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Briefing Note: Can regular government publication of indicators play a role in achieving sustainability? v2.0b

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A briefing note to the Premier of Ontario, reviewing the benefits of moving to publish an alternative to GDP on a regular basis - for example Genuine Progress Indicator (GPI) and Gross National …

A briefing note to the Premier of Ontario, reviewing the benefits of moving to publish an alternative to GDP on a regular basis - for example Genuine Progress Indicator (GPI) and Gross National Happiness (GNH).

For my York University / Schulich School of Business Graduate Degree in Environmental Studies / Graduate Diploma in Business and the Environment.

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  • 1. Briefing Note by Antony Upward, Student #2111354231. PremiseBriefing note to the Premier of Ontario prepared by a cross-ministry working group of policyadvisors working under the direction of the Ontario Ministers of: Finance, Environment, Health,Education, Natural Resources, Aboriginal Affairs, Energy, Tourism and Culture, Children andYouth Services, Community and Social Services, Agriculture, Economic Development andTrade, and Transportation.2. Issue • Can regular government publication of indicators play a role in achieving sustainability?3. ResponseGovernment publication of sustainability measures covering all three dimensions of sustainabledevelopment (environment, economic, and social) would initiate multiple positive feedbackloops in society with multiple interlocking benefits: • Initiate and sustain innovation in education, business and not for profit sectors. Each sector would feel compelled and energized to understand their impacts on the measures, plan and execute appropriate responses. • Initiate and sustain a learning conversation for all members of society on the objectives, options, benefits and costs of sustainable development. In turn this would give all ministries the social mandate to take part in these conversations, developing and executing new policies. • Enable government to show vision and leadership for a better future for all Ontarians within a well accepted United Nations mandate*.If the frequency and timing of publication of sustainability measures were aligned with existingmeasures, such as GDP, this would enhance these benefits by allowing contemporaneouscomparison of existing and new indicators.* Since the 1987 United Nations approval of the Brundtland Commission report (WCED, 1987), sustainabledevelopment has become an accepted and urgent policy goal for governments globally.A.Upward #211135423 Briefing Note FINALENVS5164 1 December 2, 2010
  • 2. Without regular publication of authoritative sustainability measures all groups within society areleft to define, plan and measure sustainable development on their own. This reduces confidence,increases risk for all parties, and slows down the realization of this key policy objective.In summary: “What gets measured gets done” (Anonymous).4. ConsiderationsThere are two dimensions to this recommendation: 1. Why introduce government published indicators of sustainable development now? The indicators are ready for use by Ontario: the definition of indicators and the processes to choose the most applicable ones are reaching a level of maturity where they are ready to be used at scale to define, plan and achieve sustainable development. 2. Which indicators should be used? There are choices to be made: at least three schemes capture both the complexity of the three dimensions of sustainability and provide easy to follow “headline” index: Sustainable Society Index (SSI)1, Happy Planet Index (HPI)2, and the Genuine Progress Indicator (GPI)3.There are three alternatives approaches to responding to this issue (See Table 1 below):Examples of countries exploring and / or acting on this recommendation include: The UK’srecent announcement that it will be working to introduce a measure of happiness to complementGDP (BBC, 2010), and the recommendations from the broader measurement work of theSarkozy “Commission on the measurement of economic performance and social progress” inFrance (Stiglitz, Sen, & Fitoussi, 2009).A.Upward #211135423 Briefing Note FINALENVS5164 2 December 2, 2010
  • 3. Table 1 – Alternative Responses to The Issue of Regular Government Publication ofSustainability Indicators Alternative Benefit RiskA. Choose a set of indicators, Maximum acceleration to Criticisms of selectedpublish on same schedule and citizen learning about and indicators create sufficientwith positioning comparable achievement of sustainable noise which prevents benefits.to other major indexes (GDP, development.Inflation, Unemployment);Simultaneously take part in Over time indicators willthe community evolving the improve.index.B. Announce time line to Provides opportunity for Without publication ofchoose and publish sustainable consensus to form around measurements, selection ofdevelopment indicators and selected measures. measures is hard to understandjoin community evolving the and support. Criticisms ofindex. Provides opportunity to tune sustainable development indicators to Ontario specifics. without data from the indicators creates sufficient noise which presents progress to sustainable developmentC. Continue with current Low reputational risk from Realities of climate changestatus quo. many stakeholders and related problems cause citizens and stakeholders to view government as out of touch.A.Upward #211135423 Briefing Note FINALENVS5164 3 December 2, 2010
