GDP growth doesn’t reflect today’s challenges
While societies rely on the Gross Domestic Product (GDP) growth for many things, it doesn’t actually reflect today’s challenges which deal with sustainability, according to Pavan Sukhdev, Founder – GIST Advisory and UNEP Goodwill Ambassador delivering a lecture on “Moving Beyond GDP for Sustainability” at the Central Bank auditorium in Colombo last week.
What the GDP does and does not do, he explained, is as follows:
- When there are floods there is an increase in government and private spending on flood damage. But the damage can be mitigated by increasing forest density and forest cover.
- An increase in medical spending on respiratory diseases affects GDP but reduction of air pollution by using cleaner fuels and promoting green cities will negate the problem.
- While an increase in spending on schools and university buildings increases costs, the increase in human capital and earnings potential through education shows the benefit of initial investment.
- While there was huge repair and construction activity after the Tsunami disaster, did anyone account for the loss of lives and livelihoods of people following this disaster?
“We do have a problem measuring these issues at the national level. The indicators doesn’t pick up some things that matter to people.” He said acidification of oceans will deplete the supply of fish the world population depends on for the supply of protein.He said the Governor of the Central of Sri Lanka, Dr. Indrajit Coomaraswamy has shown his interest in looking at these issues from a correct perspective.
“At some point I got fascinated by the challenge of sustainability and in particular the problem of economic invisibility of nature without which our eco systems cannot survive and our societies would fail,” he noted.Mr. Sukhdev referred to the connection between the private sector and the government and its connection with sustainability along with what indicators predict. The idea of sustainability has been around for some time since the popularisation of a report almost 30 years ago. He said although sustainable development and climate change are often thought of ways of managing it, one cannot manage it unless ‘you’ measure it. Therefore it is essential to manage it in the first instance.
Mr. Sukhdev said that today’s focus was on advertising where people do not talk of ethical values ,”When I said this at a forum some time ago, someone from the advertising industry got up and said why do you say this when we are ethically neutral. I then told him that you cannot be ethically neutral, you have to be one or the other – (either ethical or not on an issue).” However today there are a lot of advertising agencies understanding this issue and working to develop new guidelines to improve on this point.
He referred to an international conference organised by the European Union in Brussels in 2007 under the theme “Beyond GDP” where 650 delegates, politicians, scholars, institutions and private corporations from 50 countries supported the momentum to go “Beyond GDP”. The declaration issued at the conclusion of the conference was that “GDP is unfit to reflect many of today’s challenges, such as climate change, public health, education and the environment.” A team of scientists has also pointed out that people today are living out of planetary boundaries due to an environmental ceiling.