Briefing Note: Can regular government publication of indicators play a role in achieving...

A.Upward #211135423 Briefing Note FINAL ENVS5164 1 December 2, 2010

Briefing Note by Antony Upward, Student #211135423

1. Premise

Briefing note to the Premier of Ontario prepared by a cross-ministry working group of policy advisors working under the direction of the Ontario Ministers of: Finance, Environment, Health, Education, Natural Resources, Aboriginal Affairs, Energy, Tourism and Culture, Children and Youth Services, Community and Social Services, Agriculture, Economic Development and Trade, and Transportation.

2. Issue

• Can regular government publication of indicators play a role in achieving sustainability?

3. Response

Government publication of sustainability measures covering all three dimensions of sustainable development (environment, economic, and social) would initiate multiple positive feedback loops in society with multiple interlocking benefits:

• Initiate and sustain innovation in education, business and not for profit sectors. Each sector would feel compelled and energized to understand their impacts on the measures, plan and execute appropriate responses.

• Initiate and sustain a learning conversation for all members of society on the objectives, options, benefits and costs of sustainable development. In turn this would give all ministries the social mandate to take part in these conversations, developing and executing new policies.

• Enable government to show vision and leadership for a better future for all Ontarians within a well accepted United Nations mandate*.

If the frequency and timing of publication of sustainability measures were aligned with existing measures, such as GDP, this would enhance these benefits by allowing contemporaneous comparison of existing and new indicators.

* Since the 1987 United Nations approval of the Brundtland Commission report (WCED, 1987), sustainable development has become an accepted and urgent policy goal for governments globally.


Without regular publication of authoritative sustainability measures all groups within society are left to define, plan and measure sustainable development on their own. This reduces confidence, increases risk for all parties, and slows down the realization of this key policy objective.

In summary: “What gets measured gets done” (Anonymous).

4. Considerations

There are two dimensions to this recommendation:

1. Why introduce government published indicators of sustainable development now? The indicators are ready for use by Ontario: the definition of indicators and the processes to choose the most applicable ones are reaching a level of maturity where they are ready to be used at scale to define, plan and achieve sustainable development.

2. Which indicators should be used? There are choices to be made: at least three schemes capture both the complexity of the three dimensions of sustainability and provide easy to follow “headline” index: Sustainable Society Index (SSI)1, Happy Planet Index (HPI)2, and the Genuine Progress Indicator (GPI)3.

There are three alternatives approaches to responding to this issue (See Table 1 below):

Examples of countries exploring and / or acting on this recommendation include: The UK’s recent announcement that it will be working to introduce a measure of happiness to complement GDP (BBC, 2010), and the recommendations from the broader measurement work of the Sarkozy “Commission on the measurement of economic performance and social progress” in France (Stiglitz, Sen, & Fitoussi, 2009).


Table 1 – Alternative Responses to The Issue of Regular Government Publication of Sustainability Indicators

Alternative Benefit Risk

A. Choose a set of indicators, publish on same schedule and with positioning comparable to other major indexes (GDP, Inflation, Unemployment); Simultaneously take part in the community evolving the index.

Maximum acceleration to citizen learning about and achievement of sustainable development.

Over time indicators will improve.

Criticisms of selected indicators create sufficient noise which prevents benefits.

B. Announce time line to choose and publish sustainable development indicators and join community evolving the index.

Provides opportunity for consensus to form around selected measures.

Provides opportunity to tune indicators to Ontario specifics.

Without publication of measurements, selection of measures is hard to understand and support. Criticisms of sustainable development without data from the indicators creates sufficient noise which presents progress to sustainable development

C. Continue with current status quo.

Low reputational risk from many stakeholders

Realities of climate change and related problems cause citizens and stakeholders to view government as out of touch.


5. Background

Concerns with Existing Indicators as a Measure of Sustainability

GDP has since its inception been known to be an inappropriate measure for overall societal well being. As Simon Kuznets, one GDP’s originators, stated in 1934: “...the welfare of a nation can, therefore, scarcely be inferred from a measure of national income...” (Kuznets, 1934, p.7).

However, until the mid-1970’s in most Western countries there was a positive relationship between GDP and individual and social well-being, and this supported the general belief that GDP was linked to prosperity sand hence well-being.

