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Module 6 Indicators
GDP, NNP, Green NNP and ISEW Human Development
Index Ecological Footprint, Material Flow
Analysis,
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GDPand some critiques
When an earthquake destroys a city, GDP will
increase Quantity vs. quality Simple way of
measurement distribution is not
considered type of production is not
considered (education or army) non paid leasure
time is not accounted for Market/non market ratio
( own production, domestic work) not
accounted First improvement Real GDP
(Purchasing Power Parity)
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From GDP to NNP (net national product)
Accounts for capital depreciation (but only
man-made capital) NNP GDP Km
depreciation While GDP is a measure of flows
only, NNP accounts for stocks and flows. But
again, natural capital is not considered (and not
even social-human capital). as if national
accountants thought nature to be infinite (which
was true when the physical (and monetary) economy
was small. But not now.
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to Green NNP
.so the green NNP has been proposed. Green NNP
GDP Km depreciation Kn depreciation non mkt
amenities (WTP) Other types of accounting, that
measure not in crematistic terms, but in
physical terms, are not considered so important
and are called satellite accounting. .but
might these satellites be bigger than the
actual planet? (Naredo)
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ISEW
Daly and Cobb, 1990 Index of Sustainable
Economic Welfare. It is still a monetary based
measure Starting from GDP, a long list of
corrections, to get the ISEW Figures show a
growing split between GDP and ISEW Necessary but
not sufficient.
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Human Development Index
Is a measure that comprises more indicators,
especially from the human and social scale. But
again, these indicators are western based for
exampletraditional knowledge is not
accountededucation is only based on years of
schoolwe could argue that loss of cultural
diversity could be GOOD
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Ecological Footprint,
How much area should an economy need if all
materials and energy used were coming from only
renewable resources?See report from WWFWWF
report i.e. The living planet 2002http//www.pan
da.org/news_facts/publications/general/livingplane
t/index.cfm Is not an absolute measure it
depends from prices and elasticity It comprises
energy flows
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Material Flow Analysis,
Paper from EKC vienna Wuppertal report pag.65
read from pag. 63 to pag. 70Wuppertal
Institute Annual reporthttp//www.wupperinst.org/
Sites/publications.html Wuppertal paper green
accounting and material flow analysis.
Alternatives or complements?http//www.wupperinst
.org/Publikationen/WP/WP106.pdf
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As a summary measures of sustainable
development
Goods(consumption) Ends,measures of utility
Economic system
Resources Means,measures of opportunity
SD non decreasing capital(with different forms
of measure)
SD non decreasing utility(with different forms
of measure)