Economic Growth Calculations
Expressing indicators in a coherent framework
Annual publication of indicator lists covering multiple dimensions of sustainable development tends to become widespread. Some ecological economists go beyond the juxtaposition of indicators. They want to express these in a coherent framework based on ecological economics principles.
Their reflection therefore goes beyond the question of the choice of units of measure and the creation of individual indicators. To illustrate this effort, we will give an example: An economist has an attempt to assess the proximity of nations to a stable socially sustainable economy.
It is part of a vision initiated in the 1970s that separates the ultimate means of human satisfaction from the intermediate means. Intermediate goals (health, equality, social capital, etc.) and ultimate goals (well-being) go together. Established shrinkage accounts consist of both biophysical accounts and social accounts.
The first is developed to apply to the ideas of sustainable scale of the economy and stability of flows and stocks. The latter refers to subjective indicators of well-being, health and poverty. At the same time, democracy, inequality and working time are important.
An economy is considered a steady state economy when it consumes a fixed amount of resources within ecological limits. It is also socially sustainable when its performance, measured by social indicators, is satisfactory. The empirical study, applied to 181 countries over ten years, offers at least three important results.
The first is that no country today has a truly stable and sustainable economy. (stable use of resources within ecological limits)
Second, it has been statistically proven that countries with a higher Ecological Footprint per capita outperform in nine social areas. (including quality of life expectancy, satisfaction and democracy)
Third, social performance is generally better in countries where resource use is stable than in countries where it is increasing or decreasing.
In doing so, it blocks the notion that a growth economy is more desirable than any other, which is well-entrenched among many economists.
However, these results stabilize the use of resources for any level of development. And it does not allow us to conclude that an increase in social performance is possible.
Biophysical Indicators
The ecological footprint assesses the pressure of our lifestyles on renewable resources. There are rates calculated and published annually by the Global Footprint Network. There are requirements for both producing the resources that an individual, a population or an activity consumes, as well as absorbing their waste.
They measure biologically productive land and sea surfaces (biocapacity). It is produced, given the state of current technologies and resource management practices.
This area is expressed in global hectares. If the required area exceeds the available biocapacity, consumption cannot be sustained. Sustainability is considered here in terms of consumption, not production.
Responsibility for ecological prints therefore lies with the final consumer. It contributes to explaining the very different messages conveyed by these indicators.
The ecological footprint has played a beneficial role in raising awareness thanks to the simplicity of its message. It is the subject of criticism in connection, among other things, with the unit of account, the global hectare.
Also, carbon emissions are so great that many experts recommend focusing on the simpler and more stringent carbon footprint.
Economic growth
Gross domestic product
Economic growth models
Real GDP
GDP formula
Gross Domestic Product measures
Nominal GDP
Global economic growth
This has the advantage of not using the global hectare unit of account: It converts consumption into tons of CO2 equivalent.
However, counting the effects of consumption of a population and not of production in a region has something in common with the ecological footprint: Emissions from the production of imported goods are taken into account.
The carbon footprint in France is significantly higher than the greenhouse gas emissions in the region. Contrary to the latter, the country’s climate sustainability did not decrease in absolute value between 1990 and 2012. In this context, it is interesting that France has recently decided to use carbon footprint in the evaluation of public policies.
Other footprints (water, materials, biodiversity) apply the same principle to assessing flows for consumption: The water footprint measures the amount of water needed to produce consumer goods. The material footprint contributes to questioning the idea of fairening the economy of rich countries.
Yaşam Ayavefe
