GDP indicators must integrate economy and environment: Stakeholders

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Growth indicators should take into account social progress and the use of natural resources, said a number of NGO and institutional leaders at a conference in Louvain-la-Neuve, at which the European Investment Bank revealed it was still unable to fully measure its ecological footprint.

Meeting this week on the empty Walloon campus for the first year of the international forum 'One People, One Planet', stakeholders and activists agreed that policies should integrate financial, economic and environmental considerations.

To measure growth participants suggested that countries should emphasise different aggregates, which would go beyond GDP to facilitate comparability and ecological benchmarking.

Laws should cut across institutions and beyond borders to avoid contradictions and tardiness, and new methods to measure growth and engage citizens should be developed, the conference heard. 

Politicians are often under short-term budgetary and electoral constraints, which does not leave much room for dealing with the environment, stakeholders said.

Participatory democracy was seen by participants as a way to educate people about their behaviour and encourage them to speak out, from the bottom up. On the other side of the legitimacy range, international experts could lend credibility to long-term visions.

The European Citizens' Initiative, the EU's upcoming attempt at participative processes, was mentioned by several speakers as a means of leveraging best-practice exercises. 

Christophe Leclercq 

(euractiv.com was a media partner of the event.)

Olivier de Schutter, the United Nations' special rapporteur on the right to food, said one billion people in the world were hungry, while turf battles between UN agencies were pulling governments in different directions.

To pursue the common good he advised harnessing both people power and long-term thinking: 'citizens' juries', 'citizens' impact assessments' and a global 'Academy of the Future', made up of experts.

Patrice Van Haute, executive director of the OECD (Organisation for Economic Co-operation and Development), was asked whether free trade and deregulation were compatible with addressing environmental concerns.

He said markets helped companies to adapt within the framework of state regulation. A tax on a given chemical, for example, encourages companies to invest in R&D in a bid to compete more effectively and reduce its consumption.

Philippe Maystadt, president of the European Investment Bank (EIB), criticised finance's grip of the real economy, and the economy's disregard of the environment.

In the financial arena, all transactions should be subject to regulation at the appropriate level - national, European or global, Maystadt said: he would make a distinction between commercial banking and investment banking.

Regarding the EIB itself, its direct footprint is now measured, but the environmental impact of the projects it funds "still encounters some methodological problems," Maystadt admitted, adding: "It must be possible. This [total footprint measurement] is more simple than complex products under IFRS (International Financial Reporting Standards)."

Tony Long, director of the Brussels office of the WWF (Worldwide Fund for Nature), told EURACTIV: "One of my first Brussels projects in 1989 was to analyse the EIB's impact. This led to recommendations which we published in 1992 about what is now called its footprint. I like what Mr Maystadt said. But, after 20 years, the EIB is really slow off the mark!"

The WWF chief lamented the lack of debate about the priorities of EU spending, which he said should focus on the green economy agenda. To turn this around, he suggested engaging progressive industries, NGOs in the social and development sectors, and even "environmentally dispossessed" people in the third world.

André Ruwet, editor-in-chief of environmental media firm 'Imagine', called for better indicators to alert public opinion, drawing parallels with "the Paris-Rio plane, that crashed because it had been fooled by wrong measurements".

Ian Johnson, secretary-general of the Club of Rome, claimed that its famous 1970s report on 'Limits to growth' was "finally coming of age". For him, "greening the economy sounds good, but is not a substitute for radical thinking: changing society and growth entirely."

He added that "the Copenhagen [climate summit] disaster had reduced public trust" and advocated stronger communication around climate change issues.

Cédric du Monceau, alderman of Louvain-La-Neuve, concluded the event by offering to hand it over to participants, "to make it theirs": he also highlighted the potential of new European Citizens' Initiatives in 2012.

Efforts to measure growth 'beyond GDP' have been under way for several years.

The Organisation for Economic Cooperation and Development (OECD) has tried to develop new approaches to measuring societal progress and human development. EURACTIV's LinksDossier provides an overview.

Meanwhile after the 1929 crash, US regulators imposed a division between commercial banking (essentially collecting savings and lending) and investment banking (dealing in company shares). It became known as the Glass Steagall Act.

Paul Volcker, a former chairman of the US Federal Reserve who recently served as an adviser to the Obama administration, is one advocate of re-instating those principles, in an attempt to reduce the risk of bankruptcy or conflict of interest.

  • 2012: Second international forum 'One People, One Planet' gathering for business, public and NGO leaders. 
  • 3 Dec. 2011: Climate Coalition to hold civic demonstration at UN climate summit in Durban.

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