A longer discussion of the

1. Embedding sustainable development as the ‘central
organising principle’
Summary........................................................................................................................................2
1. There must be clarity about what is valued and the objective of sustainable
development .............................................................................................................2
1. Application of the principle must inform distinctive present day choices in policy and
investment.................................................................................................................3
2. Through its leadership the government can secure a sufficiently broad and deep
mandate for its approach to sustainable development ............................................4
1. There must be clarity about what is valued and the objective of sustainable development
................................................................................................................................................5
1.1 Wellbeing – the heart of the central organising principle............................................5
1.2 Understanding well-being............................................................................................5
1.3 Is the wellbeing concept useful? ...............................................................................6
1.4 Wellbeing over the life-course.....................................................................................7
1.5 Equality and social justice dimension.........................................................................7
1.6 Environmental wellbeing.............................................................................................8
1.7 WAG approach to public health................................................................................10
1.8 Wellbeing and the economy......................................................................................10
1.9 Should we replace GDP?..........................................................................................11
1.10 GDP and Beyond....................................................................................................12
2. Making hard choices in policy and investment.....................................................................14
2.1 Hard choices 1: Trade-offs between long-term and short-term outcomes...............14
2.2 Hard choices 2: Silo breaking and system thinking..................................................14
2.3 Hard choices 3: Using evidence...............................................................................15
2.4 Hard choices 4: investment in resilience and future proofing...................................17
2.5 Would a wellbeing approach change how we look at policy?...................................17
3. It must be possible to secure a sufficiently broad and deep mandate for our approach to
sustainable development ..................................................................................................20
3.1 Some approaches to securing a mandate................................................................20
3.2 Public acceptability changes over time ....................................................................20
3.3 The behaviour change agenda.................................................................................21
4. Conclusion – sustainable development can be a central organising principle...................23
Annex 1: Difficulty in defining sustainable development – a snapshot..................................24
Annex 2. Measuring social and economic progress ...............................................................25
Page 1 of 25

2. Embedding sustainable development as the ‘central
organising principle’
Summary
This paper discusses how the Welsh Assembly Government should embed sustainable
development as its central organising principle. The Government of Wales Act (2006)
establishes the current legal basis for the Assembly Government’s approach to
sustainable development in Wales. Section 79 requires ministers to publish a scheme
setting out how they propose, in the exercise of their functions, to promote sustainable
development. The most recent scheme, One Wales, One Planet, was published by the
Cabinet in May 20091. This establishes Welsh ministers’ commitment to the centrality of
sustainable development in Wales2:
Sustainable development will be the central organising principle of the Welsh
Assembly Government
Having established that sustainable development should be the central organising
principle for a government, the question remains: “what does this actually mean in
practice?”. We suggest three conditions must be met for the concept to be useful for a
government. These are summarised in the sections below and elaborated in the rest of
this paper.
1. There must be clarity about what is valued and the objective of sustainable
development
A clear definition and overall aim must be agreed for use in Wales and command broad
support – and it must be clear what is that we value and are trying to produce through
sustainable development. To qualify as a ‘central organising principle’ for a government or
country, the concept must be very widely applicable and make sense when applied an
agenda that spans health, the economy, education, environment, planning etc. Drawing
on the definitions used in One Wales, One Planet, we propose that the outcome from
sustainable development should be ‘maximisation of wellbeing of Welsh citizens over
the long term’ as an overall goal – a ‘super-outcome’ to which all other outcome
objectives contribute. There are several important feature of this:
• It is not exclusively or primarily a ‘green’ idea – it is a broad concept and covers all
the components of well-being – health, material wellbeing, employment and self
actualisation, community and social relations, etc
• It is has a strong environmental basis, recognising that eco-systems provide
valuable services that underpin the wellbeing of people – ranging from food and
clean water to their value for amenity and aesthetics.
• It implies a shift of emphasis from measuring value through economic activity
alone to a wider concept of ‘value’. Value is defined here as those things that
1
Welsh Assembly Government, One Wales: One Planet, a new Sustainable Development Scheme for Wales, 22 May 2009.[link]
2
The SD scheme establishes sustainable development as the central organizing principle for the Assembly Government, but also
extends the approach to the wider public sector: “we will encourage and enable others in the wider public sector in Wales, to embrace
sustainable development as the central organising principle”.
Page 2 of 25

3. contribute to wellbeing – much of which would be non-marketed or personally
created.
• It stresses long-termism – focussing on the full life course of an individual and the
wellbeing of people in the future. It makes us consider natural, human, social,
economic capital as stocks to manage and endowments to hand on, and avoiding
the transfer of harms to the future.
• We care about the distribution of wellbeing and fairness, placing greater weight on
people with poor wellbeing and tackling misery. The objective could also be
expressed as ‘harm minimisation’. The stronger role for government is in tackling
misery.
• The focus on ‘Welsh citizens’ is not parochial, but recognises interconnectedness,
and that people in Wales are not indifferent to the rest of the world.
• There is a good and growing evidence base about wellbeing drivers
These ideas are explored in greater depth in section 1.
1. Application of the principle must inform distinctive present day choices in
policy and investment
The way the concept is applied must inform policy decisions and resource allocations in
the present. If it does not present hard-edged, distinctive choices, it has limited practical
value and becomes little more than a vague aspirational statement about the future. We
argue that pursuit of wellbeing does surface hard trade-offs, and that these are different to
the trade-offs of more conventional policy-making. For example
• It will favour investments that yield higher benefits over the longer term at the
expense of shorter term measures with lower gains. Sustainable development
should lower implicit societal and political discount rates.
• It can mean breaking down silos, better integration and system redesign to allow
resources to flow to the most effective approaches, to exploit synergies and account
for externalities.
• It will rely on rigorous application of evidence – especially cost-effectiveness
evidence, to ensure that we achieve as much as possible with the available
resources
• It may involve greater emphasis on resilience, future proofing, and system
thinking – and increase investment at the expense of consumption
Generally we might expect this to mean:
• Greater focus on prevention / early intervention: with manifestations in health,
criminal justice, environment & energy, family policy, education etc.
• More attention to dealing early and effectively with failure – as this has long
terms costs and consequences. For example, do we focus enough on children who
are failing at school, recognising that the school doesn’t bear the full life-course
consequences? Do we allow too many to end up in prison?
Page 3 of 25

