Seventy-some years later, however, the GDP' s faith in unbridled growth and efficiency is not as useful. Our curren worldwide economic and environmental crises suggest that we need a new definition of progress and a new way of accounting for the costs generated by economic activity. For instance, under the GDP, environmental pollution ends up being a positive because it creates economic activity - and is even counted positively twice: once when it's created and again when it's cleaned up. And the result ofthat pollution, which is often illness such as cancer, also ends up on the plus side of the ledger because it, too, creates economic activity. Shouldn't a true set of indicators include a way to debit the accounts for the cost of degradation of wetlands and the depletion of the ozone layer and oil? Shouldn't it adjust for factors such as the value of household and volunteer work, which are invisible in the GDP because no money changes hands?
It’s Not About Growth Alternative Economic Indicators Measure the Quality of Life by Wendy Priesnitz T raditionally, a country’s economic health and well-being is measured by something called the Gross Domestic activity. Shouldn’t a true set of indicators include a way to debit the accounts for the cost of degradation of wetlands and nomic, health, social and environmental factors. In effect, the GDP could be seen as gross profit of a company and the GPI Product (GDP) or its cousin, the Gross the depletion of the ozone layer and oil? as its net profit – or revenue minus the National Product (GNP). The media ea- Shouldn’t it adjust for factors such as the costs incurred. If the costs associated gerly report the number on a monthly ba- value of household and volunteer work, with our way of life were to equal the fi- sis and its rise or fall is used as an which are invisible in the GDP because nancial gains, the GPI would be zero. indicator of how well things are pro- no money changes hands? A number of countries have used the gressing or not. A recession, for instance, A think tank called Redefining Prog- GPI to recalculate their GDP. And in is defined as two consecutive quarters of ress, founded in California in 1994, puts Canada, Nova Scotia and Alberta have negative GDP growth. it this way: “We believe that progress is pioneered its use provincially. In 2000, But GDP is really just a measure of not measured by the quantity of goods the National Roundtable on the Environ- national spending with no distinctions we consume, how fast our economy is ment and the Economy began a three- made between transactions that add to growing or how much financial wealth is year multi-stakeholder program aimed at well-being and those that diminish it. As being amassed. We believe progress is developing a small set of indicators to long as money changes hands, the GDP measured by how well we equitably dis- track whether Canada’s economic activi- increases. tribute wealth, income and access to cul- ties threatened the way of life for future The fact that this indicator is based tural amenities; diversify and stabilize generations. The Environment and Sus- upon economic growth is not surprising. our economic base; protect and restore tainable Development Indicators (E
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