Measuring Real Wealth

in New Zealand

David Kettle, Anew NZ Progress Indicator

Action Group2nd International Conference on

Sustainability Engineering and Science, February 2007

•Introduction

•Current Measures of Progress (GDP)

•Genuine Progress Indicators (GPI)

•Other Wellbeing Indicator Work

•Going Forward in New Zealand

OUTLINE

INTRODUCTION• Significant Current Indicators Work

• Challenge - Integrate and comparability, - Misuse of GDP

• Key question – “How can we create an integrated system of

indicators …….. global comparability………… combines present well-being with long term sustainability………. while challenging the misuse of GDP as being the basic indicator of societal well-being?”

Why we need measures to complement GDP (Gross Domestic Product)

• Every expenditure as addition to well-being (e.g. cyclones, war, etc.)

• Ignores functions that don’t involve money (e.g. volunteers, open spaces, trees etc.)

• No regard for future (e.g. depletion of natural resources as current income instead of liquidation of an asset)

• Ignores distribution of income (e.g. the gap between the haves and have-nots)

Average income & happiness in the US, 1957-2002

Things of personal importance to Kiwi’s

Growth & Innovation Advisory Council 2004

0 is not important and 10 is very important

100%

Genuine Progress Indicators (Example: Nova Scotia GPI, Ron Colman)

Time Use Economic Value of Civic and

Voluntary Work Economic Value of Unpaid

Housework and Child Care Work Hours Value of Leisure Time

Environmental Quality Greenhouse Gas Emissions Sustainable Transportation Ecological Footprint Analysis Air Quality Water Quality Solid Waste

Natural Capital Soils and Agriculture Forests Marine Environment/Fisheries Energy

Socio-economic Income Distribution Debt, External Borrowing, and

Capital Movements Valuations of Durability Composite Livelihood Security Index

Social Capital Population Health Educational Attainment Costs of Crime Human Freedom Index

Canadian Index of Wellbeing (CIW)• Living Standards – gap between rich & poor, food security,

affordable housing

• Time Allocation – balance between paid work, unpaid work & free time

• Healthy Populations – self-rated health, infant mortality, rates of suicide

• Ecosystem Health – air & water quality, healthy forests, soils

• Educated Populace – literacy, numeracy

• Community Vitality – safe communities, diversity, culture, arts

• Civic Engagement – meaningful participation

The 6 Capitals of Wellbeing

1. Produced (Built) Capital – machinery, equipment

2. Financial Capital – loans, financial savings

3. Natural Capital – renewable and non-renewable natural resources

4. Social Capital – values and understanding within and between groups

5. Human Capital – knowledge skills through life-long learning

6. Cultural Capital – traditions and behaviours

At a Global Level• United Nations Statistics Division – City Groups on

Statistical Methodologies (http://unstats.un.org/unsd/methods/citygroup/index.htm).

• The European Social Survey (http://ess.nsd.uib.no).

• OECD 2006 Factbook (www.SourceOECD.org/factbook).

• June, 2006 Milan OECD ‘post conference’ on a ‘National Index of Wellbeing’ - developing a national index of wellbeing model to be presented at:– OECD Global Project – Measuring the Progress of

Societies, Second OECD World Forum on Statistics, Knowledge and Policy, 27-30 June 2007, Instanbul, Turkey

Existing good work in NZ

• Quality of life in our cities; now 12 largest

• Excellent MSD social reports

• Marilyn Waring’s pioneering work; in assoc. with Dr. Colman

• Local Gov. Act 2002; LTCCP’s

A Pathway for Going Forward in NZ

1. Support Local and Regional Governments in developing wellbeing indicators

2. Resource Kit of best practice and “standardisation”

3. Research and Resourcing

4. Develop international comparability model

5. New Zealand Measures of Wellbeing

The AnewNZ Initiative

“A National Index of Progress and Wellbeing, Developing a Model for Global Comparability”, November 2007

Six to Eight Countries, including OECD

Demonstrate viability of comparable setAgree on wording and data bases

www.anewnz.org.nz

• David Kettle – dbkettlelimited@slingshot.co.nz

• Dave Breuer

• Chris Ferkins

• Gary Russell

• John Shaw

• Ray Skinner

• Antony Vallyon