How well is your country doing? The GDP - gross domestic product - has long been a measure of growth and success, but some argue judging purely on economics is too narrow-sighted.
Tom Heap meets 'chopsy' Sophie Howe, the Future Generations Commissioner for Wales who will challenge if a decision being made will be detrimental for children and those yet to be born. If the cost and inheritance to them is high it risks getting kicked out. She takes Tom to the wetlands she helped save from a planned M4 development.
Katherine Trebeck explains alternatives measures of national success, the factors they take in and why many feel happier about using them. Dr Tamsin Edwards assesses what an alternative viewpoint could do for carbon cutting.
What our experts say
We asked Society Fellows Dr Lukas Hardt and Dr Paul Brockway from the University of Leeds to offer some observations on the potential of the Happiness Index replacing Gross Domestic Product (GDP) in reducing carbon emissions. Their points take some of the themes of the programme a step further.
Dr Lukas Hardt
I would argue that letting go of GDP growth as our main goal and focussing on wellbeing and sufficiency will make climate change mitigation a lot easier and will also achieve better social outcomes. Therefore, it should be considered an important part of our toolbox for reducing carbon dioxide (CO2) emissions.
Dr Paul Brockway
A switch to a human-wellbeing/post-growth narrative has the benefit of changing the conversation to the outcomes of adopting human-wellbeing metrics, as an alternative to the incumbent GDP metric, which is merely a measure of throughput of resources. The post-growth narrative is about using less and sharing more equitably the energy/resources we do have.
What are the limiting factors?
Dr Lukas Hardt
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Replacing GDP with alternative indicators of progress does not automatically lead to emission reductions. GDP growth and the growth in associated environmental impacts has been around for much longer than GDP has been officially measured as the main indicator of progress for governments.
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Replacing GDP will therefore need to be accompanied by strong policies specifically targeted at emission reductions. But it might be easier to politically implement such policies if they can be shown to enhance social outcomes as measured by a better measure of progress, especially if they would also negatively impact GDP growth.
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We can provide a good quality of life for the whole global population using a lot less energy and carbon emissions than is currently used in rich countries.
Dr Paul Brockway
The current ‘green growth’/‘technofix’ pathways of global energy/climate models require a structural break in the long term energy-GDP relationship, as they model energy to go down (via energy efficiency) and GDP to go up. This is called absolute decoupling but has never happened before.
The IPCC/other models which show a low energy demand scenario generally assume that GDP continues to grow, at e.g. 2% per year, which breaks the energy-GDP intensity relationship, and has no historical precedent. The big elephant in the room that key energy/climate models ignore is energy rebound effects. Rebound is the idea that not all planned energy savings happen, as they rebound back into the economy. Studies suggest rebound could be over 50%. Some studies suggest that efficiency gains are a key driver of economic growth. This is a big problem for the large techno-driven models but explains why the historical energy-GDP relationship has been so closely coupled, and why it is so hard to break.
On the other hand, if we keep the long-term energy-GDP relationship, then we would require less GDP (i.e. degrowth) to move from global 400EJ/yr (exajoules per year) final energy to 200EJ/yr final energy. If we are doing that, it’s best to move to a post-growth/human wellbeing framing, so that the energy resources can be shared out more equally, and we can find less energy intensive ways of living at the same time. So, modelling for a post-growth/human wellbeing world is aligned to GDP Degrowth to reach final energy of 200EJ/yr in 2050.
The problem is making it happen, i.e. overcoming political, business, and institutional incumbency and locked-in interests.
What are the co-benefits?
Dr Lukas Hardt
Replacing GDP allows us to focus our efforts where it is directly useful for meeting everyone’s needs. We are not only facing an environmental but also a social crisis, with large parts of the global population in poverty, including large fractions in rich countries. It has been assumed that continuous GDP growth is the answer to reduce poverty, but that has not worked well. Between 1980 and 2016 the poorest 50% of the global population captured only 12% of global income growth. GDP growth is, at best, only an indirect way of addressing social challenges and, at worst, a distraction. Replacing GDP by more meaningful measures of progress helps to focus policy efforts directly on our needs and on improving lives in a meaningful way.
