Measuring progress

Measuring progress in a changing world is the focus of an European Union (EU) Commission communication launched at a high-level workshop earlier this month. The actions proposed in this communication aim to improve the measurement of a nation’s progress by complementing the current and best known measure of economic activity, Gross Domestic Product (GDP). As a part of efforts to make the shift towards a low carbon, resource-efficient economy the Commission will present a pilot version of a comprehensive environmental index in 2010. The European Statistical System will implement Environmental Accounting as a standard in Macro-economic statistics.

European Environment Commissioner Stavros Dimas said that to “meet the challenges of the 21 st century we need more integrated and transparent policies. To design these policies we need to better assess where we are now, where we want to go and how we can get there. To change the world we need to change the way that we understand the world and to do this we need to go beyond GDP. ”

At  the workshop the Commission presented ways forward to complement Gross Domestic Product (GDP) in order to steer our policies towards green growth and a low carbon, resource-efficient and inclusive society. The actions in the communication represent the practical follow-up to the Beyond GDP conference that was held in November 2007.

GDP is used in economic forecasting and allows comparisons of countries and of developments over time. It is conceptually well defined, clear and has stood the test of time.

GDP was not intended to be a measure of well-being. It doesn’t pick up on issues that are vitally important to the quality of our lives such as a clean environment, social cohesion or even how happy people are. It is not in itself a sufficient guide for modern policy making that covers social and environmental objectives. This becomes a problem when GDP is understood as the unique yardstick for progress. The Communication outlines five actions that represent the next practical steps beyond GDP.

A pilot of an environmental index will be proposed in 2010 that will assess progress in the main fields of environmental policy and protection. The index will cover areas such as greenhouse gas emissions, loss of natural landscapes, air pollution, water use and waste generation.

The Commission will step up efforts to produce environmental and social data more rapidly. At present such data is often published after two to three years while key economic figures are released with only a few weeks’ delay. The Commission’s aim is to develop near real-time information for decision-making.

More accurate reporting on distribution and inequalities which will allow a better definition of policies on social and economic cohesion.

The Commission will develop a European Sustainable Development Scoreboard in order to allow an identification of environmental trends and a benchmarking of best practices. This scoreboard will be based on the existing set of Sustainable Development Indicators.

The Commission is working to complement GDP and National Accounts – which present production, income and expenditure in the economy – with environmental and social accounts.

Speaking at the launch event, Commissioner Dimas expressed his hope that these actions, would lead to an index of environmental sustainability being published in parallel to GDP figures.

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