4. • More integration across silos – for example, so that we have the right links
between NHS and social care to avoid bed-blocking, better handling of transition
(eg. when someone comes out of prison), use of ‘upstream’ changes to farming
practices rather than downstream water treatment for water quality.
• Greater focus on mental health and recognition of drivers of wellbeing in, say,
planning where greater weight could be given to securing housing supply
Note: this approach can be viewed as an assertive efficiency agenda. We can see
sustainable development as achieving the outcomes that are most highly valued
(wellbeing maximised and fairly distributed over the longer term), through the most efficient
use of resources (cost effectiveness), irrespective of institutional barriers (silo-busting).
These ideas are explored in greater depth in section 2.
2. Through its leadership the government can secure a sufficiently broad and
deep mandate for its approach to sustainable development
An active and committed government will lead and persuade its citizens through hard
choices and sound trade-offs. However, in any democracy, the public has a veto at
elections and can reject a government – and ministers should not be expected to do things
that will lose elections. Further challenges may come from those involved in delivering
changes: professions, service providers, regulators, public servants, or those that believe
they will lose out can all potentially defect from sustainable development. However, the
government is not a powerless hostage to public opinion, and by the way it governs it can
lead. A government seeking to secure a mandate for sustainable development would:
• Build trust and confidence – for example through external scrutiny, independent
advice, piloting and experimentation, openness and searching evaluation.
• Act consistently and comprehensively. People worry about investing in the long-
term if they feel there will be free-riders or that the ‘rules’ will change later.
• Create compelling narratives – that explain what we are doing and how we change
Wales for the better over the longer term.
• Seek to make larger changes over a longer period – ‘slow, big wins’.
Governments overestimate what they can achieve in the short term and
underestimate what they can achieve in the long term”.
• Promote behaviour change and culture change– use techniques from behavioural
science and economics to change attitudes, motivation and behaviour
• Robust political leadership will determine the maximum rate at which change will be
accepted by the public and stakeholders. However, there may be limits to the
changes that any government can make before being overwhelmed by opposition
and unintended consequences and this establishes a political constraint on SD.
These ideas are explored in greater depth in section 3.
Page 4 of 25

5. 1. There must be clarity about what is valued and the objective of
sustainable development
The term ‘sustainable development’ has become widely used and misused – a brief note
on the definitional problems is at Annex 1. However, if it is to be a central organising
principle for the Assembly Government, it must have a clear meaning as it applied in
Wales.
1.1 Wellbeing – the heart of the central organising principle
The Government of Wales Act provides powers to Welsh ministers to promote and
enhance economic, social and environmental well-being3. One Wales, One Planet
provides the following definition, built on the legal foundations of the Act.
In Wales, sustainable development means enhancing the economic, social and
environmental wellbeing of people and communities, achieving a better quality of
life for our own and future generations
Note the strong citizen focus in this definition. In Wales, sustainable development is
defined in terms of the enhancement of the well-being of people and communities, and
quality of life. There is broad stated public support for this approach: a 2005 poll4, 89% of
those surveyed in Wales agreed with the statement:
A government’s prime objective should be achieving the greatest happiness of the
people, not the greatest wealth.
The other important feature of this definition is long-termism – reflecting the pursuit of
wellbeing for future generations, locking in a commitment to maintain ‘endowments’ or
natural, social, human and economic capital that will affect wellbeing in the future.
It is important to recognise that sustainable development is not only or primarily an
environmental concept – it is not ‘greening up’ of government activity, but a broader and
deeper concept.
1.2 Understanding well-being
There is a growing literature on well-being and a compelling evidence base on what
determines well-being is accumulating, with some good overview surveys5 6 7. In 2009,
President Sarkozy of France commissioned a panel of eminent economists, including two
Nobel laureates, to examine how better to measure economic performance and social
progress8. The authors focus on well-being and sustainability as the overall objective:
3
GOWA (2006) establishes a number of functions for ministers, including several of a general nature such as implementing EU
legislation or transfer of ministerial powers. The two specific functions relate to promotion of wellbeing (s.60) and support of culture
(s.61). [link]
4
NOP for the BBC The Happiness Formula. October 2005. [link]. The detailed poll is accessible from this news story. The
relevant statistic is drawn from page 97.
5
Young Foundation, The State of Happiness, 2010 [link].
6
Social Market Foundation, Wellbeing: how to live the good life and what the government should do to help. [link]
7
Layard R, Happiness: lessons from a new science. Penguin, February 2005. A technical annex to the book has been made available
on line [link]
8
Stiglitz, Sen, Fitoussi , Report by the Commission on the Measurement of Economic Performance and Social Progress, October
2009 (for President Sarkozy of France) [http://www.stiglitz-sen-fitoussi.fr]
Page 5 of 25

6. “the unifying theme of the report, is that the time is ripe for our measurement
system to shift emphasis from measuring economic production to measuring
people’s well-being. And measures of well-being should be put in a context of
sustainability.”
The chart below draws on the panel’s description of the dimensions of wellbeing.
The authors draw an important distinction between wellbeing now, and the means to
maintain wellbeing in the future:
Sustainability poses the challenge of determining if at least the current level of
wellbeing can be maintained for future generations
Current well-being has to do with both economic resources, such as income, and
with non-economic aspects of peoples’ life (what they do and what they can do,
how they feel, and the natural environment they live in). Whether these levels of
well-being can be sustained over time depends on whether stocks of capital that
matter for our lives (natural, physical, human, social) are passed on to future
generations.
The main recommendations of the Commission on the Measurement of Economic
Performance and Social Progress are summarised at Annex 2.
1.3 Is the wellbeing concept useful?
Though a relatively new field in social, psychological and economic research, there is now
a considerable body of evidence and data that illuminate what does and does not
contribute to wellbeing, and what governments may do to influence it. Information
resources are expanding rapidly: the World Database of Happiness9 contains over 6,000
studies of measures of wellbeing, trends and correlations. A couple of illustrative
examples are shown below:
The purpose of this paper is not to summarise this extensive literature, but to show that the
concept has the potential to draw conclusions that inform policy and investment. For
example, Deutsche Bank has examined economic drivers of wellbeing in OECD countries
and drawn some conclusions:
Source: Deutsche Bank Research, The broad basis of Source: Deutsche Bank Research, The happy
societal progress. 200810 variety of capitalism. 200711
9
Erasmus University, Rotterdam. World Database of Happiness [link]
Page 6 of 25