Ending our reliance on GDP growth has a positive effect on environmental pressures across the board, not only climate change. Climate change and greenhouse gas (GHG) emissions are only one of several environmental crises. We also face serious problems in biodiversity loss, material extraction and use, fertiliser overuse, and many others areas. GDP growth, and the increase in material production and consumption that comes with it, has been an important driver of many of these environmental problems, with no signs of decoupling (Otero et al., 2020; Hickel & Kallis, 2019). Decarbonising the energy supply might allow us to avoid the worst of climate change, but it would not address the other environmental problems, it might even make them worse. For example, renewable energy sources and batteries require a lot of materials. Replacing GDP with a better measure of progress might help us to pursue a development path less reliant on material production and consumption.
Are there any potential negative impacts of this idea?
Dr Lukas Hardt
While GDP is not a good measure of progress, our current economic system is set up to be very dependent on growth. Slowing of GDP growth or the shrinking of GDP leads to negative social impacts, such as unemployment, bankruptcies, and increased poverty. Without fundamental economic transformation, the stringent climate change mitigation measures needed to achieve our goals might lead to such negative social impacts, even if GDP is no longer the main measure of progress.
Replacing GDP as a headline indicator of progress is therefore not enough. It needs to be part of a wider program that re-designs the economy so that it delivers wellbeing without growth and that ensures that nobody is left behind in the transition to a climate-compatible economy. Such a programme might include, among other measures, a stronger and universal welfare state (e.g. universal basic services, income guarantees, job guarantees), support for alternative business models (circular economy, social enterprises, not-for-profit businesses), a reform of the financial system so that it supports a sustainable economy rather than short term rent-seeking.
Further reading
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Brockway, P. E., Sorrell, S., Semieniuk, G., Heun, M. K., & Court, V. 2021. Energy efficiency and economy-wide rebound effects: A review of the evidence and its implications. Renewable and Sustainable Energy Reviews, 141 (110781)
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Csereklyei, Z., Rubio-Varas, M. d. M and Stern, D.I. 2016. Energy and Economic Growth: The Stylized Facts. The Energy Journal, 37(2):223–55
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Grubler, A., Wilson, C., Bento, N., Boza-kiss, B., Krey, V., McCollum, D.L., et al. 2018. A low energy demand scenario for meeting the 1.5 °C target and sustainable development goals without negative emission technologies. Nature Energy, 3, 515–27
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Hickel, J., & Kallis, G. 2019. Is Green Growth Possible? New Political Economy, 25(4), 469–486.
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International Energy Agency (IEA). 2019. World Energy Outlook 2019. World Energy Outlook 2019
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International Energy Agency (IEA). 2020. Key World Energy Statistics 2020
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Jackson, T 2017. Prosperity without Growth – Foundations for the Economy of Tomorrow. London: Routledge
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Keyßer, L. T., & Lenzen, M. 2021. 1.5 °C degrowth scenarios suggest the need for new mitigation pathways. Nature Communications, 12(1), 1–16
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Millward-Hopkins, J., Steinberger, J. K., Rao, N. D., & Oswald, Y. 2020. Providing decent living with minimum energy: A global scenario. Global Environmental Change, 65(102168)
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OECD. 2020. Real GDP long-term forecast.
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Otero, I., et al. 2020. Biodiversity policy beyond economic growth. Conservation Letters, 13(4), e12713
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Raworth, K. 2018. Doughnut Economics, Seven Ways to Think Like a 21st-Century Economist, Cornertsone
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Ritchie, H. and Roser, M. 2020. CO₂ and Greenhouse Gas Emissions. OurWorldInData.org
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Trebeck, K. and Williams, J. 2019. The Economics of Arrival, Ideas for a Grown-Up Economy. Policy Press
About the series
39 Ways to Save the Planet is a new radio series by BBC Radio 4 developed in partnership with the Society and broadcast in 2021. It showcases 39 ideas to relieve the stress that climate change is placing on the Earth. In each 15 minute episode Tom Heap and Dr Tamsin Edwards meet the people behind a fresh and fascinating idea to cut the carbon.
Over the course of 2021, the Society will be producing events and digital content to accompany the series.
Episode 34: The happiness index
Featured card image: Sophie Howe & BBC
Featured banner image: Johnstocker/Adobe Stock
But doing so would require a large redistribution of material consumption, both from rich countries to poorer countries and from richer to poorer parts of the population within countries. Without a change in our social narrative telling us that consumption is the key to wellbeing, achieving such redistributions will be politically difficult. Replacing GDP by an alternative measure of progress will help with re-framing narratives of success and wellbeing away from material consumption.