4 ways to move beyond GDP and measure true wellbeing
Environment — di Valentina Neri
Does gross domestic product equal sustainable development? Unfortunately not. Here is a roundup of attempts to go beyond GDP — including one made in Italy.
4 ways to move beyond GDP and measure true wellbeing
Does gross domestic product equal sustainable development? Unfortunately not. Here is a roundup of attempts to go beyond GDP — including one made in Italy.
Going beyond GDP: Robert Kennedy was already saying it in 1968, declaring that it "measures everything except that which makes life worth living". More than forty years on, many different solutions have been proposed around the world to find an alternative economic development indicator to gross domestic product.
Why we need to go beyond GDP
According to the official definition from Borsa Italiana, gross domestic product (GDP) is the total value of final goods and services produced within a country over a given period of time (generally one year) by economic operators, both resident and non-resident. It is therefore commonly said to correspond to the value of a state's wealth or wellbeing. But this definition, which is straightforward in itself, is burdened by some fundamental weaknesses. First of all, it speaks only of monetary transactions, excluding the entire world of free exchange, associations and volunteering. As if that were not enough, it lumps every kind of economic activity together in the same pot. The opening of a coal-fired power plant, or an epidemic that forces the production and purchase of tonnes of medicines, are both factors that technically make GDP grow. It is clear, however, that true wellbeing is something else entirely.
The Bes, a new index made in Italy
Benessere equo e sostenibile (Fair and Sustainable Wellbeing) is the result of the work carried out by Istat and Cnel to go beyond GDP. The first annual report was published in March 2013 and the 2016 update was released last December. The Bes is determined on the basis of twelve dimensions:
- Health
- Education and training
- Work and work-life balance
- Economic wellbeing
- Social relationships
- Politics and institutions
- Security
- Subjective wellbeing
- Landscape and cultural heritage
- Environment
- Research and innovation
- Quality of services.
Each of these contains a series of indicators (134 in total). For health, for example, smoking, sedentary behaviour and excess weight are assessed, among others; for education and training, the percentages of Neet (young people neither in employment nor in education or training) and school dropout; for the environment, the availability of urban green spaces, the presence of contaminated areas, and so on.
Canada and the United Kingdom grappling with wellbeing indicators
Two other interesting experiments aimed at going beyond GDP come from opposite sides of the Atlantic.
One originates in Canada and goes by the name of the Ciw, an acronym for the Canadian Index of Wellbeing. The 2016 edition highlights the fact that, with the global economic crisis, both GDP and the wellbeing of Canadians suffered a sharp decline. The former, however, appears to be recovering much more quickly than the latter.
In the United Kingdom, meanwhile, the Office for National Statistics has taken on the task of measuring the nation's wellbeing, which has been in steady improvement since 2012. This is the result of four indicators: life satisfaction, happiness, awareness of the meaning of one's activities, and anxiety.
The Ecological Footprint Index
The NGO Global Footprint Network has taken on the task of drawing up a true planetary balance sheet. On one side of the scales sit the natural resources that the Earth is able to make available; on the other sit those that we use. The result is the Ecological Footprint Index. It can be calculated for the entire population of the planet, but also for a country, for a city, and even for a single individual or a company.
It is no simple task. First, biologically productive land and sea areas must be estimated. Then it is necessary to establish how "resource-hungry" each human activity is, based on public policies adopted, waste disposal systems, available technologies, and so on. To reach this point, in 2016 it was necessary to take into account 200,000 official sources.
The results, unfortunately, are discouraging. This year, 8 August was Overshoot Day, the day on which we officially exhausted all the resources the planet had to offer us. A sad milestone that, year after year, arrives ever earlier.