7. Another example compares the relative impact of different life events on wellbeing, relative
to a change in income.
Relative impacts on wellbeing compared to a one-third loss of income
Source: Richard Layard, 200312. The table compares impacts on wellbeing arising from various life events
with a one-third fall in income, set to a base of 1.
The findings in the wellbeing literature are often contested and subject differing
interpretations. However, this is no different to most of the economic and social research
we rely on to guide more conventional policy, and it does not preclude policymakers
making assessments and judgments about what the research suggests we should do.
1.4 Wellbeing over the life-course
As well as the wellbeing of future generations, it is also worth looking at the drivers of
wellbeing over the life-course of an individual – often with the realisation that early
interventions can pay large wellbeing dividends later in life. A major study by the Foresight
Programme, Mental Capital and Wellbeing13, examined many drivers of well-being over the
life-course. One of its ‘system maps’ is shown below.
1.5 Equality and social justice dimension
The definition above is elaborated to reflect social justice and equality objectives. We are
clear that the distribution of well-being is important. The definition is qualified as follows:
• In ways which promote social justice and equality of opportunity;
10
Stefan Bergheim, The Broad basis of societal progress: freedom, trust, tolerance, education and much more. Deutsche Bank
Research, 2008. [link]
11
Stefan Bergheim, The happy variety of capitalism, Deutsche Bank Research, 2007. [link]
12
Layard, R. What would make a happier society? Lionel Robbins Memorial Lectures delivered at LSE 5th March 2003 [link ]
13
UK Department of Business Innovation and Skills, Foresight Programme, Mental Capital and Wellbeing, [link]
Page 7 of 25

8. This means that we should give greater weight to improvements in the well-being of those
with the lowest levels of well-being – the wellbeing formulation may be inverted to make
the harm reduction and minimisation priority. Social justice might be defined in terms of
the distribution of well-being between citizens. This concept that has a parallel in
conventional economics – “equity weighting” is used in the relationship between income
and welfare (a pound for a poor person is worth more than for a rich person)14. This idea
is integral to pursuit of wellbeing because the research literature shows that many of the
determinants of wellbeing are relative: a person’s wellbeing is determined with reference to
others. More fundamentally, it has been argued recently (in ‘The Spirit Level’) that overall
societal wellbeing outcomes are inversely related to inequality15:
“…the effects of inequality are not confined just to the least well off: instead they
affect the vast majority of the population”.
In some ways, this view implies that the redistributive trade-off in addressing inequality
may not be as hard as they appear as everyone benefits. However, this analysis has been
subject to serious challenge16.
1.6 Environmental wellbeing
The One Wales, One Planet definition also recognises that over the longer term, the
natural and cultural environments are critical determinants of well-being. The definition is
further qualified as follows:
• In ways which enhance the natural and cultural environment and respect its limits
using only our fair share of the earth’s resources and sustaining our cultural
legacy.
Ecosystems services and wellbeing. Some commentators argue that an exclusive focus
on well-being will undervalue the environmental dimension of sustainable development. In
fact, ecosystems are integral to human wellbeing. The relationship between well-being
and the environment is through ‘eco-systems services’ – valuable non-market outputs like
water quality, landscape, soil productivity etc. that enhance wellbeing. This approach is
expressed in the Millennium Ecosystems Assessment17 in the chart below.
When looking at major environmental systems, like the climate, oceans, forests, our
concern is still ultimately about people. We are concerned about the stability of the climate
because of what instability does to human welfare and things that matter to us, including
wildlife. This ‘anthropocentric’ view recognises that nature itself is value-free and has
been through large and violent changes in climate in history.
14
A £1 increase in the income/consumption of a poor person has more value (‘utility’ U) than the same increase in the income of a rich
person. HM Treasury uses an evidence-based approximation that utility doubles for each halving of consumption (C). In other words
an extra £1 of consumption by someone earning £10,000 a year will be worth twice as much as to someone earning £20,000. The
function is U=log(C). See HM Treasury Green Book, Annex 5 [link]
15
Wilkinson R, Pickett K, The Spirit Level, Allen Lane, 2009. [slideset]
16
Policy Exchange, Beware False Prophets: Equality, the Good Society and The Spirit Level, July 2010. [link]
17
Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Synthesis. Island Press, Washington, DC.
2005. [link]
Page 8 of 25

9. Links between Ecosystems and Wellbeing
Source: Millennium Ecosystem Assessment, 2005
The new natural environment framework, A Living Wales18, will be a major statement of the
implementation of sustainable development principles in Wales as applied to the natural
environment. The first objective of the policy is:
sustainable development demands that we create a positive future path for
development in its widest sense. This means building sustainable use of our land
and seas into the direction of all policies, plans and programmes so that our
economic, environmental and social needs are not placed in inappropriate conflict
with one another.
Addressing climate change. For challenges like climate change, the required rate of
change justified by the science and global equity almost certainly exceeds the current
willingness of the public to accept major changes to lifestyles, consumption and to the
economy, infrastructure and landscape. Research for WAG by the Tyndall Centre
suggests that to have a 50% chance of meeting the widely held objective of holding global
warming to less than 2 degrees Celsius, developed countries would need to peak
emissions in 2012, then subsequently reduce by 8% pa by 2015 and 20% pa by 2020,
moving to full decarbonisation by 2026-719. This is exceedingly challenging. Welsh
Ministers have opted for a more modest target than this: from 2011, a 3% reduction per
annum on emissions over which Wales has some control. Though this is more ambitious
than most developed countries, it falls short of what science tells us necessary to avoid
18
A Living Wales, a new framework for our environment, our countryside and our seas, Welsh Assembly Government 2010
[link]
19
Kevin Anderson. 3%, 6% and 9% - Emission Reduction Scenarios for Wales. Presentation to the WAG Cabinet sub-
Committee on Climate Change, Nov 2009.
Page 9 of 25

