Canadian sustainability indicators (dimou, upward) (final v3.3)

ENVS5164 Environmental and Ecological Economics , Marialena Dimou #208067951, Antony Upward #211135423

Accounting for the Sustainability of the Canadian Economy

Week 7: Issue Seminar

Nov 2, 2010ES/ENVS 5164

(Please Review Speakers Notes)

2ENVS5164 Environmental and Ecological Economics , Marialena Dimou, Antony Upward 2

Approach

1. For Canada…what is the meaning of:• Sustainability• Economy• Accounting / Measurement

2. What / how to measure sustainability?• What measures exist?• What are the current gaps?

• i.e. how sustainable is Canada today?

3. Why are we still using GDP?4. Solutions and Conclusions5. Questions

3ENVS5164 Environmental and Ecological Economics , Marialena Dimou, Antony Upward

What is ‘sustainability’?

• What does ‘sustainability’ mean to you?


Strong Sustainability• Weak vs. Strong Sustainability

• Beyond Strong Sustainability? – Non-anthropocentric ethics and practices, equality among species,

reduction of human population... (Thrasymachus' 'might over right' or injustice is justice)

• Our View:– Humans need to live within nature's carrying capacity over-time, or

else... – Four dimensions must be accounted for:

• Environment• Equity• Economics• Time – Inter-generationality


Defining Strong Sustainability• “Bruntland”* definition:

– A sustainable development is development– That meets the needs of the present generation, – That does not compromise the ability of future generations to meet their own

needs• Weak and oxymoronic

• Our View– “Extended” Brundtland† adds:

– In which each human being has the opportunity to develop itself in freedom, within a well-balanced society and in harmony with its surroundings.

• Stronger…but still problematic• Or

– Ehrenfeld‡ who starts from a different place:– The possibility that human and other life will flourish on the planet forever

• Multi-systemic (environment, economy, equity), inter-generational, aspirational / inspirational?

* United Nations General Assembly of the Report of the World Commission on Environment and Development (the Brundtland Commission) “Our Common Future”, 1987

† From Sustainable Society Index (http://www.wikiprogress.org/index.php/Sustainable_Society_Index#History)‡ Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our consumer culture. New Haven: Yale

University Press.

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


What is the Economy?

• From current common usage– i.e. the monetary / fiscal view of society

• Our view…from its etymological roots – i.e. "house hold management"

• Presume includes all issues pertaining to the objective of the household - i.e. intergenerational flourishing of its members and the environment that supports its members


What is Measurement (aka Accounting) in this Context?

• Early approaches were purely economic, i.e. GDP and criticised as such:– Simon Kuznets (1934) “...the welfare of a nation can, therefore, scarcely be

inferred from a measure of national income...”

• Later approaches add the idea of welfare / happiness– Subjective measure, albeit quantified in economic terms– Economists equate happiness to utility, i.e. revealed preference

• Ecological economics– Full integration of environment, equity and economy over time– Debate about if / how to quantify all three in economic terms

• Our View:– Balanced measurements of all three over time vital– Economic valuations of

• Nature not as precise as biophysical measurements, though latter remains complex and uncertain

• Equity add a layer of complexity to an already inexact science


Measurement…Bad News…

• Measuring is hard – Getting consistent and reliable data is hard

• People argue about “right” / “best” ways

• Scientific knowledge* incomplete• What to measure• What level a measure have for sustainability

– Although we have some good ideas

* Natural, Biological, Systems, Social, Economic


Measurement…Good News…• A lot of work by a lot of people

– Many based on Agenda 21 from Rio UN Earth Summit 1992

• Global– United Nations

• Indicators of Sustainable Development 96 indicators in 14 groups covering all three dimensions of sustainability

• Statistics Division Handbook “brings together economic and environmental information in a common framework to measure the contribution of the environment to the economy and the impact of the economy on the environment “

– World Bank’s “World Development Indicators”• Database of 700 indicators of “the progress of development”, updated annually for 200 countries• 54 indicators available for Canada across all three dimensions of sustainability. • No single index…yet…plans announced last week

– WikiProgress / Sustainable Society Index• 6 themes covering all three dimensions

