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Module 6: Indicators

Module 6: Indicators. GDP, NNP, Green NNP and ISEW Human Development Index Ecological Footprint, Material Flow Analysis,. GDP…and some critiques. When an earthquake destroys a city, GDP will increase Quantity vs. quality

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Module 6: Indicators

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  1. Module 6: Indicators GDP, NNP, Green NNP and ISEW Human Development Index Ecological Footprint, Material Flow Analysis,

  2. GDP…and some critiques When an earthquake destroys a city, GDP will increase Quantity vs. quality Simple way of measurement: distribution is not considered type of “production” is not considered (education or army) non paid leasure time is not accounted for Market/non market ratio (% own production, % domestic work) not accounted First improvement: Real GDP (Purchasing Power Parity)

  3. From GDP to NNP (net national product)… Accounts for capital depreciation (but only man-made capital) NNP = GDP – Km depreciation While GDP is a measure of flows only, NNP accounts for stocks and flows. But again, natural capital is not considered (and not even social-human capital)…. …as if national accountants thought nature to be infinite (which was true when the physical (and monetary) economy was small. But not now….

  4. …to Green NNP ….so the green NNP has been proposed. Green NNP = GDP – Km depreciation – Kn depreciation + non mkt amenities (WTP) Other types of accounting, that measure not in “crematistic” terms, but in physical terms, are not considered so important and are called “satellite accounting”…. ….but “might these “satellites” be bigger than the actual planet?” (Naredo)

  5. ISEW Daly and Cobb, 1990 Index of Sustainable Economic Welfare. It is still a monetary based measure Starting from GDP, a long list of corrections, to get the ISEW Figures show a growing split between GDP and ISEW Necessary but not sufficient.

  6. Human Development Index Is a measure that comprises more indicators, especially from the human and social scale. But again, these indicators are western – based: for exampletraditional knowledge is not accountededucation is only based on years of schoolwe could argue that loss of cultural diversity could be GOOD

  7. Ecological Footprint, How much area should an economy need if all materials and energy used were coming from only renewable resources?See report from WWF:WWF report: i.e. The living planet 2002http://www.panda.org/news_facts/publications/general/livingplanet/index.cfm Is not an absolute measure: it depends from prices and elasticity It comprises energy flows

  8. Material Flow Analysis, Paper from EKC vienna Wuppertal report pag.65 read from pag. 63 to pag. 70Wuppertal Institute Annual reporthttp://www.wupperinst.org/Sites/publications.html Wuppertal paper: green accounting and material flow analysis. Alternatives or complements?http://www.wupperinst.org/Publikationen/WP/WP106.pdf

  9. As a summary: “measures” of sustainable development… Goods(consumption) Ends,measures of utility Economic system Resources Means,measures of opportunity SD = non decreasing capital(with different forms of measure) SD = non decreasing utility(with different forms of measure)

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