10. dangerous climate change. We are left with the challenge that ‘living within environmental
limits’, if adopted rigorously, would require a degree of intervention for which we do not yet
have broader public support. It is this that informs the third condition: that we must be able
to secure a broad mandate for sustainable development. There are similar challenges
with meeting ecological footprint20 targets.
Regulation, compliance and unregulated impacts. A great deal of government effort
and private sector investment goes in to complying with regulations – health and safety,
environmental, workplace rights and so on. Regulations can be seen as attempts by
legislators to secure wellbeing outcomes by proxy (for example, in setting water or air
quality standards) whilst establishing a level playing field so that all businesses face equal
compliance costs. There is an ever-present danger of excessive focus on those aspects of
wellbeing that are regulated at the expense of those that are not subject to regulation. For
example, air quality standards aimed at health protection may close an industrial plant in a
deprived area causing (unregulated) physical and mental health impacts associated with
unemployment and greater deprivation. This is not argue against high environmental
standards, but for legislators to take a rounded view of wellbeing and to introduce high
standards carefully and with long transition times.
1.7 WAG approach to public health
Sustainable development and public health have strong overlapping themes. The Welsh
Assembly Government and its partners have identified four main ambitions for 2020 for the
public health agenda, Our Healthy Future21. These are:
• Across society, we will take care of and responsibility for, our own and others’
health and well-being.
• Organisations and individuals will work together to improve and protect the health of
the people of Wales.
• The gap between communities with poor health and those with good health will be
reduced.
• Healthy public policy will support and enable people to lead healthy lives.
1.8 Wellbeing and the economy
The Assembly Government’s Economic Renewal Programme stresses the centrality of
wellbeing and the important place of the economy in sustainable development:
‘As a Government, we want a strong economy, not as an end in itself, but for the
integral contribution it can make to the quality of life and the economic, social and
environmental wellbeing of people and communities in Wales, placing sustainable
development as our central organising principle.
Some argue that economic growth and GDP do not contribute to wellbeing beyond a
certain level22 - an effect sometimes known as the Easterlin paradox, after the economist
20
Ecological Footprint is a composite index based on estimated productive land area required to provide resources or mitigate a variety
of environmental impacts. Wales’ ecological footprint is currently 5.16 global hectares per person, compared to a global availability of
1.88 global hectares. It tells us that we are using 2.7 times our fair share of the planet's resources to sustain our lifestyles. The 2008
assessment suggested Wales' ecological footprint is increasing at 1.5% per year. Unchecked, this means it could rise by 20% by
2020. See Stockholm Environmental Institute, Wales’ Ecological Footprint - Scenarios to 2020 for Welsh Assembly Government,
2008 [link]
21
Welsh Assembly Government, Our Healthy Future, Consultation summary. 2009 [link]
Page 10 of 25

11. Richard Easterlin23. We do not accept this. More recent analytical research suggests there
is a clear link between conventional measures of income and wellbeing: researchers at the
University of Pennsylvania analysed income and wellbeing data for over 140 countries,
and drew three main conclusions24:
First, we show that within a given country, richer individuals report higher levels of
life satisfaction. Second, we show that richer countries on average have higher
levels of life satisfaction. Third, analyzing the time series of countries that we
observe repeatedly, we show that as countries grow, their citizens report higher
levels of satisfaction. Importantly, we show that the magnitude of the relationship
between satisfaction and income is roughly the same across all three comparisons,
which suggests that absolute income plays a large role in determining subjective
well-being.
It is however the case that there are diminishing marginal returns – meaning that each
additional pound or dollar or income adds less to wellbeing.
1.9 Should we replace GDP?
There has been a long debate about the appropriateness of GDP or GNP as a measure of
‘progress’ or societal success. Perhaps the most eloquent words spoken about the use of
conventional economic measures were spoken by Robert Kennedy in 196825:
… GNP — if we judge the United States of America by that — that GNP counts air
pollution and cigarette advertising and ambulances to clear our highways of carnage.
It counts special locks for our doors and the jails for the people who break them. It
counts the destruction of the redwoods and the loss of our natural wonder in chaotic
sprawl. It counts napalm and it counts nuclear warheads, and armored cars for the
police to fight riots in our cities. It counts Whitman's rifle and Speck's knife, and the
television programs which glorify violence in order to sell toys to our children.
Yet the Gross National Product does not allow for the health of our children, the
quality of their education, or the joy of their play. It does not include the beauty of our
poetry or the strength of our marriages, the intelligence of our public debate or the
integrity of our public officials. It measures neither our wit nor our courage, neither
our wisdom nor our learning, neither our compassion nor our devotion to our country;
it measures everything, in short, except that which makes life worthwhile. And it can
tell us everything about America except why we are proud that we are Americans
There are measures that attempt to address some the deficiencies highlighted in
Kennedy’s speech. These include the Index of Sustainable Economic Welfare (ISEW)26
22
For example, Richard Layard – Lionel Robbins memorial lecture 2003 [link] argued that national average happiness is
independent of national income above $15,000. The effect was referred to by the Archbishop of Wales in his Christmas 2010
message [link]
23
Easterlin R. Does Economic Growth Improve the Human Lot? Some empirical evidence, 1974. University of Pennsylvania
[link].
24
Sachs D, Stevenson B. Wolfers J. Subjective Wellbeing, Income, Economic Development and Growth, University of
Pennsylvania, for the Federal Reserve Bank of San Francisco. September 2010 [link]
25
Robert Kennedy, 18 March 1968, at University of Kansas
26
ISEW deducts ‘defensive’ spending, reflects changes in the stock of natural capital, and values non-marketed productive
work (housekeeping, caring etc). It was developed in Daly, H. & Cobb, J. For the Common Good. 1989. [Wikipedia article]
Page 11 of 25

