Measuring Sustainable Development

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Questions and Answers

What is the primary limitation of using GDP as a measure of a country's development?

It is difficult to calculate accurately

It is only used by developed countries

It does not account for non-market goods and services (correct)

It only measures goods and services produced in a short time period

What is the GINI coefficient used to measure?

Life expectancy

Poverty rates

Literacy rates

Income inequality (correct)

According to the content, what is NOT measured by the GDP?

Value of non-market goods and services (correct)

Distribution of income

Market value of all final goods and services

Value of goods and services resold

What is the purpose of creating alternative indicators of welfare?

To show a more complex picture of development and welfare Signup and view all the answers

What is the main concern with using GDP as a measure of welfare?

It is not a comprehensive measure of welfare Signup and view all the answers

What is the main question that indicators of sustainable development aim to answer?

Is the country going in the right direction? Signup and view all the answers

What is the limitation of the Environmental Kuznets Curve?

It does not work for pollution like GHG emissions and waste. Signup and view all the answers

What is the main concern about the planet's ability to survive until all countries reach the turning point?

The planet may not be able to survive the cumulative pollution. Signup and view all the answers

What is the main reason rich countries have been able to reduce pollution?

They have outsourced polluting activities to other countries. Signup and view all the answers

What does the ecological footprint measure?

The land area needed to support a given population on a given living standard. Signup and view all the answers

What is the world average ecological footprint per capita?

2.75 ha Signup and view all the answers

What is the formula for the Happy Planet Index (HPI)?

HPI = wellbeing * life expectancy / avg. per capita ecological footprint Signup and view all the answers

What does the Human Development Index (HDI) consist of?

1/3 life expectancy; 1/3 education; 1/3 GDP per capita Signup and view all the answers

What is the main limitation of ISEW and GPI?

Very complex, data required often unavailable Signup and view all the answers

What is the SDG Index based on?

The UN SDGs Signup and view all the answers

How many SDG indicators are used in the SDG Index?

119 Signup and view all the answers

What is the relationship between the SDG Index and the scores on goal 12 and 13?

They are negatively correlated Signup and view all the answers

According to the environmental Kuznets curve, what happens to environmental problems as countries develop economically?

They initially increase, but then decrease after a certain level of welfare Signup and view all the answers

What is the main criticism of the environmental Kuznets curve?

It is not accurate in reality Signup and view all the answers

What is the main difference between the GDP and sustainability indicators like ISEW and GPI?

GDP only measures economic growth, while ISEW and GPI measure sustainability Signup and view all the answers

Study Notes

Measuring Development

GDP is not a suitable measure of welfare/wellbeing as it only measures the market value of final goods and services produced and sold in a specific time period.
GDP does not account for:
- Non-market goods and services (e.g. housework)
- Distribution of income (inequality)
- Type of goods and services produced (e.g. cigarettes, weapons)
- Production methods (working conditions, working hours)
- Degradation of natural capital and externalities

Beyond GDP

There is a need for alternative indicators of welfare that show a more complex picture of development.
Examples of indicators based on GDP:
- Human Development Index (HDI)
- ISEW, GPI
Sustainability indicators:
- Human Development Index (HDI)
- SDG Index

Human Development Index (HDI)

Composed of:
- 1/3 life expectancy
- 1/3 education (2/3 literacy rate, 1/3 number of years in education)
- 1/3 GDP

ISEW, GPI

Corrects GDP's weaknesses
Very complex, often requires unavailable data

SDG Index

Based on the UN SDGs
Uses 119 SDG-indicators with widely available data
Standardizes indicators (scores between 0-100) and aggregates them
Gives equal weight to the 17 goals
SDG Index and scores on goal 12&13 are negatively correlated

Environmental Dimension

The environmental Kuznets-curve suggests that economic growth is initially bad for the environment, but after reaching a certain level of welfare, countries will devote more resources to solving environmental problems.
However, the curve may not be true in reality:
- Only works for some types of pollution (those immediately harmful to health)
- No turning point or turning point at a much higher level of income for other types of pollution (e.g. GHG emissions, waste)
- Unclear if the planet can survive until all countries reach the turning point
- May not work on a global level due to rich countries "outsourcing" polluting activities to other countries

Ecological Footprint

Measures the land area needed to support a given population on a given living standard for an unlimited amount of time
Includes:
- Area needed to produce goods consumed
- Area needed to assimilate pollution and waste generated
World average: 2.75 ha
Available biocapacity/person: 1.63 ha

Happy Planet Index

HPI = wellbeing (subjective life satisfaction) * life expectancy / avg. per capita ecological footprint
An interesting idea that combines wellbeing and ecological footprint.

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Description

This quiz explores how to measure development and wellbeing, and why GDP is not suitable as a general measure of welfare. Learn about the indicators of sustainable development and how to compare countries' progress.