  • 4. 5. BackgroundConcerns with Existing Indicators as a Measure of SustainabilityGDP has since its inception been known to be an inappropriate measure for overall societal wellbeing. As Simon Kuznets, one GDP’s originators, stated in 1934: “...the welfare of a nation can,therefore, scarcely be inferred from a measure of national income...” (Kuznets, 1934, p.7).However, until the mid-1970’s in most Western countries there was a positive relationshipbetween GDP and individual and social well-being, and this supported the general belief thatGDP was linked to prosperity sand hence well-being.However, since that time the positive relationship between GDP and well-being is no longer truein Western countries, and further the gap is widening (Binswanger, 2006). This reality has ledleading social scientists to recommend a formal switch away from GDP as the generally acceptedmeasure of societal progress and development. In its place they recommend a move to indicatorswhich measure well-being or happiness more directly (R. Layard, 2003; R. Layard, 2006).Indeed, Lintott suggests that “there is no reliable link between consumption and welfare”, andhence “the whole basis for using GNP as a starting point in constructing a better measure ofprogress is lacking” (1998, p.264).Very specifically, the 2009 Sarkozy commission, which consisted of 22 globally recognizedeconomists and other social and natural scientists, recommended “that time is ripe for ourmeasurement system to shift emphasis from measuring economic production to measuringpeople’s well-being. And measures of well-being should be put in a context of sustainability.”(Original emphasis) (Stiglitz et al., 2009, p.12).Existing Sustainability IndicatorsThe development of indicators of sustainability has been well underway since the early 1970s(Dimou & Upward, 2010). Based on the work of the Brundtland commission (WCED, 1987) itis generally accepted that there are three dimensions of sustainability: economy/profit,equity/people/society and environment/planet, and that for a society to be sustainable thesedimensions must be considered over multiple generations.At this time there are more than 20 alternatives indicators of sustainability, with varying levels ofinternational, national and Canadian involvement. The SSI1, HPI2 and GPI3 (introduced above)are existing indicators which all capture the three dimensions of sustainability over time.A.Upward #211135423 Briefing Note FINALENVS5164 4 December 2, 2010
  • 5. Benefits of Government Published Sustainability IndicatorsThe realization of the opportunities and benefits of sustainable development are being hamperedby lack of clear government direction (Aghion, Hemous, & Veugelers, 2009) which in turn ishampered by lack of understanding by the citizenry.The SSI,. HPI and GPI indicators can provide the general public, media and technicalstakeholders (business, government, not for profit) with both summary and detailed informationwhich is aligned. This allows goals to be agreed, communicated to and progress measured by allparties.The beneficial effects of having regularly published sustainable development indicators,including making progress towards aspects of sustainable development, has been explored in thecontext of OECD countries by Lehtonen (2008) who observed that publication of indicatorslegitimizes “calls for stronger environmental policies, thereby generating government, social andpolicy learning”, ultimately resulting in the “mainstreaming [of] sustainable development”.Recognizing the value to society of sustainability indicators, macro and micro-economicindicators are now being actively designed and implemented around the world. For example, theemergence of “impact investors” who are concerned with triple bottom line results (not onlyeconomic profit) has led the Rockefeller Foundation and others to develop and implementsustainability ratings and rankings for organizations (GIIN, 2009). At the national level, mostrecently the United Kindgom, has announced it will be implementing a “Happiness Index”(BBC, 2010; Williams, 2010). Other countries, notably New Zealand, have been exploringheadline indicators of sustainability since 2002, recognizing “we need to know how we areperforming economically, sociality and environmentally. Without this information we cannotrationally plan for the future and monitor progress towards any goals we may set. This applies toall levels and dimensions of decision making iin the regional community and ranges across thepublic and private sectors (Patterson, 2006, p.423).Preparing a Plan for Defining and Publishing Ontario’s Sustainability DevelopmentIndicatorsWhile at the Canadian Federal Government level there is currently scepticism, discussions of theapplicability and implementation of such a measure in Canada were considered at a recentconference in Ottawa (Curry, 2010). This conference builds on the significant Canadian past andcurrent involvement in the development of these indicators (Dimou & Upward, 2010).The selection and implementation of the indicators is still some what controversial complex andhence the mere selection of indicators poses some risk of criticism (El Serafy, 2006).A.Upward #211135423 Briefing Note FINALENVS5164 5 December 2, 2010