12. and Genuine Progress Index27. However, we do not recommend adopting that approach
for Wales. This is for three main reasons.
• Firstly, there is limited political, official and public attention and resources available
to give to embedding sustainable development. This capital needs to be used on
developing the ideas and machinery that create meaningful change. It is more
important to focus on articulating and making hard choices (see section 2) and on
building a political mandate (section 3). GDP has its uses and abandoning it would
needlessly arouse suspicion that we were no longer concerned with the economy.
• Secondly, an aggregate index will often mix different very measurements and in
doing so lose important information. We prefer to use a suite of indicators that
characterise wellbeing in a disaggregated way. In fact, we should see this as a
major purpose of the new National Survey for Wales.
• Thirdly, it may distract from improving the way we consider more conventional
economic data. President Sarkozy’s commission recommended a focus on the
household perspective, greater attention to wealth and debt, and concern for
income distribution – these ideas are to be welcomed.
1.10 GDP and Beyond
If we do not seek to replace GDP, there is great scope to widen the scope of measures of
progress. There is now considerable activity in statistics organisation devoted to what is
loosely termed “GDP and beyond”, drawing a deliberate contrast with “Beyond GDP”.
There are several relevant initiatives underway:
• Statistics Wales is incorporating wellbeing measures in the new National Survey of
Wales28 and the Assembly Government Cabinet agreed in January 2010 that a new
sustainable development indicator would be ‘the wellbeing of Wales’, with the
‘overall life satisfaction’ element of wellbeing to be measured using the National
Survey29.
• The UK Office for National Statistics is developing new measures for wellbeing30
and publishing research articles on the subject31
• European national statistics organisations have agreed the Sophia memorandum
on measuring progress, wellbeing and sustainable development32;
27
GPI is promoted by ‘Redefining Progress’ organization [web link] [Wikipedia article]
28
Statistics Wales, National Survey for Wales. 2011. [link]
29
Welsh Assembly Government, Cabinet minutes, 11 January 2010. [link]
30
ONS, Measuring national wellbeing, Consultation. 2010 [link]
31
ONS, Understanding wellbeing. September 2010 and ongoing. [link]
32
Sophia memorandum: measuring progress, wellbeing and sustainable development, Sophia Bulgaria, September 2010
[conference] [memorandum]
Page 12 of 25

13. • The European Union has a broad project, GDP and Beyond, to support the Europe
2020 agenda33. The European Commission has issued a communication34 and the
European statistical organisation, Eurostat, has developed a work programme35.
• The OECD has a programme on measurement of the progress of societies36;
• President Sarkozy of France established the Commission on the Measurement of
Economic Performance and Social Progress lead by top economists.37
33
European Commission and partners: Beyond GDP: measuring progress, true wealth and the wellbeing of nations [link].
Note that this evolved into GDP and Beyond, to avoid the idea that GDP had become an obsolete measure.
34
COM(2009) 433 final. GDP and beyond: measuring progress in a changing world. August 2009. [link]
35
Eurostat, GDP and Beyond, [link]
36
OECD, Measuring the Progress of Societies, [link]
37
Stiglitz J, Sen A, Fitoussi JP, Commission on the measurement of economic performance and social progress, 2008 and ongoing
[link].
Page 13 of 25

14. 2. Making hard choices in policy and investment
The application of sustainable development as a central organising principle will lead to
several forms of immediate ‘hard choices’ and different choices – if it does not, then it has
little value. Each type of choice is about securing the best possible long-term well-being
return from the available resources. These choices can be framed as a broad efficiency
and effectiveness agenda for a government, and are particularly important when the
resources are becoming more scarce. Four examples are suggested below.
2.1 Hard choices 1: Trade-offs between long-term and short-term outcomes
Sustainable development create trade-offs and tensions between dealing with the
immediate needs of the current population and investing in better outcomes later in the life
course of people who are young today or for future generations. A determination to
pursue long-term outcomes presents governments with some very hard-edged choices
about the use of resources and policy focus. For example, it may mean a gradual shift of
resources to preventative health or early-years interventions with lower spending on
treatment. It may mean action to 'grip' teenagers going wrong, rather than deal with the
consequences later in life in prisons. It means making investments today that may bear
fruit handsomely decades from now – a kind of societal “invest to save”. In a growing
economy, these changes may be managed by allocating proceeds of growth to longer-
term objectives.
2.2 Hard choices 2: Silo breaking and system thinking
Silo-breaking. The principle requires us to break down traditional administrative
boundaries or ‘silos’. For example the best health outcomes may be achieved through the
public health agenda largely pursued outside medical settings. Good schools may be
more effective at reducing crime than the police. Highly disruptive families may impose
costs on many different services, but there may be no service that sees the full picture and
can act accordingly. Some of the best environmental strategies may be in 'resource
productivity' and realised through a growing economy, new housing and new vehicles.
System thinking. In each case, the design of the optimum approach involves taking a
view of the full system in which outcomes are determined. This in itself is difficult, as most
policy makers are themselves located in a silo – for example with responsibilities for
schools but not for impacts on criminal justice system or unemployment that may flow from
school failure. This requires development of policy-making structures that allow a full
system view of wellbeing determinants – and this does not happen spontaneously.
Breaking silos and promoting long-termism do not happen easily, but these are important
concepts with the Enabling Government framework, reflecting its outcome focus.
Techniques such as pooled budgets, commissioner-provider splits, innovation margins and
institutional champions (for example, Hungary has a Commissioner for Future generations)
can all help.
The diagram below illustrates some of the challenges that arise from costs and benefits
arising at different times and in different silos.
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15. Hard choices – SD challenges
Wellbeing interventions – where benefits fall relative to costs
Smart grid Public health
Future Water metering Youth inclusion vs prison
Climate adaptation Intensive family
interventions
Social care vs NHS beds
NEETS to work
Now Catchment sensitive farming
Renewables decarbonisation
vs water treatment
Biofuels
Energy efficiency
Same silo Different silo
The diagram (work in progress) maps the challenges of wellbeing programme redesign by showing where
the investment costs and resulting benefits fall in different parts of the system or in the future.
Transfer of harms. If we have ‘innovative silos’, in which each attempts to maximise its
own direct performance with the resources allocated to it, there will be a series of transfers
or ‘dumping’ of harms or costs to other silos:
• Between different parts of the public services – for example in the costs associated
with school failure from education to criminal justice, or from the planning system to
housing benefit, or from NHS mental health services to the police.
• Between tiers of government (central to local) – eg. from pension provision to social
care
• Between sectors (from public to private) – for example in transport investment to
congestion, from flood defences to households via flood insurance and cleaning up
costs
2.3 Hard choices 3: Using evidence
It may sound obvious, but the use of evidence, especially economic evidence related to
long-term cost-effectiveness, should be an important guide to where policy and investment
is focussed. One Wales, One Planet establishes this approach38:
Full costs and benefits - we will identify and take account of the full range of costs
and benefits, including those over the long-term, those not measured in monetary
terms (such as environmental costs and benefits), and those costs that are global
as well as local in our policy making. We will promote whole system thinking, taking
account of risks - especially to the economic, social and environmental wellbeing of
communities - and uncertainties associated with action and inaction.
38
Welsh Assembly Government, One Wales, One Planet, May 2009. See supporting principle 2 on page 26. [link]
Page 15 of 25

