An alternative, sustainable way of understanding and measuring wealth is urgently needed. One positive approach is the Inclusive Wealth Indicator (IWI), being launched by economists, climate and development experts.
Authored by 17 specialists from the UK, USA, Chile, Malaysia, India, Germany and Australia, it measures not profit-generating activities, but a country's progress towards a long-term sustainable future.
Take two of the so-called Bric countries. Between 1990 and 2008, the wealth of Brazil and India, as measured by GDP per capita rose 34% and 120% respectively. But natural capital, that is the sum of a country’s assets, from forests to fossil fuels and minerals, declined 46% in Brazil and 31% in India, according to the IWI.
When measures of natural, human and manufactured capital are considered together, Brazil’s “inclusive wealth” rose just 3% and India’s rose 9%. Professor Anantha Duraiappah, executive director of the United Nations University’s International Human Dimensions Programme (UNU-IHDP), says:
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. 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.
A stark warning about the state of the eco-system as a whole has been issued by experts meeting at the Planet Under Pressure conference in London. Their concerns are aimed at the politicians who will meet at the UN's "Rio +20" summit in June.
The last 50 years of profit-driven expansion of commodity production, what they are calling "The Great Acceleration" has brought the natural world to the brink. Key indicators of the planet's state highlighted at the conference are:
• higher levels of carbon dioxide in the atmosphere
• large dead zones in coastal areas due to phosphorous extraction and fertiliser run off
• rising air and ocean temperatures
• melting sea ice, polar ice sheets, permafrost and glaciers, rising sea levels
• ocean acidification
• thousands of species extinct
• growing consumption of fresh water and energy in a world where billions still lack the most basic elements of well-being.
A new time lapse animation offers vivid evidence that Earth has entered a new geological epoch, dubbed the “Anthropocene”. It illustrates the dramatic growth of carbon dioxide emissions since the dawn of capitalism.
All that investment, all that development, all that government support, all that human labour at such an enormous cost to the planet as a whole, and its people, particularly the poorest.
As former UN Climate chief Yvo de Boer told the conference: “If companies had to pay for the full environmental costs of their activities, they would have lost 41 cents out of every (US) $1 earned in 2010. The external environmental costs of 11 key industry sectors rose by almost 50 percent between 2002 and 2010, from $566 billion to $854 billion.”
De Boer continued: “It is clearly no longer the question if we must transcend to a more sustainable economy. The question is the pace at which we are able, and especially willing, to achieve it.”
So it turns out that equality, sustainability, social justice and putting people before profit are not only the demands of the millions across the planet from the Arab Spring to the Occupy movement - they are what the whole eco-system is crying out for.