This document summarizes Daniel O'Neill's research on measuring progress towards a steady state economy (SSE). It presents a conceptual framework with socio-economic and biophysical indicators to measure stocks, flows, and scale of resource use. Preliminary results show that most economies are still growing, some are degrowing but not where most needed, and none have achieved a steady state. Life expectancy and satisfaction are highest in degrowing and stable economies. Unemployment and inflation remain challenges to address with policy changes to achieve an SSE. The research provides a way to measure progress towards macroeconomic goals aligned with sustainability.

1. Measuring Progress in the
Degrowth Transition to a
Steady State Economy
Daniel W. O’Neill
CENTER for the SUSTAINABILITY
ADVANCEMENT of the RESEARCH
STEADY STATE ECONOMY INSTITUTE
2nd Conference on Economic Degrowth, Barcelona
March 26–29, 2010

2. The Degrowth Transition to a SSE
Growth Degrowth SSE
Size of Economy
Carrying
Capacity
Time 2

3. The Conceptual Framework
Those goals that are desired only for
• Life Satisfaction • Hedonic Well-being
Socio-economic
Ultimate Ends themselves, and are not Flourishing to
• Health •
the means
achieve any other end.
Accounts
• Meaningful Work • Community
The goals that the economy is expected
• Leisure • Education
Intermediate Ends
to Meeting Basic Needs • Good Governance
• deliver.
• Equality • Stability
The factories, machines, and skilled labour
Intermediate Means that transform natural resources into
• Built Capital • Population
Biophysical
products and services.
Accounts
• Materials • Biocapacity
The natural resources that sustain life and
Ultimate Means
allEnergy
• economic transactions.
3

4. The Steady State Economy Accounts
Socio-economic Accounts:
Measure the functioning of the socio-economic
system, and how effectively it delivers well-
being
Include subjective and objective indicators
Biophysical Accounts:
Measure the annual rate of change of
biophysical stocks and flows over a 10-year
period (e.g. 1995–2005), and the scale of
these flows in relation to ecosystem sources
and sinks
4

5. Stocks, Flows, and Scale
Environment
Human
Energy Energy
Population
Sources Sinks
Material Built Material
Inputs Capital Outflows
5

6. Biophysical Accounts: The Indicators
Stocks
Population growth rate
Built capital growth rate
Flows
Energy use growth rate
Material inputs growth rate
Material outflows growth rate
Scale
Ratio of material throughput to
the capacity of ecosystems to:
Regenerate materials
Assimilate wastes
6

7. The Indicators (in Practice)
Stocks
Population growth rate Data readily available
Built capital growth rate Working on this…
Flows
Data readily available
Energy use growth rate
Material inputs growth rate Biomass, Minerals,
and Fossil Fuels
Material outflows growth rate
CO2 Emissions
Scale
Ratio of material throughput to
the capacity of ecosystems to: Ratio of Per Capita
Regenerate materials Ecological Footprint
to Fair Earthshare
Assimilate wastes
7

8. Some Results: Growth Economies
Change in Stocks (%) Change in Flows (%) Scale
Country Built Population Energy Materials CO2 EF Ratio of
Capital (In) (Out) EF to FES
Cambodia .. 2.0 9.9 0.9 9.4 3.7 0.5
China .. 0.8 6.5 3.9 6.3 4.3 1.0
Spain .. 1.0 4.3 3.3 4.7 3.1 2.8
U.S. .. 1.0 0.8 0.2 1.0 1.4 4.6
World .. 1.3 2.2 1.9 2.3 1.5 1.3
Yellow Shrinking (< –0.5%/year) or Scale Too Small (<0.8)
Green Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)
Red Growing (>0.5%/year) or Scale Too Large (>1.2)
8

9. Some Results: Degrowth Economies
Change in Stocks (%) Change in Flows (%) Scale
Country Built Population Energy Materials CO2 EF Ratio of
Capital (In) (Out) EF to FES
Moldova .. -1.3 -1.5 -3.1 -3.3 -1.3 0.6
Poland .. -0.1 -1.1 0.4 -1.8 -0.7 1.9
Romania .. -0.5 -2.1 -1.1 -2.3 -0.2 1.4
Ukraine .. -0.9 -0.3 -0.6 -1.0 -2.6 1.3
Yellow Shrinking (< –0.5%/year) or Scale Too Small (<0.8)
Green Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)
Red Growing (>0.5%/year) or Scale Too Large (>1.2)
9

