Recent headlines such as “A Measure Remodeled” (Financial Times) and “Time to Order a New Economic Order” (the Huffington Post) reflect a growing call to reform GDP, our standard measure of economic performance. On Huffington Post, a popular political news Web site, an article read: “Most, if not all, ministers of finance and conventional economists don’t account for how the planet works, or even that the economy exists on a finite planet.”
Next month, a yearlong study to find indicators that could complement or improve upon GDP will result in a final report that addresses these very pressing issues.
The Commission on the Measurement of Economic Performance and Social Progress— created by French President Nicolas Sarkozy and chaired by Nobel Prize winning-economist Professor Joseph E. Stiglitz of Columbia University – set out to find a more holistic and comprehensive approach toward gauging a country’s success. Among the report’s preliminary findings was an endorsement of the Ecological Footprint.
The need to consider the environment in policy indicators was echoed in a recent article in the Financial Times. “Over the past 20 years, economists have devoted time and effort to inventing ways of measuring environmental degradation and economic sustainability. It is far easier to calculate such measures when resources … have a market value; it is a lot trickier when common goods, such as air and water, are regarded as free.”
Perhaps New York Times columnist Thomas Friedman said it best in his recent commentary. Regarding the economic crisis, he asks: “What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall – when Mother nature and the market both said: No more.”
Can we continue to attempt to bolster 2 conflicting systems - economies cannot survive without growth (consumerism) and our environment is continuing to be degraded by humanities quest for more. Will we have to resort to mass sterilization and living in caves to protect what precious environmental resources we have left? If we have ‘hit the wall’ so to speak we cannot continue to use and abuse the planet as we have done since the industrial revolution. What possibilities are there for individuals, communities, business, society to adapt our thinking and economic structures to deal with the new necessity of “less is better” when we have been indoctrinated to ‘keep up with the Jones’es”?