  • 6. To mitigate this risk, while preparing a plan to introduce sustainability indicators for Ontario,recommendations made in works on indicator design (Stiglitz et al., 2009), selection (Jollands,2006; Peet, 2006)and implementation (Lawn, 2006) should be consulted.Further, to understand, and leverage the positive feedback loops and connections betweengovernment policy development and the publication of indicators policy units within ministriesmay wish to consult the work by Herzi (2006) which discusses the “mobilisation of indicatorsthrough their active use within the context of governance”.Next StepsBased on the evidence gathered and presented, there are significant benefits to Ontarians of theGovernment of Ontario publishing measures of sustainability on the same time frame andfrequency as other major indicators. Not only will this de-risk the achievement of existing statedpublic policy objectives, such as green-energy, green house gas emission reduction throughimproved communication to the general public, but it will also reduce risk for all societymembers to act in support of these policies. The result over time will be to improve theeconomic, social and environmental well-being of Ontarians.It is recommended that the Office of the Premier and the Cabinet initiate a planning activity,involving key public servants (from all ministries), leading academics (both classical andecological economists, along with other social and natural scientists), business people,representatives of non-governmental organizations and citizens. This activity should result in acomprehensive recommendation and plan to implement sustainability indicators in Ontariowithin a defined period of time, ideally less than 12 months. The aim should be the publicationof the first indicators 6-12 months after the plan is approved by Cabinet.ReferencesAghion, P., Hemous, D. & Veugelers, R. (2009). Kick-starting the green innovation machine. Retrieved 11/15/2010, 2010, from http://www.voxeu.org/index.php?q=node/4352BBC. (2010). Government planning to measure peoples happiness. Retrieved 12/1/2010, 2010, from http://www.bbc.co.uk/news/uk-politics-11756049Binswanger, M. (2006). Why does income growth fail to make us happier? Journal of Socio- Economics, 35(2), 366-381. doi:10.1016/j.socec.2005.11.040Curry, B. (2010, Wed, 1 Dec). Getting a handle on happiness. The Globe and Mail,A.Upward #211135423 Briefing Note FINALENVS5164 6 December 2, 2010
  • 7. Dimou, M., & Upward, A. (2010). Issue Seminar: Accounting for the Sustainability of the Canadian Economy. Unpublished manuscript.El Serafy, S. (2006). The economic rationale for green accounting. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 55-77). Cheltenham, UK ; Northhampton, MA : Edward Elgar.GIIN. (2009). Global Impact Investing Network: History. Retrieved 11/17/2010, 2010, from http://www.thegiin.org/cgi-bin/iowa/aboutus/history/index.htmlHezri, A. A., & Dovers, S. R. (2006). Sustainability indicators, policy and governance: Issues for ecological economics. Ecological Economics, 60(1), 86-99. doi:10.1016/j.ecolecon.2005.11.019Jollands, N. (2006). Getting the most out of eco-efficiency indicators for policy. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 317-343). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Kuznets, S. (1934). National Income, 1929-1932 Washington, D.C., U.S.A;: United States Congress.Lawn, P. A. (2006). Introduction. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 3-12). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Lawn, P. A. (2006). Eco-efficiency indicators applied to Australia and their policy revelvence. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 344- 375). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Layard, R. (2003). Happiness: has social science got a clue?. London, United Kingdom: London School of Economics, Centre for Economic Performance.Layard, R. (2006). Happiness and Public Policy: a Challenge to the Profession*. The Economic Journal, 116(510), C24-C33. doi:10.1111/j.1468-0297.2006.01073.xLehtonen, M. (2008). Mainstreaming sustainable development in the OECD through indicators and peer reviews. Sustainable Development, 16(4), 241-250. doi:10.1002/sd.378Lintott, J. (1998). Beyond the economics of more: the place of consumption in ecological economics. Ecological Economics, 25(3), 239-248. doi:10.1016/S0921-8009(97)00042-6A.Upward #211135423 Briefing Note FINALENVS5164 7 December 2, 2010
  • 8. Lintott, J. (2006). Environmental accounting and policy making. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 78-95). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Patterson, M. (2006). Selecting headline indicators for tracking progress to sustainability in a nation state. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 421-448). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Peet, J. (2006). Sustainable development indicators and human needs. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 399-420). Cheltenham, UK ; Northhampton, MA : Edward Elgar.Stiglitz, J. E., Sen, A., & Fitoussi, J. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress Paris, France: Commission on the Measurement of Economic Performance and Social Progress.WCED. (1987). Report of the World Commission on Environment and Development: Our Common Future (The Brundtland Commission Report). Retrieved 11/15/2010, 2010, from http://www.un-documents.net/wced-ocf.htmWilliams, J. (2010). Britain announces a happiness index. Retrieved 12/1/2010, 2010, from http://makewealthhistory.org/2010/11/16/britain-announces-a-happiness-index/Victor, P. A. (2008). Managing without growth : slower by design, not disaster. Cheltenham, UK; Northampton, MA: Edward Elgar.Notes1 http://www.sustainablesocietyindex.com/; http://www.wikiprogress.org/index.php/Sustainable_Society_Index;2 http://www.happyplanetindex.org3 http://en.wikipedia.org/wiki/Genuine_Progress_IndicatorA.Upward #211135423 Briefing Note FINALENVS5164 8 December 2, 2010

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