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A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006

Degrowth 18/04/2008. A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006. Brent Bleys. The ISEW Story. ISEW measure that tries to capture the overall impact of economic activity on human well-being developed by Herman Daly and John Cobb

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A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006

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  1. Degrowth 18/04/2008 A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006 Brent Bleys

  2. The ISEW Story • ISEW • measure that tries to capture the overall impact of economic activity on human well-being • developed by Herman Daly and John Cobb • more recently: GPI and MDP • implementations in a growing number of countries • result: optimal physical scale of the economy has been surpassed

  3. Optimal Physical Scale (Lawn) Threshold Hypothesis (Max-Neef): “for every society there seems to be a period in which economic growth seems to bring about an improvement in the quality-of-life, but only up to a point - the threshold point - beyond which, if there is more economic growth, quality-of-life may begin to deteriorate.”

  4. The ISEW for the UK (Jackson et al.)

  5. The ISEW for Belgium

  6. A Simplified ISEWItem Selection • rationale for a SISEW: • large amount of data needed • inconsistent set of items and valuation methods • e.g. noise pollution • proposal: omit from the ISEW those items that have low quantitative significances when compared to most other items (based on original case study) -> Simplified ISEW

  7. A Simplified ISEWMethodology

  8. A Simplified ISEWBelgium

  9. A Simplified ISEWConclusions • easier compilation, without affecting the outcome of the exercise (except for changes in absolute terms) • highlights the items that most urgently need an internationally agreed upon methodology • manual -> possibility of calculating SISEW/capita for a large group of countries using a standardized set of valuation methods • important to keep in mind that the eventual omission of any items is based on historical observations + differences between countries

  10. SISEW for FranceGeneral • Compilation of a Simplified ISEW for France, 1980-2006 • data obtained from • INSEE, IMF, WIDER’s WIID • WRI, UNEP’s Geo Data Portal • 11 items, methodology taken over from Jackson et al.’s ISEW study on the UK (1997)

  11. SISEW for France

  12. SISEW FrancePositive Items

  13. SISEW FranceNegative Items

  14. Alternative Measures of Well-Being • increasing interest in alternative measures of well-being: • OECD’s World Forum on Statistics, Knowledge and Policy • EU’s ‘Beyond GDP’ conference • Globescan survey reveals a worldwide support for alternative measures • large number of possible alternatives, the ISEW and GPI being one of them

  15. ISEW and Policy • ISEW has some potential for policy-making: • more comprehensive approach than traditional economic accounting • captures the trade-off between these dimensions • possible first step towards a different set of economic accounts • However, a country should never be guided by one single index (neither GDP, nor ISEW) -> different types of indicators are needed

  16. ISEW and Policy (2) • the ISEW should be seen as a measure of economic welfare: the value added by the economic system to natural capital • sustainability is not captured at all by the ISEW, supplemental accounts are needed to account for this • need for the development of a standardized and widely supported methodology (crucial)

  17. ISEW and Policy (3) • great potential as a communication tool (empirical translation of the criticism on GDP) • often put forward in such a way • = contribution to the degrowth debate Thank you! Questions?

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