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The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
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Gross domestic product, or GDP, measures goods and services produced in a given country in a given period, with a focus on growth. It's a measure many countries watch closely.
But GDP doesn't actually tell us much about the value of natural capital, like clean air or healthy forests. Such natural goods and services, despite their great economic contributions, are largely viewed as free.
Now, the United Nations Environment Program is offering an alternative as part of the Rio+20 negotiations in Brazil this week. It’s called the Inclusive Wealth Index. The IWI adds natural capital to the list of economic measurements in a bid to assess the sustainability of a country's growth.
For example, China's growth drops from more than 400 percent since 1990 as measured by GDP to just 45 percent in the IWI, thanks to the decline in that country's natural resources. Other countries, like Nigeria and Russia, actually register negative growth. Talk about shifting baselines.
GDP also isn't a very good measure of whether people are benefiting from growth, as the economist who invented GDP warned in the 1930s. After all, a rise in cancer diagnoses registers as growth. But that’s growth nobody wants.
—David Biello
[The above text is an exact transcript of this podcast.]
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6 Comments
Add CommentI struggle to comprehend how clean-air can or should be included in a wealth creation metric such as GDP.
Reply | Report Abuse | Link to thisMore fundamentally however, I do wonder whether the consequential costs of profit-generators is factored-into GDP. i.e. If we include the profits of banks’ casino operations, do we also offset the losses to the losing counterparties in what is surely a zero-sum operation?
An interesting exercise, but will it lead to anything meaningful? Companies in the 70's have huge profits and growth due to polluting lake Erie (or Michigan, etc) and in the 80's pay for the clean up with lesser profits and growth as the EPA slams the hammer down. I've thought that way for years but it seems the "pollute for profits today, screw tomorrow's generations" Republican mantra made that idea superfluous. How any of this is tied to cancer rates and growth is bewildering. Perhaps Biello could elucidate.
Reply | Report Abuse | Link to thisI assume what he is referring to is the costs (and profits) associated with cancer. Hospitals and Doctors have increase in profits with increases in cancer treatments. All of this is part of GDP. War is very good for GDP, but for most of us, not a desirable means of increasing economic activity.
Reply | Report Abuse | Link to thisThis country coasted on the economic results of WWII for about 30 years or longer.
Reply | Report Abuse | Link to this'This country...' What country?...oh, ya forgot. Americans can't get there head out of their a-hole.
Reply | Report Abuse | Link to thisDo Americans ever get their blinkers off and look at the world or does every discussion need to regress into US domestic politics....myopic groupies squabbling over tweedle-dee and tweedle-dum?
Back to the article. The devil is in the details. Threre's no practical way to give weight to variables so it becomes a 'so what?
GDP = Great Dumb Polluters.
Reply | Report Abuse | Link to thisWhich country has the greatest GDP?
Why uncle sam of course!