IGP Director Professor Henrietta Moore writes for Environment Journal along with Sarah Davidson, CEO of Carnegie UK
Is GDP really a good measure of prosperity? How could GDP better account for our lived experiences, climate, biodiversity and social capital?
In a new joint opinion piece for Environment Journal, IGP Director Professor Henrietta Moore and CEO for Carnegie UK, Sarah Davidson, question the adequacy of GDP as a measure of prosperity and progress. The report proposes that we need more than economic performance if we are to more accurately reflect the challenges of the 21st century. Measuring prosperity accurately requires a whole systems approach at the local level, identifying specific outcomes for community and environmental health. We must broaden the measure of prosperity and wellbeing by using locally defined metrics like IGP’s Prosperity Index and Carnegie UKs Gross Domestic Wellbeing (GDWe) tools, to reflect the difference between GDP and collective wellbeing, to provide alternative insights into social progress.
At the Institute for Global Prosperity, we believe that GDP is a 20th century metric not fit for the 21st century. We are in a critical position where we must substantially regenerate the planet and improve the quality of people’s lives. Whilst GDP presents a good measure of activity in the economy, it tells us nothing about inequality or environmental degradation.
In the report with Carnegie UK and Professor Henrietta Moore’s March 2022 address to the Environmental Audit Committee (EAC) inquiry in the House of Commons, a strong case is made for the quarterly publication of a ‘basket of indicators’ to sit alongside GDP. These would include up to 10 factors such as, water, air, carbon sequestration, biodiversity gain, social capital, health, and domestic violence. These indicators would be published quarterly alongside GDP, as well as annually in a ‘State of the Nation’ report to provide a realistic picture of the levels of prosperity across the United Kingdom, aligning the UK's economic goals with environmental sustainability and social capital.
Our lives today are more complex than ever and the foundations of our wellbeing far more diverse. To address the challenges of the 21st century, a more holistic approach to effectively measure social progress is required. This approach needs to be one that provides governments with dimensions on our economic, social, environmental and democratic dimensions of wellbeing, alongside GDP, to ensure more effective and long-term policy-making at the local level.
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