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					the Stiglitz Commission
  a short presentation

        Louis de Gimel, Insee

for measuring sustainable development
      Geneva 23-24 september 2009
The Stiglitz Commission: Measurement of
economic performance and social progress
1.Measurement of sustainable devpt
1.1 two main results/recommandations
1.2 Quantifying sustainability : the main stumbling blocks
      Literature, appropriate prices, from theory to practice
2. Others fields: main recommendations
II.1 GT1 classic GDP issues
II.2 GT2 quality of life, well-being:
     Objective and subjective dimensions
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      1.1 SD : Two main results
   A clear distinction between
    current well-being and sustainability
     Sustainability has to deal with the future
   See problems with a composite indicator
    combining the two aspects
   Necessity of a sub-dashboard about sustainability
    inside large dashboards.

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        1.1 SD : Two main results
   A quite good convergence
             with the TF SD 2008 report
   Theoretical roots for the wealth approach
     Indicators interpretable as variations of “stocks”
     Consistent with the Brundtland definition
   A monetary index but only for economic aspects
    of sustainability (see rec 11)
   Need for a separate set of well chosen (and limited)
    environmental physical indicators (see rec 12)
    Measuring the proximity to dangerous level of damage
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    1.2 Quantifying Sustainability
Across the report, analysis of the main productions
in the SD measurement literature (with pros and cons)
-Dashboards :Useful but ...heterogeneity
-Composite indices : Confusion, arbitrary weights
-Adjusted GDP’s (green GDP): for what purpose ?
Only current consumption without env. impoversishment
-Footprints: an env. indicator and not a SD index
 Rather a carbon footprint than “the ecological footprint”
-ANS : what is counted and with what kind of prices ?
what about global goods and global nature of sustainability?

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     1.2 Quantifying Sustainability
                the crumbling blocks
A purpose: clarifying the debate
         to avoid the existing confusion
What do we want to measure ?
How should we do it under ideal conditions ?
Why is it so difficult in practice ?
-Sustainability = transmitting a « sufficient » stock of resources
                to next periods or next cohorts
- How much is « sufficient » ? dw >0
- Summarising SD in one number: is it realistic ?

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      1.2 the crumbling blocks:
      looking for appropriate prices
In theory, 3 steps in the « extended wealth » framework

   Step 1 : Identifying the types of relevant assets
ANS list and..... social capital, a larger set of environmental assets ?

   Step 2 : measure net changes in stocks for each asset
   Step 3 : weight them with appropriate prices
If current asset prices do not reveal all futures preferences/ scarcities
calculate “accounting prices” based on modelling
 Eco-environmental developments

 How thy affect well-being

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     1.2 the crumbling blocks:
     In theory and .... in practice (1)
It works in theory
see simulations in the technical report
But it needs prefect predictions

And the future is fundamentally uncertain
See debates about long term env. changes:
related to beliefs about future eco-env scenarios.
Possibility to use scenarios
               and to compile stress tests but
how to quantify extreme valuations of env. assets?

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      1.2 the crumbling blocks:
      In theory and .... in practice (2)
   Uncertainty is also normative:
                       What is to be sustained?
Will the future generations
       be more sensitive than us to env. goods scarcity ?
What kind of aggregation for the individual preferences?
   The global dimension
Difference between national and global sustainability
           when damages are unequally distributed
 A need for an index about global responsibility

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      1.2 the crumbling blocks:
      In theory and .... in practice (3)
More insights
Theoretically compatibility with strong sustainability view
If prices of critical natural assets are correctly predicted
  Interest for works about human capital evaluation (appendix 2)
 How much does the C02 emission evaluation count for ?

   Distinction between sustainability and policy advice (append3)
    (with cost-benefit analysis see Stern report)
NB: In that case
 the discount rate value doesn’t change sustainability
 but only how much in advance it is anticipated.

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        2 Other main messages of the
        whole Commission
    Better measures of economic
    performance in a complex economy
   Capturing quality change: a challenge
    Services provided by governments (collective and
    individual ones) and their productivity
   To shift emphasis of the measurement
     from production to people’s well-being
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         2 Other main messages
             GT1 classic GDP issues
    For well being,
     income and consumption rather than GDP
   Emphasise the household perspective
    In kind services provided by government
    An effort for reconciliation between sources
   Income and consumption jointly with wealth
    Availability of balance sheets for countries
   Give more prominence to distributions (income,
    wealth..): Median, Bottom and top of distributions, links
   Include measures of non market activities
Time spent surveys, Accounts of household activities, amount of leisure

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     2 Other main messages
     GT2: Quality of life, Well being (1)
A very large program with
Objective and subjective dimensions of well being
   Improve measures
    of objective conditions and capabilities
    Material living standards, health, education, personal activities
    including work, factors shaping personal and economic security,
     environnemental conditions,social connections, political voice
    Inequalities in comprehensive way
    Across people, social groups, genders, generations
   Links between various quality of life domains
    At the individual level
    With dedicated surveys used when designing policies
     Attention to cumulative effects and disadvantaged people
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     2 Other main messages
     GT2: Quality of life, Well being (2)
Other recommendations for statistical offices:
   Provide data needed for aggregated indexes
   Incorporate in surveys
    subjective evaluation questions
    .... with objective ones and activities
    Capture people life’s evaluation, hedonic experiences,

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              je vous remercie de votre attention
                         Louis de Gimel, Insee
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