Beyond GDP: Experts preview "Inclusive Wealth" indicator to reflect sustainability of natural, human and manufactured capital
London, 28 March 2012. The Inclusive Wealth Report, developed by UNU-IHDP (hosted by UNU-ViE) and UNEP, is based on a new economic indicator that measures natural, human and produced capital and can provide guidance for economic development towards sustainability. Scheduled to be published at Rio+20, it will describe the capital base of 20 nations, among them Brazil, China, Germany, India, Kenya and Venezuela.
Brazil and India pay a high price for rapid economic growth, according to experts speaking at a major international meeting in London, Planet under Pressure.
Between 1990 and 2008, the wealth of these two countries as measured by GDP per capita rose 34% and 120% respectively. But a myopic focus on economic capital is flawed, scientists and economists at the conference argue. Natural capital, the sum of a country’s assets, from forests to fossil fuels and minerals, declined 46% in Brazil and 31% in India, according to a new “Inclusive Wealth Indicator” designed to augment GDP as a measure of economic progress.
When measures of natural, human and manufactured capital are considered together to obtain a more comprehensive value, Brazil’s “Inclusive Wealth” rose just 3% and India’s rose 9% over that time.
“The work on Brazil and India illustrates why Gross Domestic Product is inadequate and misleading as an index of economic progress from a long‐term perspective,” says Professor Anantha Duraiappah, Executive Director of the United Nations University’s International Human Dimensions Programme (UNU‐IHDP).
“A country could completely exhaust all its natural resources while posting positive GDP growth. We need an indicator that estimates the wealth of nations – natural, human and manufactured and ideally even the social and ecological constituents of human well‐being.”