16. A good example is the data that describes cost of carbon reductions and the available
potential for different technologies. The 'marginal abatement cost curve' for the UK in 2020
as set out in the 2007 UK Energy White Paper is shown below. The technologies to the
left of the chart hanging below the axis are those that save users more than they cost –
and these should generally have priority in policy and investment terms. Using this sort of
evidence, and consideration of wider benefits would tend to focus energy investment on
demand side energy efficiency measures rather than energy production technologies. On
the basis of this sort of evidence we have reorientated WEFO funding towards energy
efficiency. We should note, with some concern, that much of the national response to
climate change adopts technologies from the right hand side of this chart: UK investment
in renewables is by 2020 is expected to reach £136 billion, but only £21 billion for energy
efficiency39.
Why is using evidence a ‘hard choice’? The reason it can be a hard choice to pursue
evidence is that interest groups (both external and internal to government) can form
around particular ideas, approaches or technologies. Further, evidence can challenge
prior commitments, established ideas and received wisdom – all creating barriers to
effective sustainable development (and sometimes in the name of sustainable
development).
Evidence in public sector innovation. The private sector has an effective innovation
system – unattractive ideas ultimately cause business failure, successful ideas are
'selected' by consumers and create growth. The key ingredient in private sector innovation
is failure: this allows a lot of new ideas to be tried, but ensures resources are directed
away from poor products or services. The equivalent function in the public sector is
performed by scrutiny and voter disaffection – but this can cause public sector agents to
'close ranks' and defend poor ideas or ineffective spending. A rigorous approach to
39
Dieter Helm, in Delivering a 21st Century Infrastructure for Britain, Policy Exchange , 2009. [link]
Page 16 of 25

17. evidence and evaluation is one way that the public sector can mimic some of the
innovation drivers in the private sector, providing the evidence is acted upon.
The Assembly Government is strengthening its approach to evidence-based policy-making
through development of the Policy Mill, Policy Gateway and Policy Integration Team – it is
also, of course, the core business of civil servants to use evidence. However, the
structural changes implied by adopting wellbeing as an organising principle may require
more profound programme redesign. Some possible examples of how our approach may
change are set out in the following section.
2.4 Hard choices 4: investment in resilience and future proofing
There are trade-offs between consumption and investment in infrastructure. This is visible
in the interpretation of the duty of regulators40 to protect consumer interest by holding bills
down (freeing up income for current consumption), but sometimes at the expense of
investment that would serve consumers or citizens better in the future. There are
immense challenges in infrastructure: decarbonising and securing energy supplies;
introducing economic demand management (smart grids, road pricing, congestion
charging); developing a supply infrastructure for electric vehicles; climate change
adaptation through water and flood management; digital inclusion and the move to very
high speed broadband; meeting housing and mobility demands of a growing, aging,
affluent and atomising population; and the aggressive pursuit of resource productivity in
natural resources, waste and energy. ‘Social infrastructure’, for example for social and
health care and for all tiers of education will face similar demands.
A government pursuing sustainable development will be diverting a greater share of
national resources into investment and into infrastructure, at the expense of current
consumption.
2.5 Would a wellbeing approach change how we look at policy?
The use of wellbeing-maximisation as a central organising principle is only worthwhile if it
changes the way we design our policies and services. These are some examples, not a
comprehensive list of how a long-term wellbeing maximisation approach may change the
way we make policy or deliver services41:
Schools
• Ensure the incentives and performance management for schools give proper weight
to addressing the needs of those failing and at risk of leaving unqualified,
considering the lifetime negative wellbeing consequences. The full lifetime cost of
failure is not fully internalised in schools incentive structures
• Teach ‘resilience’ – drawing on the evidence that it improves academic
performance and employability.
40
Note ‘under investment’ pre-dates the current privatised regulated industries – one of the prime motivations for water privatisation
was to correct historic under-investment in environmental measure and water quality.
41
These are not conclusions, more like questions that might be prompted by applying a ‘long-term wellbeing maximisation’
principle.
Page 17 of 25

18. Health
• Place progressively greater emphasis and resources to evidence-based
preventative measures, as envisaged in Our Healthy Future, and relatively less to
treatment – though recognise that demographics and societal preference will drive
underlying demand
• Challenge the approach to the last years of life – considering whether the expense
and intensity of interventions in the last two years of life provide the dignified death
that most people say they want.
• Place greater emphasis on mental health, with investment in cognitive behavioural
therapies.
Families and community
• Integrate services and intervene intensively for the 2-3% families at most risk. A
dysfunctional family can create costs up to £250,000/year across many different
domains – and no single agency is likely to have the full picture or be able to make
the optimum investment.
• Focus on adults and parenting skills, even if the objective is to secure wellbeing and
social mobility of the children
• Find ways to help isolated older people to develop social networks and remain
involved
• Recognising that relationship breakdown has negative wellbeing consequences,
provide support for couples in difficulty and address potential drivers o breakdown
(drugs, debt, prison)
• Promote opportunities for neighbours to get to know each other, based on clear
evidence that this tends to enhance wellbeing
Criminal justice system
• Learn from Finland. Shift sentencing policy to minimise overall harm, including cost
to taxpayer and consequences of reoffending: generally moving to community
sentencing, restorative justice and prison as a last resort.
• Greatly expanding ‘youth inclusion’ programmes and focussing on failure at school.
• Focus prisons on reducing reoffending, with greater attention aid to preparing for
law-abiding life outside, avoiding extremely disruptive short-stay sentences and
greater attention to transitions from custody to the community
• Adopt a harm minimisation approach to drugs – perhaps including prescribing
Economy
• Hard choices may lead to accepting a lower rate of GDP growth in exchange for
reduced inequality and wellbeing.
Page 18 of 25