• Canada

– Lots of criticism of GDP – Lots of work on non-Economic measures – Fewer trying to integrate economic and non-economic– Bias of current Federal Government is evident in (lack of) progress in last 5 years


Open Spreadsheet for Details – 2nd Tab

Ranking and Discussion of Sustainability Indexes*

1 Sustainable Society Index (SSI)

Canadian Index of Wellbeing (CIW)

3 Happy Planet Index (HPI)

4 Genuine Progress Indicator (GPI)

5 Index of Economic Well Being

6 Genuine Savings Rate

7 Weighted Index of Social Progress (WSIP)

8 Gross National Happiness (GNH)

9 Ecological Footprint

10 Environmental Performance Indicator (EPI)

11 Canadian Environmental Sustainability Indicators (CESI)

12 ESDI Canada (Development of CESI)

13 GDP (at PPP)

14 Net Domestic Product

15 Economic Well Being

16 Human Development Index (HDI)

* Highly subjective: sorted by intergenerational, environment, social/equity

Review of Sustainability Indicies


What Are the Gaps?

• To have a gap we need to have a target order to assess the current state!– Even if it just “more is better” (i.e. GDP)

• None of the measurement schemes appear to put much weight on proposing values of their index or underlying measures which would, if achieved, lead to a sustainable world


Our Analysis – Why Are We still Using GDP?

SpecificGoals

Inter-GenerationalSustainability

“Biosphere Flourishing”

Result: The combination of the wide choice of measures (each backed

by special interest groups), and the delays in the loops lead us back to the measure we know which also happens to be “easy” to calculate

and understand - GDP

RTake Measurements

+ UnderstandGaps to Goals

+

Plan Actions to Close Gaps

+ExecutePlan to

Close Gaps

+

-

-

Get“Scared”

+

Criticise Measures

+

Develop(more)

Measures+

B+

ChooseMeasures To Pay

Attention To (Selectively!)

+

-B

R GDP Gets Measured & Paid

Attention To

Increase GDP

Based loosely on Herzi (2006)


Our recommendation to Canada

• Pick a measure– Picking one is more important than which one!– Pick one that includes: intergenerational, includes

environment, social and economic dimensions• Sustainable Society Index (SSI)• Happy Planet Index (HPI)• Genuine Progress Indicator (GPI)

• Necessary but not sufficient– Set goals / policy objectives based on the measures

• Will require move to steady state via de-growth– Implement the policy, measure, improve over time


Questions


Bibliography• See spreadsheet for references to sources for Indexes reviewed• Bartelmus, Peter (2010). "The Use and Usefulness of Sustainability Economics". Ecological

Economics 69 2053–2055.• Birney, Anna, Charlotte Salazar, and Jen Morgan (2008) “How Do We Enable Systems Change

for a One Planet Future?” The Journal of Corporate Citizens no.30, p. 23-36.• Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our

consumer culture. New Haven: Yale University Press.• Hezri, Adnan A.; Dovers, Stephen R. “Sustainability indicators, policy and governance:• Issues for ecological economics” Ecological Economics, 60, p.86-99• Kuznets, Simon, 1934. "National Income, 1929-1932". 73rd US Congress, 2d session, Senate

document no. 124, page 7. http://library.bea.gov/u?/SOD,888 • Kuznets, Simon. "How To Judge Quality". The New Republic, October 20, 1962 • Nielson, H.R. (2010). “The joint discourse 'reflexive sustainable development': From weak

towards strong sustainable development”. Ecological Economics 69, 495- 501.• Pearce, David et al. (1989). “Blueprint for a Green Economy”. London, Earthscan p.1-27.• Rees, William. (1997). “Let's just assume we're sustainable”. Dollars and Sense 211 May-June.• Smith, Joseph Wayne and Gary Sauer-Thompson (1998). “Civilization's Wake: Ecology,• Economics and the Roots of Environmental Destruction and Neglect”. Population and

Environment: A Journal of Interdisciplinary Studies 19 no.6, July.• Zadek, S. (2004). “The civil corporation: the new economy of social citizenship”. Earthscan,

London

http://library.bea.gov/u?/SOD,888

Canadian sustainability indicators (dimou, upward) (final v3.3)

Economy & Finance

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