by Robert Costanza, Chair in Public Policy, Crawford School of Public Policy, Australian National University and Editor in Chief, Solutions Presentation given at the 'Beyond-GDP in Africa: Innovative Ideas for a Regional Dashboard' workshop, Centre for the study of Governance Innovation, University of Pretoria. www.governanceinnovation.org

1. Beyond-GDP in Africa: Innovative Ideas for a Regional Dashboard
October 28, 2014
Why it’s time to leave GDP behind
Robert Costanza
• Chair in Public Policy
Crawford School of Public Policy
Australian National University
Canberra ACT 0200, Australia
• Editor in Chief, Solutions (www.thesolutionsjournal.org)

2. Human influence on the earth system is now so large, that a new
geologic epoch (the Anthropocene) has begun. We now live in a “Full
World”
Business as usual is not an option

3. PLANETARY BOUNDARIES: THERE
ARE FUNDAMENTAL ECOLOGICAL
CONSTRAINTS Rockström, J., et al. 2009.
A safe operating space
for humanity. Nature
461:472-475
Steffen, W., J. Rockström,
and R. Costanza. 2011.
How Defining Planetary
Boundaries Can
Transform Our
Approach to Growth.
Solutions. Vol 2, No. 3,
May 2011

5. Fair distribution is essential to quality of life

6. Vision
Tools &
Analysis
Practical
Problem
Solving
How the world is
How we
would like it to
be
Implementation

7. “Empty World” Vision of the Economy
Labor
Land
Economic
Process
Individual
Utility/welfare
Consumption
Cultural
Norms and
Policy
Building
Education,
Training,
Improvement
Investment
Property rights
Private Public
Capital
(Built)
Research
Goods
and
Services
GDP

8. a country’s gross domestic product (GDP) measures
“everything except that which makes life worthwhile”.
Robert F. Kennedy 1968
.

9. “Full World” Vision of the Whole System
Complex property
rights regimes
Human Capital Economic
Production
Process
Goods
and
Services
Well Being
(Individual and
Community)
Consumption
(based on changing,
adapting
preferences)
Evolving
Cultural
Norms and
Policy
Education, training,
research.
Building
Investment
(decisions about, taxes
community spending,
education, science and
technology policy, etc., based
on complex property
rights regimes)
Individual Public
GDP
Wastes
Common
Ecological
services/
amenities
negative impacts on all forms of capital
Restoration,
Conservation
Natural Capital
Built Capital
Solar
Energy
SocialCapital
Waste heat
Institutional
rules, norms, etc.
Materially closed earth system

10. From: Costanza, R., R. de Groot, P. Sutton, S. van
der Ploeg, S. Anderson, I. Kubiszewski, S. Farber,
and R. K. Turner. 2014. Changes in the global value
of ecosystem services. Global Environmental
Change 26:152-158.

11. …we estimated the loss of eco-services from 1997 to 2011 due to land use change
at
$4.3–20.2 trillion/yr.

12. From: Costanza, R. B. Fisher, et al. 2007. Quality of Life: An Approach Integrating Opportunities,
Human Needs, and Subjective Well-Being. Ecological Economics 61: 267-276

13. PERMA: Well-being has five measurable
elements that count toward it
• Positive Emotion (of which happiness and life
satisfaction are aspects)
• Engagement (being in flow, being one with the
music)
• Good Relationships (social capital)
• Meaning and Purpose (belonging to and serving
something you believe is bigger than you are)
• Accomplishment, Achievement, and Mastery
Martin Seligman
Zellerbach Family
Professor of
Psychology, University
of Pennsylvania
Positive Psychology

15. A range of goals for national accounting and their corresponding frameworks,
measures, and valuation methods
Goal
Basic
Framework
Non-environmentally
adjusted measures
Environmentally
adjusted measures
Appropriate
Valuation
Methods
___________
Marketed
value of
marketed goods
and services
produced and
consumed in an
economy
GNP
(Gross National
Product)
GDP
(Gross Domestic
Product)
NNP
(Net National Product)
NNP’
(Net National Product
including non-produced
assetts)
Market values
Economic
Income
Weak
Sustainability
1 + non-marketed
goods
and services
consumption
ENNP
(Environmental Net
National Product)
SEEA
(System of
Environmental
Economic Accounts)
1 + Willingness
to Pay Based
Values (see
Table 2)
___________
Strong
Sustainability
2 + preserve
essential natural
capital
SNI
(Sustainable National
Income)
SEEA
(System of
Environmental
Economic Accounts)
2 + Replacement
Costs,+
Production
Values
Economic Welfare
value of the wefare
effects of income and
other factors
(including
distribution,
household work, loss
of natural capital
etc.)
MEW
(Measure of Economic
Welfare)
ISEW
(Index of Sustainable
Economic Welfare)
GPI
(Genuine Progress
Indicator)
3 +
Constructed
Preferences
Human
Welfare
assessment of
the degree to
which human
needs are
fulfilled
HDI
(Human
Development Index)
HNA
(Human Needs
Assessment)
SWB
(Subjective Well-
Being)
4 +
Consensus
Building
Dialogue
from: Costanza, R., S. Farber, B. Castaneda and M. Grasso. 2000. Green national accounting: goals and
methods. Chapter in: Cleveland, C. J., D. I. Stern and R. Costanza (eds.) The nature of economics
and the economics of nature. Edward Elgar Publishing, Cheltenham, England (in press)