19. • Focus on assisting the transition from economic inactivity to productive activity. The
focus would be on unemployment and jobs at all levels in the economy, not just hi-
tech or knowledge-based.
• Focus on building the foundations of sustainable growth (establishing conditions in
which forward looking and well managed businesses can thrive – with clear
signalling about environmental and other wellbeing imperatives) rather than direct
business support
• Reshape apprenticeships and other programmes for teenagers to strengthen
psychological fitness to help young people find and keep work
• Ensure the planning system properly reflects the wellbeing value of employment
and development
• Design transportation, housing and economic development policy to reduce
commuting time and allow a more localised economic and social geography
Environment and rural
• Promote resource efficiency as a dominant environmental strategy.
• In energy sector transition, place greater emphasis on the demand side and energy
efficiency – relatively less on renewables. Be wary of high carbon cost technologies
(microgen, PV etc)
• Address diffuse water pollution through catchment management on farms, with less
reliance on expensive and energy intensive water treatment.
• Recognise total cost of flooding includes private costs (pooled cleaning up costs
through insurance) and seek harm minimising allocation between avoiding floods,
reduction of impact when a flood happens and costs of damage/repair.
• Give greater weight in the planning system to the value that people place on owning
their own home and living in pleasant surroundings
• More carefully differentiate protected areas – avoid overprotecting some and under-
protecting others and give weight to accessibility as a wellbeing driver
• Recast farming as a land management occupation and production of a mix of
market good (food) and non-marketed goods and services – for which payments
are made.
• Only go beyond regulations made at UK or EU level where the wellbeing case
justifies it (applies generically).
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20. 3. It must be possible to secure a sufficiently broad and deep mandate
for our approach to sustainable development
This section discusses the third principle for embedding sustainable development as a
central organising principle: that the rate and extent of change in advancing sustainable
development must be sufficiently acceptable to citizens. This idea is addressed in One
Wales, One Planet, which defines one of the core principles for sustainable development
as citizen involvement:
Involvement - people and communities are at the heart of sustainable development, so
we will be inclusive in our involvement of all our stakeholders in the development of our
policies and programmes, and the identification of solutions that meet their needs, pro-
moting innovation in the way that we deliver services.
Securing a sufficient mandate’ is an expression of the same idea expressed in the negat-
ive – that the agenda for sustainable development cannot go beyond what people and
communities are willing to accept at any time, whilst aiming to change that over time. The
negative expression is chosen because it reflects the reality of resistance to change and
the real challenge that ambitious governments experience in bringing citizens with them.
3.1 Some approaches to securing a mandate
Some approaches to winning public acceptance include42:
• Establishing a clear narrative that supports the policy and is maintained over time
• Promote a coherent governing philosophy – in this case sustainable development as a
central organising principle meaning the maximisation of wellbeing over the longer term
• Piloting and developing compelling case studies – allowing for problems to be ironed
out at small scale, while providing convincing exemplars that build confidence
• Carefully cultivating public trust in the government
• Allow, encourage and seek independent critique and advice
• Adopting behaviour change strategies (see below)
• Keep back resources to fund change and innovation (don’t allow all resources to be
consumed in the programmes of the past)
• Making large changes gradually to avoid dislocations and to allow for structural adjust-
ment. The following observation from Geoff Mulgan captures this idea:
Governments overestimate their power to achieve change in the short term, and under-
estimate it in the long term
3.2 Public acceptability changes over time
The discussion of major environmental challenges in relation to the ecological footprint and
climate change (see 1.6 Environmental on page 8) suggests that profound and rapid
changes are justified by the science. Ministers have determined that, at least for now, an
ambitious but achievable rate of change should form the basis of our approach to environ-
mental targets. This is an example of applying the principle of securing sufficient public ac-
ceptance. However, attitudes and the willingness to accept or demand change will evolve
42
This section draws on the thinking of Geoff Mulgan. Lessons of power, Prospect Magazine, May 2005. [Link] and his book Good
and bad power: the ideals and betrayals of government. Penguin, 2006
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21. and measures that seem unrealistic now may be regarded as essential in 10 years. This
dynamic has been the case with acceptability of restrictions on public smoking for ex-
ample. However, smoking provides a reminder of how slow change can be. The Royal
College of Physicians first highlighted the mortal risk from smoking in 1961. The impacts
of smoking are largely personal and controllable through stopping, whereas impacts of cli-
mate change are global, systemic and require unprecedented international and intergener-
ational collective action, which even if achieved can only reduce the rate at which the haz-
ard risks increase.
3.3 The behaviour change agenda
Policymakers have recognised that many of the most important decisions related to sus-
tainable development are in the hands of individuals, families, communities and busi-
nesses. For this reason, interest in influencing behaviour has grown rapidly in recent
years and there is a substantial body of popular43 and professional work to draw on44 45 46
47
.
The UK sustainable development strategy develops a simple model which focuses on four
main elements (each beginning with ‘E’)48.
The 4-E model for behaviour change
From: Securing the future: UK sustainable development strategy, 2005. Chapter 2
The model captures four essential features of a behaviour change strategy:
1. Encourage: establish an incentive structure
2. Enable: make it easy to respond to the incentives
43
Thaler and Sunstein Nudge: Improving decisions about health, wealth and happiness, 2008 [Nudge blog]
44
Darnton A GSR Behaviour Change Knowledge Review. Reference Report: An overview of behaviour change models and
their uses, London. Government Social Research. 2008 [Link]
45
GCN/COI Communications and behaviour change. 2010 [Link]
46
Cialdini Influence: The psychology of persuasion. 2007 [Cialdini’s Wikipedia entry]
47
New Economics Foundation Behavioural Economics: Seven Principles for Policy Makers, 2005 [link]
48
UK Government, Securing the future: delivering the UK sustainable development strategy, [Link]. See Chapter 2, Helping
people make better choices.
Page 21 of 25