10. Some Results: Stable Economies
Change in Stocks (%) Change in Flows (%) Scale
Country Built Population Energy Materials CO2 EF Ratio of
Capital (In) (Out) EF to FES
Cuba .. 0.3 0.1 0.2 0.1 2.6 0.9
Germany .. 0.1 0.2 -2.4 -0.3 -1.0 2.0
Sweden .. 0.2 -0.2 3.3 -1.4 0.2 2.5
Switzerland .. 0.4 0.5 2.1 0.2 -0.2 2.4
Yellow Shrinking (< –0.5%/year) or Scale Too Small (<0.8)
Green Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)
Red Growing (>0.5%/year) or Scale Too Large (>1.2)
10

11. The Pathway to a SSE
Degrowth Stability Growth
10
Large
Too
Desirable Undesirable
Degrowth Growth
Optimal
Scale
1 SSE
Undesirable Desirable
Degrowth Growth
Small
Too
0.1
-2 -1 0 +1 +2
Change in Flows
11

12. The Pathway to a SSE – Results
0.7
5 US
Desirable Undesirable
Degrowth Growth
Ratio of Per Capita Ecological Footprint
Switzerland
UK Spain
Germany Poland Country Years to
to Fair Earthshare
FES
Ukraine
Romania
Germany 64
China
Poland 91
1
0.0 Cuba
Switzerland 156
Ukraine 17
Moldova
Cambodia
Undesirable Desirable
Degrowth Growth
0.2
-0.7
-5 0 5
Change in Ecological Footprint (% /year)
12

13. The Pathway to a SSE – Results
0.7
5 US
Desirable Undesirable
Degrowth Growth
Ratio of Per Capita Ecological Footprint
Switzerland
UK Spain
Germany Poland
Life Satisfaction (0–10)
to Fair Earthshare
Ukraine
Romania Happy (≥7)
China Relatively Happy (6–6.9)
1
0.0 Brazil
Cuba
Colombia Relatively Unhappy (5–5.9)
Unhappy (<5)
Moldova
Cambodia
Undesirable Desirable
Degrowth Growth
0.2
-0.7
-5 0 5
Change in Ecological Footprint (% /year)
13

14. Life Expectancy & Life Satisfaction
Life Expectancy Life Satisfaction
(Years) (0-10)
Too Small 62 5.4
Size of
Ecological Fair Earthshare 70 6.7
Footprint Too Large 75 6.9
Degrowing 72 6.5
Change in
Ecological Stable 69 6.3
Footprint Growing 68 6.2
Decreasing 69 5.3
Change in Stable 75 6.7
Population
Increasing 67 6.2
Life expectancy and life satisfaction are highest when:
Ecological footprint is large (but degrowing)
Population is stable
14

15. Unemployment & Inflation
Unemployment Inflation
(%) (%)
Too Small 6.0 7.6
Size of
Ecological Fair Earthshare 5.7 5.0
Footprint Too Large 7.8 13.8
Degrowing 9.3 18.1
Change in
Ecological Stable 8.1 12.4
Footprint Growing 5.6 6.2
Decreasing 11.4 50.0
Change in Stable 8.7 12.4
Population
Increasing 6.0 7.2
Unemployment and inflation are lowest when:
Ecological footprint is close to a fair earthshare
Population and the ecological footprint are growing
15

16. Conclusion
To measure progress we need two sets of
indicators:
Biophysical and Socio-economic
The Steady State Economy Accounts provide a
framework with these indicators
Preliminary results indicate:
We live in a world of growth economies
A number of economies are degrowing
Not the ones where degrowth is needed most
Rates are slow
There are no steady state economies
Some economies are closer than others
Social conditions are good in these countries
16

17. Conclusion
Life expectancy and life satisfaction
Higher in degrowing and stable economies than in
growth economies
Correlate with resource use that is too high
Unemployment and inflation remain key issues
to resolve
Significant structural and policy changes will be
required
To achieve a SSE we must change our
macroeconomic goals
17

18. Thank you!
Dan O’Neill
d.oneill@leeds.ac.uk
CENTER for the SUSTAINABILITY
ADVANCEMENT of the RESEARCH
STEADY STATE ECONOMY INSTITUTE
www.steadystate.org