Is there a suitable overall indicator for
Sustainable Development
– to supplement GDP?
What are the possible candidates?
Patrick ten Brink
Head of Brussels Office
IEEP
(Part of Beyond GDP team, but this presentation
does not represent an official position)
EEB Seminar
Reviewing the EU SDS
Brussels
Friday 16th November 2007
`

Presentation Structure
Background: Some interesting Facts & the Beyond GDP context for this
presentation (see www.beyond-gdp.eu)
Indicators to measure progress, true wealth & wellbeing – what is out there?
From candidates to ideas for ways forward - some ideas to add to the debate
The Beyond GDP conference an initiative of Commissioner Dimas, and a partnership
between the European Commission, European Parliament, Club of Rome, OECD, & WWF.
Supported by team: Ecologic, MNP, IEEP & media partners.
See www.beyond-gdp.eu
This contribution to the debate does not represent any formal position from Beyond GDP

● ● ● Interesting Facts – Did you know that:
On GDP - different roles, different views
“Without measures of economic aggregates like GDP, policymakers would be adrift in
a sea of unorganized data. The GDP and related data are like beacons that help
policymakers steer the economy toward the key economic objectives”. Paul Samuelson,
in Samuelson and Nordhaus (1995)
Yet
Simon Kuznets - GDP's creator – already in 1934 said that “The welfare of a nation
can scarcely be inferred from a measurement of national income”.
& after almost 30 years further thought, added
“Distinctions must be kept in mind between quantity and quality of growth, between its
costs and return, and between the short and the long term. Goals for more growth
should specify more growth of what and for what.”

On GDP and natural resources
A country could cut down all its forests and deplete its natural resources and this
would show only as a positive gain to GDP despite of the loss of capital.
Source: Millenium Ecosystem Assessment (MA) 2005 see
http://www.millenniumassessment.org
On GDP and social equity
“Progress measured by a single measuring rod, the GNP, has contributed significantly
to exacerbate the inequalities of income distribution”
Robert McNamara, President of the World bank, 1973
On GDP and learning from business
“No one would look just at a firm’s revenues to assess how well it was doing. Far more
relevant is the balance sheet, which shows assets and liability. That is also true for a
country.”
Joseph Stiglitz, 2005 in Foreign Affairs,
see http://www.foreignaffairs.org/.html
GDP is not enough; we need to go beyond GDP

Beyond GDP: What Questions will the
Conference address?
What can economic measures such as GDP do best and where are other
measures of progress, true wealth and wellbeing needed?
What are our societies’ health and wellbeing based on and how can nature be
taken into account ? What are our nations wealth based on?
What measures are viable, useful complements to GDP – eg ecological
footprints, human development index, poverty index, happy planet index or
genuine savings approach?
Where can we usefully use the complementary measures and hence improve the
measurement and reporting of the true wealth and wellbeing of nations?
What needs to be done to support the process of moving beyond GDP?
Effectively same set of questions as the EEB seminar.

● ● ● What are the candidates for going
beyond GDP?
Figure 1: Growth in number of composite indices (UNDP Office of Development Studies, 2006). The indices cover a
diverse set of issues including competitiveness, governance, social aspects, human rights, the environment, security
and globalization.
More and more people are searching for better indicators
Source: from MNP (2007)

What indicators are out there?
GDP
ISEW/GPI Is there a best?
Genuine savings index
or simply
Human Development Index (HDI) Horses for courses ?
Human Poverty Index (HPI)
Question of ‘fit for purpose’?
Happy planet index
What purpose ?
Footprints (ecological, carbon)
&
Factor efficiency
Does it do the job?
EU-SDS indicators Can it be developed to do the job?
Structural indicators
Recall: The welfare of a nation can
Happy and Health life years
scarcely be inferred from a
+ frameworks/approach measurement of national income”.
National accounts satellites
see www.beyond-gdp.eu for descriptions and links

What indicators are out there? Competing?
HDI GSI
The World Bank (2005a) Where is the Wealth of Nations? Measuring Capital for the XXI Century.
2005 Human Development Report, UNDP
GPI
EF
Redefining Progress (2006) http://www.rprogress.org/projects/gpi/
Living Planet Report 2004, http://www.panda.org/news_facts/publications/key_publications/living_planet_report/index.cfm

Categorisation of Indicators and SD Pillars
Economic
GDP
‘All-in-one’ approaches
Greening
GDP
‘All-together’
Genuine Happy HDI
SEEA savings Planet approaches
Index
EU-SDS
ISEW/
indicators
GPI
NCI
Foot-
EU-Env. Social
print
indicators indicators HPI
Environmental Social
Source: IEEP

Indicators – Some very specific coverage
and uses; others combine issues
Social
Economic NNP HPI
HDI
GDP Social
indicators
Happy
Genuine
Planet
savings
Index
ISEW/
GPI
Greening EU-SDS
GDP indicators
SEEA
Foot-
EU-Env.
indicators
print NCI
Environmental
Source: IEEP

Where are which used ?
Should we judge them all in the same way?
Measurement
Tools: IA, CBA, MCA
Robust data on economy,
society & environment SEEA
+ Analysis
Reporting to
Evaluation of policies scientists /
analysts &
policy makers Decision making
Social EU-Env.
indicators indicators
Policy making
Communicating the facts – still Goal setting
Foot-
robust data, just the right robust HDI print
data in the right form.
Press
Reporting to the
outside world Public discussion
Headline indicators Foot-
GDP print HDI
Source: IEEP
A: Don’t judge indicators for public by same criteria as that for analysts

From candidates to ideas for ways forward - some
ideas to add to the debate
Measurement Eg We need to understand the state of our natural capital,
ecosystem functions, services.
Reporting Eg Countries should be encouraged to do and public more
environmental accounts – stock accounts and flow.
Eg need to understand ecosystem functions, services and
Analysis contributions to true wealth and wellbeing society better
Eg do a climate risk assessment
Decision making Eg Revise way structural funds are allocated/dispersed
Goal setting Eg Scope for greater use of ecological and carbon footprints
Eg Scope for greater use of factor efficiency targets
Reporting Eg National climate risk index and national ratings
Press Eg scope for footprints, happiness and also impacts of natural
hazards on livelihoods; national risk
Public discussion Eg scope for footprints, happiness, healthy life years, HDI
Personal contribution to debate - does not represent Beyond GDP

Conclusions
• Not one ‘best’, but a range of purposes and range of indicators
• Range of ways forward – some on measurement, some on analysis,
some policy setting etc
• Developments in parallel - some make more robust and fit for purpose,
some create new.
• Need to ensure that what is used is right for what it is used for.
• Need to broaden what is measured, understood, used, and debated.
• We need measures that build on robust data, useful for policy and
understandable by the public.
• Many right answers. Need for many actors to take forward
What can and will be done ?
– debate here, debate on Monday and Tuesday at the Parliament, and after - -
commitment across parties for way forward already started.

IEEP is an independent not for profit institute dedicated to advancing an
environmentally sustainable Europe through policy analysis, development
and dissemination.
Thank you
Patrick ten Brink
Head of Brussels Office
IEEP
www.ieep.eu
EEB Seminar
Reviewing the EU SDS
Brussels
Friday 16th November 2007
`