22. 3. Engage: developing motivation to change behaviour
4. Exemplify: lead by example and maintain trust
In Wales, we are adopting this framework – recognising the value of its simplicity and cov-
erage and the merits of sticking with one memorable model. Within this model, it is import-
ant to have detailed understanding of human behaviour. There is much work in this area,
but a particularly useful formulation for policy-makers has been provided by the Institute for
Government, termed ‘MINDSPACE’ (an acronym) 49
Many of the outcomes we seek from sustainable development and wellbeing maximisation
require ‘co-production’ or decisions and action to be taken by individuals, families com-
munities or businesses where regulation would not be possible or desirable and ‘soft’
measures are necessary. The science of behaviour change will become an important part
of policy making and delivery for sustainable development.
49
Institute for Government, MINDSPACE Influencing behavior through public policy, 2010 [link]
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23. 4. Conclusion – sustainable development can be a central organising
principle
The overall theme of this paper is that it is possible to make sustainable development a
‘central organising principle’ for a government, wider public sector and nation.
The government must be able to state its objective clearly. In this case we propose the
maximisation and fair distribution of wellbeing of people in Wales over the longer term. It
will place greater emphasis on the long term outcomes and investment in resilience and
infrastructure. It must draw rigorously on the cost-effectiveness evidence to know what
works and ensure limited resources are used to greatest effect. In both policy-making and
delivery it will need to take a full systems view and break down silos or other institutional
barriers to maximising wellbeing. Finally, it will recognise sustainable development to be a
political programme, requiring high standards or governance and trust building to secure a
mandate for the hard choices that sustainable development must involve.
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24. Annex 1: Difficulty in defining sustainable development – a
snapshot
The idea of sustainable development gained prominence following the Brundtland
Commission in 198750
Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs
As an idea, ‘sustainable development’ commands widespread support: for example
through 178 countries’ support for Agenda 21 and the Rio Declaration of 1992, its position
as Millennium Development Goal seven, and through the 2005 UK Sustainable
Development Strategy, Securing the Future. Yet as an idea, it is poorly defined and
overused. It is often little more than an exhortation to resolve difficult problems and to
reconcile the irreconcilable51, a vague aspiration to create a better future52 or a programme
of primarily environmentally-based activities53. It has sometimes been used as a vehicle
for promoting particular ideologies or economic prescriptions54 and it has been embraced
by some extremely unlikely businesses55. It is sometimes described in terms of managing
‘capitals’56 and has its ‘weak’ and ‘strong’ variants57.
Critics divide into two main camps. Many argue that the term is too loose to be useful58:
I know that this term is obligatory, but I find it also absurd, or rather so vague that it
says nothing
They argue that it fails through contradiction – who could favour development that is
unsustainable? Others claim that the concept is so challenging that it only has meaning
following huge changes in human civilisation that are well beyond what is generally
described by proponents of sustainable development, for example that living within
environmental limits cannot be consistent with economic growth59 or the resource
demands of current and projected human populations are untenable60.
50
United Nations. "Report of the World Commission on Environment and Development." General Assembly Resolution 42/187, 11
December 1987 [Link]
51
For example, the Division of Sustainable Development in the UN says: “The achievement of sustainable development requires
the integration of its economic, environmental and social components at all levels”.
52
For example, the UK Sustainable Development Strategy sates: “The goal of sustainable development is to enable all people
throughout the world to satisfy their basic needs and enjoy a better quality of life, without compromising the quality of life of future
generations”
53
The UK Sustainable Development Strategy focuses on four areas, of which three are environmentally driven: Sustainable
Consumption and Production: Climate Change and Energy; Natural Resource Protection and Environmental Enhancement; and,
Sustainable Communities
54
For example, Agenda 21 states: 2.3 The international economy should provide a supportive international climate for achieving
environment and development goals by: (a) Promoting sustainable development through trade liberalization…
55
Paul Adams, CEO of the tobacco multinational BAT says: “For us, sustainability means addressing key business-related social,
environmental and economic impacts in a way that aims to bring value to all our stakeholders, including shareholders.”
56
See Jonathan Porritt, former Chairman of the UK Sustainable Development Commission, Capitalism as if the World Matters, 2007.
The concept was developed by Forum for Future and finds many variants in the literature. The five capitals of this model are –
Natural, Social, Human, Manufactured and Financial.
57
Strong sustainability does not allow for substitution of natural capital for human capital, the weak version does, aiming to maintain
total capital stock.
58
Luc Ferry, French philosopher, cited in translation on Wikipedia (link)
59
For an exploration of these issues see Tim Jackson, Prosperity Without Growth? The transition to a sustainable economy, 2009.
Sustainable Development Commission.
60
International Policy Network, Morris J, Goklany I (eds) The population bomb revisited. Vol 1, 3, Electronic Journal of Sustainable
Development, 2009. www.ejsd.org
Page 24 of 25

25. Annex 2. Measuring social and economic progress
Recommendations from: Report by the Commission on the Measurement of
Economic Performance and Social Progress by Professor Joseph E. Stiglitz,
Professor Amartya Sen and Professor Jean-Paul Fitoussi
1: When evaluating material well-being, look at income and consumption rather than production
2: Emphasise the household perspective … The household perspective entails taking account of
payments between sectors, such as taxes going to government, social benefits coming from
government, and interest payments on household loans going to financial corporations. Properly
defined, household income and consumption should also reflect in-kind services provided by
government, such as subsidized health care and educational services.
3: Consider income and consumption jointly with wealth … Measures of wealth are central to
measuring sustainability. What is carried over into the future necessarily has to be expressed as
stocks – of physical, natural, human and social capital.
4: Give more prominence to the distribution of income, consumption and wealth
5: Broaden income measures to non-market activities … Many services that households produce for
themselves are not recognized in official income and production measures, yet they constitute an
important aspect of economic activity
6: Quality of life depends on people’s objective conditions and capabilities. Steps should be taken to
improve measures of people’s health, education, personal activities and environmental conditions. In
particular, substantial effort should be devoted to developing and implementing robust, reliable
measures of social connections, political voice, and insecurity that can be shown to predict life
satisfaction.
7: Quality-of-life indicators in all the dimensions covered should assess inequalities in a
comprehensive way
8: Surveys should be designed to assess the links between various quality of life domains for each
person, and this information should be used when designing policies in various fields
9: Statistical offices should provide the information needed to aggregate across quality-of-life
dimensions, allowing the construction of different indexes.
10: Measures of both objective and subjective well-being provide key information about people’s
quality of life. Statistical offices should incorporate questions to capture people’s life evaluations,
hedonic experiences and priorities in their own survey.
11: Sustainability assessment requires a well-identified dashboard of indicators. The distinctive
feature of the components of this dashboard should be that they are interpretable as variations of
some underlying “stocks”. A monetary index of sustainability has its place in such a dashboard but,
under the current state of the art, it should remain essentially focused on economic aspects of
sustainability.
12: The environmental aspects of sustainability deserve a separate follow up based on a well-chosen
set of physical indicators. In particular there is a need for a clear indicator of our proximity to
dangerous levels of environmental damage (such as associated with climate change or the depletion
of fishing stocks.)
Page 25 of 25