic goals of the post-2010 Lisbon Strategy for growth and jobs.

GDP growth is the main indicator for measuring the effectiveness of recovery plans launched last year to restore economic growth.

However, “there is a clear case for complementing GDP with statistics covering the other economic, social and environmental issues on which people’s well-being critically depends,” according to a Commission communication entitled ‘GDP and beyond – Measuring progress in a changing world’, adopted on 20 August.

The proposal follows a 2007 Commission conference, which revealed strong support from policymakers, economic, social and environmental experts and civil society for developing such indicators to complement GDP (EURACTIV 20/11/07).

The document identifies action to be taken to develop such more ‘inclusive’ indicators. It will officially be presented on 8 September.

According to the EU executive, the reflection could also “contribute to setting new strategic goals for the post-2010 Lisbon Strategy”.

“The special importance of this system is that it would include stock-taking of natural resources and human and social capital, rather than just the use of these resources. The system would also focus on the role of eco-systems in providing welfare,” declared the Commission upon announcing the initiative in 2007. 

Among the five primary initiatives planned by the EU executive are developing a comprehensive environmental index and improving quality-of-life indicators to complement GDP.

Environmental pressure index ready by 2010

Ecological and carbon footprints are “close candidates” for developing indicators for a comprehensive environmental index to complement GDP, according to the Commission. But it stresses that “both are limited in scope,” as the carbon footprint only takes into account greenhouse gas emissions and the ecological footprint excludes any impact on water, for example. 

A pilot version of an index to measure pollution and other environmental harm within EU territory is due to be published in 2010. It will help assess the results of environmental protection efforts in the following fields: 

  • Climate change and energy use; 
  • nature and biodiversity; 
  • air pollution and health impacts;
  • water use and pollution, and;
  • waste generation and use of resources. 

Other initiatives proposed include developing a European Sustainable Development Scoreboard, a pilot version of which should be ready this year, to allow better monitoring of progress made regarding the EU’s sustainable development strategy. 

Another related measure is developing threshold values for environmental sustainability, which should allow policymakers to identify ‘danger zones’ or alert levels before nature’s physical limits are reached. The values will be identified for key pollutants and all renewable resources. 

French report to be published in September

At the initiative of French President Nicolas Sarkozy, France set up a high-level Commission on the Measurement of Economic Performance and Social Progress in 2008. The commission is chaired by Nobel prize winner Joseph Stiglitz, an American economist, and aims to identify the limits of GDP as an indicator of economic performance and social progress. It will then propose alternative indicators to measure economic, environmental and social sustainability. 

provisional summary of the commission’s work, published in June, mulls classical GDP issues, quality of life and sustainable development and the environment. The final report will be published on 14 September.

GDP, or Gross Domestic Product, is widely used by economists to measure individual countries' economic performance. However, its value as an indicator of standard of living is widely seen as limited, as it does not show how a country's wealth is distributed. 

The indicator was created in the wake of the Great Depression in the 1930s, and experts agree that GDP alone cannot reflect the economic performance of modern society.

An alternative measurement is the United Nations Human Development Index, which measures life expectancy, literacy, education and standard of living worldwide. GDP contributes to this calculation. Another indicator is the World Wildlife Fund for Nature's (WWF) Ecological Footprint, which measures human demands on nature.

A global statistics forum bringing together major international organisations, ranging from the UN and the EU to the Islamic Conference, decided in June 2007 to launch a global project to measure societal progress beyond conventional economic measures in individual countries (see EURACTIV 17/07/07). Participants agreed that national statistical offices, academics and public and private bodies would work with civil society to develop new approaches which go beyond conventional economic indicators like GDP. 

  • 8 Sept. 2009: Commission to officially present communication on measuring progress beyond GDP.
  • 2012: Commission to review proposed initiatives.  

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