However, since that time the positive relationship between GDP and well-being is no longer true in Western countries, and further the gap is widening (Binswanger, 2006). This reality has led leading social scientists to recommend a formal switch away from GDP as the generally accepted measure of societal progress and development. In its place they recommend a move to indicators which measure well-being or happiness more directly (R. Layard, 2003; R. Layard, 2006). Indeed, Lintott suggests that “there is no reliable link between consumption and welfare”, and hence “the whole basis for using GNP as a starting point in constructing a better measure of progress is lacking” (1998, p.264).

Very specifically, the 2009 Sarkozy commission, which consisted of 22 globally recognized economists and other social and natural scientists, recommended “that time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being. And measures of well-being should be put in a context of sustainability.” (Original emphasis) (Stiglitz et al., 2009, p.12).

Existing Sustainability Indicators

The development of indicators of sustainability has been well underway since the early 1970s (Dimou & Upward, 2010). Based on the work of the Brundtland commission (WCED, 1987) it is generally accepted that there are three dimensions of sustainability: economy/profit, equity/people/society and environment/planet, and that for a society to be sustainable these dimensions must be considered over multiple generations.

At this time there are more than 20 alternatives indicators of sustainability, with varying levels of international, national and Canadian involvement. The SSI1, HPI2 and GPI3 (introduced above) are existing indicators which all capture the three dimensions of sustainability over time.


Benefits of Government Published Sustainability Indicators

The realization of the opportunities and benefits of sustainable development are being hampered by lack of clear government direction (Aghion, Hemous, & Veugelers, 2009) which in turn is hampered by lack of understanding by the citizenry.

The SSI,. HPI and GPI indicators can provide the general public, media and technical stakeholders (business, government, not for profit) with both summary and detailed information which is aligned. This allows goals to be agreed, communicated to and progress measured by all parties.

The beneficial effects of having regularly published sustainable development indicators, including making progress towards aspects of sustainable development, has been explored in the context of OECD countries by Lehtonen (2008) who observed that publication of indicators legitimizes “calls for stronger environmental policies, thereby generating government, social and policy learning”, ultimately resulting in the “mainstreaming [of] sustainable development”.

Recognizing the value to society of sustainability indicators, macro and micro-economic indicators are now being actively designed and implemented around the world. For example, the emergence of “impact investors” who are concerned with triple bottom line results (not only economic profit) has led the Rockefeller Foundation and others to develop and implement sustainability ratings and rankings for organizations (GIIN, 2009). At the national level, most recently the United Kindgom, has announced it will be implementing a “Happiness Index” (BBC, 2010; Williams, 2010). Other countries, notably New Zealand, have been exploring headline indicators of sustainability since 2002, recognizing “we need to know how we are performing economically, sociality and environmentally. Without this information we cannot rationally plan for the future and monitor progress towards any goals we may set. This applies to all levels and dimensions of decision making iin the regional community and ranges across the public and private sectors (Patterson, 2006, p.423).

Preparing a Plan for Defining and Publishing Ontario’s Sustainability Development Indicators

While at the Canadian Federal Government level there is currently scepticism, discussions of the applicability and implementation of such a measure in Canada were considered at a recent conference in Ottawa (Curry, 2010). This conference builds on the significant Canadian past and current involvement in the development of these indicators (Dimou & Upward, 2010).

The selection and implementation of the indicators is still some what controversial complex and hence the mere selection of indicators poses some risk of criticism (El Serafy, 2006).


To mitigate this risk, while preparing a plan to introduce sustainability indicators for Ontario, recommendations made in works on indicator design (Stiglitz et al., 2009), selection (Jollands, 2006; Peet, 2006)and implementation (Lawn, 2006) should be consulted.

Further, to understand, and leverage the positive feedback loops and connections between government policy development and the publication of indicators policy units within ministries may wish to consult the work by Herzi (2006) which discusses the “mobilisation of indicators through their active use within the context of governance”.

Next Steps

Based on the evidence gathered and presented, there are significant benefits to Ontarians of the Government of Ontario publishing measures of sustainability on the same time frame and frequency as other major indicators. Not only will this de-risk the achievement of existing stated public policy objectives, such as green-energy, green house gas emission reduction through improved communication to the general public, but it will also reduce risk for all society members to act in support of these policies. The result over time will be to improve the economic, social and environmental well-being of Ontarians.

