Sunday, February 26, 2012

GDP 'not sufficient' for measuring economic wealth

Maina Waruru in A group of the world's top environmental scientists have backed calls for replacing the gross domestic product (GDP) as a sole measure of a nation's economic wealth with more inclusive indicators that would consider the impact of economic growth on the well-being of the environment.

Relying only on GDP ignores important aspects of a nation's well-being such as sustainable development and threats to the environment, they said in a report presented at the UN Environment Programme's (UNEP) 12th special session of the governing council in Nairobi, Kenya, this week (20–22 February). The report, 'Environment and Development Challenges: The Imperative to Act', was prepared by laureates of the Blue Planet Prize, known unofficially as the Nobel prize for the environment.

"Governments should recognise the serious limitations of GDP as a measure of economic growth and complement it with measures of the five forms of capital, built (produced); natural; human; social; and institutional/financial capital," the report said. This would be "a measure of wealth that integrates economic, social and environmental dimensions, and is a better method for determining a country's productive potential".

Bob Watson, lead author of the report, told SciDev.Net: "When we capture a people's wealth by their ability to buy drugs to fight diseases caused by air pollution in the process of exploiting natural resources in order to create wealth, that cannot be said to a true measure of wealth."

"Wealth measurement must be more sophisticated … It must go beyond GDP and include ecosystems services, and the quality of water, air and food produced in a given area," he added....

The Garden of Eden by Hieronymous Bosch

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