Beyond GDP: Experts preview ‘Inclusive Wealth’ index at Planet under Pressure conference

Earth System Science Partnership, Paris

28-Mar-2012

Brazil and India pay a high price for rapid economic growth, according to experts speaking at a major international meeting in London, Planet Under Pressure.

Between 1990 and 2008, the wealth of these two countries as measured by GDP per capita rose 34% and 120% respectively. But a myopic focus on economic capital is flawed, scientists and economists at the conference argue. Natural capital, the sum of a country’s assets, from forests to fossil fuels and minerals, declined 46% in Brazil and 31% in India, according to a new “Inclusive Wealth Indicator” designed to augment GDP as a measure of economic progress.

When measures of natural, human and manufactured capital are considered together to obtain a more comprehensive value, Brazil’s “Inclusive Wealth” rose just 3% and India’s rose 9% over that time.

“The work on Brazil and India illustrates why Gross Domestic Product is inadequate and misleading as an index of economic progress from a long-term perspective,” says Professor Anantha Duraiappah, Executive Director of UNU-IHDP.

“A country could completely exhaust all its natural resources while posting positive GDP growth. We need an indicator that estimates the wealth of nations – natural, human and manufactured and ideally even the social and ecological constituents of human well-being.”

The first Inclusive Wealth Report, to debut in full at a joint UNU-IHDP and United Nations Environment Programme event at June’s UN “Rio+20” summit in Brazil, will describe the “inclusive wealth” of 20 nations: Australia, Brazil, Canada, Chile, China, Colombia, Ecuador, France, Germany, India, Japan, Kenya, Nigeria, Norway, the Russian Federation, Saudi Arabia, South Africa, USA, United Kingdom and Venezuela. The 20 nations featured in the report represent 72% of world GDP and 56% of global population.

Authored by 17 specialists from the UK, USA, Chile, Malaysia, India, Germany and Australia, the Inclusive Wealth Indicator is undertaken by UNU-IHDP with UNEP support and in collaboration with the UN-Water Decade Programme on Capacity Development (UNW-DPC) and the Natural Capital Project of Stanford University.

News release in full, click here

Example coverage, by Reuters, click here

Coverage summary, click here

Additional coverage of note: By the New York Times, click 1) here and 2) here; by the International Herald Tribune, click here