It is recommended that the Office of the Premier and the Cabinet initiate a planning activity, involving key public servants (from all ministries), leading academics (both classical and ecological economists, along with other social and natural scientists), business people, representatives of non-governmental organizations and citizens. This activity should result in a comprehensive recommendation and plan to implement sustainability indicators in Ontario within a defined period of time, ideally less than 12 months. The aim should be the publication of the first indicators 6-12 months after the plan is approved by Cabinet.

References

Aghion, P., Hemous, D. & Veugelers, R. (2009). Kick-starting the green innovation machine. Retrieved 11/15/2010, 2010, from http://www.voxeu.org/index.php?q=node/4352

BBC. (2010). Government 'planning to measure people's happiness'. Retrieved 12/1/2010, 2010, from http://www.bbc.co.uk/news/uk-politics-11756049

Binswanger, M. (2006). Why does income growth fail to make us happier? Journal of Socio-Economics, 35(2), 366-381. doi:10.1016/j.socec.2005.11.040

Curry, B. (2010, Wed, 1 Dec). Getting a handle on happiness. The Globe and Mail,


Dimou, M., & Upward, A. (2010). Issue Seminar: Accounting for the Sustainability of the Canadian Economy. Unpublished manuscript.

El Serafy, S. (2006). The economic rationale for green accounting. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 55-77). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

GIIN. (2009). Global Impact Investing Network: History. Retrieved 11/17/2010, 2010, from http://www.thegiin.org/cgi-bin/iowa/aboutus/history/index.html

Hezri, A. A., & Dovers, S. R. (2006). Sustainability indicators, policy and governance: Issues for ecological economics. Ecological Economics, 60(1), 86-99. doi:10.1016/j.ecolecon.2005.11.019

Jollands, N. (2006). Getting the most out of eco-efficiency indicators for policy. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 317-343). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Kuznets, S. (1934). National Income, 1929-1932 Washington, D.C., U.S.A;: United States Congress.

Lawn, P. A. (2006). Introduction. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 3-12). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Lawn, P. A. (2006). Eco-efficiency indicators applied to Australia and their policy revelvence. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 344-375). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Layard, R. (2003). Happiness: has social science got a clue?. London, United Kingdom: London School of Economics, Centre for Economic Performance.

Layard, R. (2006). Happiness and Public Policy: a Challenge to the Profession*. The Economic Journal, 116(510), C24-C33. doi:10.1111/j.1468-0297.2006.01073.x

Lehtonen, M. (2008). Mainstreaming sustainable development in the OECD through indicators and peer reviews. Sustainable Development, 16(4), 241-250. doi:10.1002/sd.378

Lintott, J. (1998). Beyond the economics of more: the place of consumption in ecological economics. Ecological Economics, 25(3), 239-248. doi:10.1016/S0921-8009(97)00042-6


Lintott, J. (2006). Environmental accounting and policy making. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 78-95). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Patterson, M. (2006). Selecting headline indicators for tracking progress to sustainability in a nation state. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 421-448). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Peet, J. (2006). Sustainable development indicators and human needs. In P. A. Lawn (Ed.), Sustainable development indicators in ecological economics (pp. 399-420). Cheltenham, UK ; Northhampton, MA : Edward Elgar.

Stiglitz, J. E., Sen, A., & Fitoussi, J. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress Paris, France: Commission on the Measurement of Economic Performance and Social Progress.

WCED. (1987). Report of the World Commission on Environment and Development: Our Common Future (The Brundtland Commission Report). Retrieved 11/15/2010, 2010, from http://www.un-documents.net/wced-ocf.htm

Williams, J. (2010). Britain announces a happiness index. Retrieved 12/1/2010, 2010, from http://makewealthhistory.org/2010/11/16/britain-announces-a-happiness-index/

Victor, P. A. (2008). Managing without growth : slower by design, not disaster. Cheltenham, UK; Northampton, MA: Edward Elgar.

Notes

1 http://www.sustainablesocietyindex.com/;

http://www.wikiprogress.org/index.php/Sustainable_Society_Index;

2 http://www.happyplanetindex.org

3 http://en.wikipedia.org/wiki/Genuine_Progress_Indicator

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