Post on 26-Feb-2016
description
transcript
The Vermont Genuine Progress Indicator
Eric Zencey Fellow and Coordinator, Vermont Genuine
Progress Indicator Project
You can’t make something from nothing and you can’t make nothing from something.
Laws of Thermodynamics
2. You can’t recycle energy.
Laws of Thermodynamics
The Entropy Law and the Economic Process, Harvard University Press, 1971
13
“Seen solely from a thermodynamic perspective, an economy consists of nothing more
than a set of institutions that transform valuable, low-entropy inputs into valueless waste.”
Implication
14
Implication: Measure what matters: Sustainable delivered wellbeing
GDP Fails horribly
• Assumes “more stuff” = happiness & wellbeing• Assumes growth in transactions = more stuff• Neglects elements of wellbeing that aren’t bought
or sold (health, social engagement, strong families & neighborhoods, good governance, etc.)
• Miscounts costs as benefits (like storm damage)• Doesn’t count unpaid work• Doesn’t count ecosystem services
GDP Fails horribly
• AND the emphasis on maximizing matter—and-energy throughput means it isn’t sustainable AT ALL….
A sustainable system or entity does not undercut its own preconditions for existence.
Premise:
Humans in society enjoy the benefit of services of four stocks of capital:
built natural social cultural.
• No society can be sustainable if its operation depends on the draw-down of built, natural, social, or cultural capital.
From which it follows
Sustainable wellbeing requires the preservation of these four forms of capital
Economic + Environmental + Social
• Personal Consumption• Income Inequality• Adj. Personal Consumption• Services of Consumer
Durables• Cost of Consumer Durables• Cost of Underemployment• Net Capital Investment
• Cost of Water Pollution• Cost of Air Pollution• Cost of Noise Pollution• Cost of Net Wetland
Change• Cost of Net Farmland
Change• Cost of Net Forest Cover
Change• Cost of Long-term
Environmental Damage• Cost of Ozone Depletion• Cost of Non-Renewable
Energy Resource Depletion
• Value of Household Work• Cost of Family Changes• Cost of Crime• Cost of Personal Pollution
Abatement• Value of Volunteer Work• Cost of Lost Leisure Time• Value of Higher Education• Services of Highways and
Streets• Cost of Commuting• Cost of Motor Vehicle
Crashes
GPI =
Per Capita GSP v. GPI
Per Capita GSP v. GPI
GPI
GPI Economic
GPI Social
GPI Environmental
Per Capita GSP less Government Expenditures less Business Investment
PersonalConsumption
Personal Consumption adjusted for Income Distribution
Less the Cost of Consumer Durables
Plus the Services of Consumer Durables
Less the Cost of Underemployment
Plus Net Capital Investment
Per Capita GSP vs. GPI Economic Factors
Less the Cost of Water, Air, and Noise Pollution
Less the Cost of Climate Change, Ozone Depletion, and Nonrenewable Resource Depletion
Less the Net Change of Wetlands, Forestlands, and Farmlands
Per Capita GSP vs. GPI Economic + Environmental Factors
Less the Cost of Family Changes, Crime, and Personal Pollution Abatement
Less the Cost Commuting and Motor Vehicle Accidents
Less the Cost of Lost Leisure Time
Plus the Value of Household Work and Volunteer Work
Plus the Value of Higher Education and Services of Highways & Streets
Per Capita GSP vs. GPI Economic + Environmental + Social Factors
Per Capita GSP vs. GPI
Vermont Act 113
An act relating to the genuine progress indicator
(a) Purpose. The purpose of the genuine progress indicator (“GPI”) is to measure the state of
Vermont’s economic, environmental, and societal well-being as a supplement to the
measurement derived from the gross state product and other existing statistical
measurements.
(b) Definition. The GPI is an estimate of the net contributions of economic activity to the well-
being and long-term prosperity of our state’s citizens, calculated through adjustments to
gross state product that account for positive and negative economic, environmental, and
social attributes of economic development.
(c) Intent. It is the intent of the general assembly that once established and tested, the GPI
will assist state government in decision-making by providing an additional basis for
budgetary decisions, including outcomes-based budgeting; by measuring progress in the
application of policy and programs; and by serving as a tool to identify public policy
priorities, including other measures such as human rights.
Further Developments • GPI forms the structure of the Comprehensive Economic
Development strategy being developed by the state (which will be announced shortly).
• The budgeting committees of the state legislature have begun integrating GPI measures into their work, through development of GPI related performance goals and through exploring the adoption of “GPI notes” on bills that are introduced
• The state auditor has announced his intention to start auditing state programs against criteria developed from GPI
• A prominent socially responsible business has begun talks with the Gund about integrating GPI into their criteria for performance evaluation.
Further Information
www.vtgpi.org
• Current and previous reports of VT GPI• Technical report on methodology• Other GPI related news
Further Information
Also, consider attending
“Happiness and Wellbeing: Building a National Movement”
the fifth North American Conference on Gross National Happiness, in Burlington, VT, May 29 and 30. For details see
http://www.gnh2014.com/
The Vermont Genuine Progress Indicator