Time to Go Beyond GDP

The European Commission is to present a comprehensive strategy to moveBeyond GDP. Gross Domestic Product, the most widely used economicindicator, measures only the quantity but not the quality, ordesirability, of a nation’s economic acti-vity. On its own it is notenough. It is out of date.

Jose Manuel Barroso, President ofthe European Commission, told a high level conference at the EuropeanParliament in Brussels: ‘We cannot face the challenges of the futurewith the tools of the past.’

New economists have long advocatedindicators that can distinguish between good and bad economic activityand the effect of that activity on people and the environment. Now theEuropean Com-mission agrees: ‘We need to measure what matters,’ saidStavros Dimas, the Union’s Environment Commissioner. He promised: ‘Nextyear we’ll present a concrete roadmap for action.’

Theannouncement came at a Conference, Beyond GDP: measuring progress, truewealth and the well being of nations, hosted by the EuropeanCommission, the Club of Rome, the Organisation for Eco-nomicCo-operation & Development and WWF ñ the Worldwide Fund for Nature.

Itwas agreed that moving towards a low carbon economy, preservingbiodi-versity, promoting the efficient use of resources and achievingsocial cohesion are today, every bit as important as economic growth.

‘Itis not enough for us to talk about freedom, climate change, health,security and the environment,’ said President Barrosa. ‘We need widelyaccepted tools that show progress in these fields. The EU is fullycommitted to integrating non-economic factors into policy-making by theyear 2010.

‘The special importance of this system is that itwould include stock-taking of natural resources and human and socialcapital, rather than just the use of these resources. The system wouldalso focus on the contribution eco-systems make to our welfare.’

HisEminence Chief Emeka Anyaoku, President of WWF, said: ’12 years ago, wehosted a similar conference entitled Taking Nature into Account. Thecall is the same as it was 12 years ago ñ only more urgent. We need tomove beyond conventional economic accounting. We need new ways torecord progress, to set wiser paths for development. Societies cannotcontinue to operate as if the planet were business in liquidation. Wecannot call something income that in reality is resource depletion.’

‘Thatprogress can only be measured with suitable indicators,’ said PresidentJose Manuel Barroso. ‘So, it is time to go beyond the tools developedfor the very different world of the 1930s. It is time to go beyond GDP.’
HazelHenderson, who was represent-ing the Club of Rome, said: ‘This is ahuge step forward. It looks as if some-thing is finally going tohappen.’

Hazel Henderson has been calling for an alternative GDPsince the 1960s and has prepared her own set of alternative indicatorswith the Calvert Group.

She explained how important it is topush the economists and statisticians along. ‘We can do it in theprivate sector. We have triple bottom line accounting already, whichtakes account of environ-mental and social factors. If economists andstatisticians can do it at the level of companies there is no reason atall why they can’t do it at the level of GDP.’

‘Resistance,’says Hazel Henderson, ‘comes from the level of trade and fi-nanceindustries who support the special interests that benefit from beingable to externalise’ social and environmental costs from nationalaccounts.’ A survey carried out by Globescan supported all the aims ofthe conference and found a huge majority of people worldwide in favourof going beyond GDP.

Contact: Institute for International
and European Environmental Policy
Pfalzburger Str. 43/44,
10717 Berlin, Germany
Tel: +49 30 86880 0
Website: www.beyond-gdp.eu

Photo: © Jose Manuel Barroso, President of the European Commission

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