[MCN] News the young can use : GDP [ economic growth ] Is Not a Measure of Human Well-Being

[Lance Olsen]

Harvard Business Review    OCTOBER 04, 2019
GDP Is Not a Measure of Human Well-Being
By Amit Kapoor <https://hbr.org/search?term=amit%20kapoor> Bibek Debroy <https://hbr.org/search?term=bibek%20debroy>

https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-being <https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-being>

1st 3 paragraphs

Economic growth has raised living standards around the world. However, modern economies have lost sight of the fact that the standard metric of economic growth, gross domestic product (GDP), merely measures the size of a nation’s economy and doesn’t reflect a nation’s welfare. Yet policymakers and economists often treat GDP, or GDP per capita in some cases, as an all-encompassing unit to signify a nation’s development, combining its economic prosperity and societal well-being. As a result, policies that result in economic growth are seen to be beneficial for society.

We know now that the story is not so simple – that focusing exclusively on GDP and economic gain to measure development ignores the negative effects of economic growth on society, such as climate change and income inequality. It’s time to acknowledge the limitations of GDP and expand our measure development so that it takes into account a society’s quality of life.

A number of countries are starting to do this. India, for instance, where we both work advising the government, is developing an Ease of Living Index, which measures quality of life, economic ability and sustainability.

From mid-article

For example, GDP takes a positive count of the cars we produce but does not account for the emissions they generate; it adds the value of the sugar-laced beverages we sell but fails to subtract the health problems they cause; it includes the value of building new cities but does not discount for the vital forests they replace. As Robert Kennedy put it in his famous election speech in 1968, “it [GDP] measures everything in short, except that which makes life worthwhile.”

Environmental degradation is a significant externality that the measure of GDP has failed to reflect. The production of more goods adds to an economy’s GDP irrespective of the environmental damage suffered because of it. So, according to GDP, a country like India is considered to be on the growth path, even though Delhi’s winters are increasingly filled with smog and Bengaluru’s lakes are more prone to fires. Modern economies need a better measure of welfare that takes these externalities into account to obtain a truer reflection of development. Broadening the scope of assessment to include externalities would help in creating a policy focus on addressing them.
https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-being <https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-being>
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IPCC
“Limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society.” First sentence of IPPC Special Report on 1.5C Summary for Policy Makers.

<<https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/ <https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-global-warming-of-1-5c-approved-by-governments/>>>

Greta Thunberg
"So if we are to stay below the 1.5 degrees of warming limits …, we need to change almost everything.”

"At meetings like these, you love to listen to entrepreneurs' new ideas, new inventions. But when it comes to the climate crisis, the time for those magic new inventions has just about come and gone.

"And even though we need to embrace every bit of new clean technology, we can no longer look away from the obvious fact that we also need to change our behaviour—and some more than others.

"Everyone and everything needs to change. But the bigger your platform, the bigger your responsibility.

"The bigger your carbon footprint, the bigger your moral duty. To make the change required, we need role models and leaders—people like you.

"I'm certain that most of you sitting here will have the courage, the wisdom, and the common sense to take a few steps back. To see the full picture. 

To make the sacrifices that are necessary and to become the leaders we need you to be.

"The question is: will you do it on time? Future generations are counting on you. Don't let us down.

"Thank you."

<<https://www.straight.com/news/1258421/video-swedish-teenager-greta-thunberg-urges-wealthy-people-stop-stealing-others-carbon <https://www.straight.com/news/1258421/video-swedish-teenager-greta-thunberg-urges-wealthy-people-stop-stealing-others-carbon>>>



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