GEOG 352: Day 13 –Changing the Metrics

Housekeeping Items Today, one of the debate is postponed yet again. However, we do have the

Seeds group. Ian and Craig need to remind me as to when they're presenting their book

reports. Also: this is the schedule for the tool presentations (Rob, David and Tracy TBA):

name date topicRick March 2 land trusts?Samantha March 4 CBA (Olympics)Matt March 4? alts. to GDPJulian March 11 hedonic pricing?Shaunda March 11 ?Dan March 16 company profile?Alan March 16 Happy Planet IndexIan March 16 (18?) ?Rich March 23 human capital/ immig.Bob March 23 EA/ full-cost account.

Porritt on “Changing the Metrics” -- A Few Highlights

How is Gross Domestic Product (GDP) defined and what are some of its main deficiencies?

One of its strengths is that it measures growth. Is growth essential to a capitalist economy? Is a steady-state economy actually possible?

Is it the case that capitalism is “all that is on offer” at the present?

Porritt on “Changing the Metrics” -- A Few Highlights Please look at Anielski and the web link

mentioned in the syllabus for Wednesday. For now, a main point that is that to measure whether a society is getting better or worse through growth and economic activity, one must take into account the net impact on natural (and possibly social) capital [see the example about the impact of logging activity in the Yangtze Basin in China].

Currently, we calculate national income by subtracting capital depreciation from GDP, but not natural capital depreciation.

Porritt on “Changing the Metrics” -- A Few Highlights One of the most popular alternatives to GDP, invented

by Herman Daly and John Cobb and since refined by others, is the Index of Sustainable Economic Welfare (ISEW).

These researchers suggest that in most countries where ISEW measurements have been attempted, economic welfare (which includes natural capital and the degree of socio-economic equality) has been declining since the late 1970s.

Porritt notes that these findings would be further strengthened if combined with quality of life surveys, a gap that Mark Anielski has tried to address.

Porritt on “Changing the Metrics” -- A Few Highlights

Another metric is the UN Development Program's Human Development Index. This is based on three main components: life expectancy, education and literacy levels, and GDP per capita.

Another one is Resource Efficiency Index. Most developed countries have seen a decline in throughput intensity per unit of production – that is, consumption of resources ('total material requirement') has not kept pace with growth in GDP, indicating a partial 'decoupling'.

Paul Ekins suggests that the environmental intensity of consumption in the rich countries has to become a 1/10th of what it currently is, and thereafter decline more rapidly than any growth. Is this possible?

Porritt on “Changing the Metrics” -- A Few Highlights

See the list of all the different ways this decoupling needs to occur.

Porritt and others have also been working on ways of measuring well-being (see the well-being map). What do you think of the result? Does this match at all your definitional criteria for a sense of personal well-being, and what if anything would you substitute?

Porritt notes how much the economy has changed in the last 50 years – what are some of principal changes, and what are some of the ways it is likely to change in the future?

Given the important role of price in a capitalist society in sending economic signals, Porritt is a big proponent of using green taxes to change the prices of things in the marketplace.

Porritt on “Changing the Metrics” -- A Few Highlights

He cites Ekins on the potential benefits of green taxes. [See also the box on 'old' and 'new' approaches to taxation.]

He addresses the important issue of avoiding regressivity – having taxes fall disproportionately on those of lower income.

Giving everyone access to a minimum of untaxed resources (as is practiced by Portugal and Holland), and providing rebates, are two ways this can be achieved.

He also offers advice on how to make taxes more palatable. He discusses the one-time Canadian proposal for a Tobin Tax

on all foreign exchange transactions, which is aimed at speculative currency trading (one can think of other forms of speculation that arguably should be taxed) and which could bring in enormous resources for global development goals.

Porritt on “Changing the Metrics” -- A Few Highlights

He talks about perverse subsidies and how much they cost the taxpayer. Any ideas as to why these are so hard to remove?

How do we find the courage as a society, and through our politicians, to make the bracing changes that were needed in the past to eliminate choking air pollution and streets running with sewage, and to make our own misdeeds and irrational practices appear quaint in the future?

He talks about Rich's idea of the carbon quotient – equal for every person on the planet, and how certain industry sectors will prosper in a low-carbon economy and others will wither.

He notes that, given our short-sighted instant-gratification society, it will involve significantly greater challenges introducing carbon rationing than wartime food rationing.