16. Table 1. Some alternative National Indicators of Welfare and Well-Being.
Indicator Type Units Domains Indicators Explanation Area coverage
Temporal
Coverage
References Website
Index of Sustainable Economic Welfare
(ISEW) and Genuine Progress Indicator
(GPI)
GDP modification $ 4 26
Personal Consumption Expenditures weighted by income
distribution, with volunteer and household work added and
environmental and social costs subtracted.
17 countries,
several states and
regions
1950-various 1-3 http://genuineprogress.net/
Genuine Savings
Income accounts
modification
$ 3 5
level of saving after depreciation of produced capital; investments
in human capital ; depletion of minerals, energy, and forests; and
damages from local and global air pollutants are accounted for
140 countries 1970-2008 4,5
http://web.worldbank.org/WBSITE/EXTERNAL/TOP
ICS/ENVIRONMENT/EXTEEI/0,,contentMDK:20502
388~menuPK:1187778~pagePK:148956~piPK:2166
18~theSitePK:408050,00.html
Inclusive Wealth Index
Capital accounts
modification
$ 4 8 Asset wealth including, built, human, and natural resources 20 countries 1990-2008 6 http://www.ihdp.unu.edu/article/iwr
Australian Unity Well-Being Index Survey-based index Index # 14 14 Annual survey of various aspects of well-being and quality of life Australia
2001-
present 7 http://www.deakin.edu.au/research/a
cqol/auwbi/index.php
World Values Survey Survey-based index Index # 10 100's
Periodic (5 "waves" so far) survey of a broad range of variables.
Most used for international comparisons is ranking of "how satisfied
are you with your life?" question.
73 countries
1981-2008
intermittent 8,9 http://www.wvsevsdb.com
Gallup-Healthways Well-Being Index Survey-based index Index # 6 39
Annual survey in six domains: live evaluation, physical health,
emotional health, healthy behavior, work environment, and basic
assets
50 states in US
2008-
present 10 http://www.well-beingindex.com/
Gross National Happiness Survey-based index Index # 9 33
Detailed in-person survey around nine domains: psychological well-being,
standard of living, governance, health, education, community
vitality, cultural diversity, time use, and ecological diversity
Bhutan 2010 11
Human Development Index (HDI) Composit Index Index # 3 4
Index of GDP/person, spending on health and education, and life
expectancy
177 countries
1980-
present 12 http://hdr.undp.org/en/
Happy Planet Index Composit Index Index # 3 3 HPI = subjective well being * life expectancy / ecological footprint 153 countries 3 yrs 13,14 http://www.happyplanetindex.org/
Canadian Index of Well-Being Composit Index Index # 8 80
Includes community vitality, democratic engagement, education,
environment, population, leisure, living standards, and time use
Canada
1994-
present 15 https://uwaterloo.ca/canadian-index-wellbeing/
National Well-Being Index Composit Index Index # 5 5
proxies for built, human, natural and social capital with weights
based on regression with subjective well-being
56 countries 1 yr 16,17
OECD Better Life Index Composit Index Index # 11 25
Includes housing, income, jobs community education, environment,
civic engagement, health, life satisfaction, saftey, and work-life
balance
36 OECD
countries
1 yr 18,19 http://www.oecdbetterlifeindex.org
Well-Being of Nations Composit Index Index # 20 63 63 indicators in 20 domains weighted and ranked 180 countries 1990-2000 20 http://sedac.ciesin.columbia.edu/dat
a/set/cesic-wellbeing-of-nations
Sustainable Society Index Composit Index Index # 5 22 22 indicators in 5 domains ranked with various weightings 150 countries 2 yrs 21 http://www.ssfindex.com/

17. Source: Deaton, 2008.

20. United States GDP/capita and GPI/capita

21. From: Kubiszewski, I., R. Costanza et al. 2013. Beyond GDP: Measuring and Achieving
Global Genuine Progress. Ecological Economics 93:57-68

22. From: Kubiszewski, I., R. Costanza et al. 2013. Beyond GDP: Measuring and
Achieving Global Genuine Progress. Ecological Economics 93:57-68

23. GPI /capita for the 17 countries for which it has been estimated
From: Kubiszewski, Costanza et al. 2013. Beyond GDP: Measuring and Achieving Global Genuine
Progress. Ecological Economics 93:57-68

24. Economic growth Un-Economic growth
From: Kubiszewski, Costanza et al. 2013. Beyond
GDP: Measuring and Achieving Global Genuine
Progress. Ecological Economics 93:57-68

27. Building the future we desire
requires that we measure
what we want, remembering
that it is better to be
approximately right than
precisely wrong.

28. An Overarching Goal for the UN Sustainable Development Goals
Robert Costanza1, Jacqueline McGlade2, Hunter Lovins3, and Ida Kubiszewski1
1. Professor and Chair in Public Policy, Crawford School of Public Policy, the Australian National University, Canberra, Australia
2. Chief Scientist, United Nations Environment Program, Nairobi, Kenya
3. President, Natural Capital Solutions, Longmont, Colorado
4. Senior Lecturer, Crawford School of Public Policy, the Australian National University, Canberra, Australia
To appear in Solutions (www.thesolutionsjournal.org)
Overarching Goal:
a prosperous, high quality of life that is
equitably shared and sustainable
Efficient Alloca on: Building A Living Economy
Fair Distribu on: Protec ng Capabili es for
Flourishing
Sustainable Scale: Staying Within Planetary
Boundaries

29. Figure S1. Relationship between the overall goal of sustainable well-being and the subjective and objective
elements that contribute to it. Only the items in black are currently partially picked up in GDP. Double-headed
arrows indicate that influences go in both directions and that all elements are interconnected.
Source: www.asap4all.org

30. Fig. 1 – Scatterplot of real vs. predicted
values for those countries where both
data are available (r=0.90 ** ).

31. www.asap4all.com

32. Thank You