Ecological economics? Robert Costanza: is the love for la dolce vita
[31 ottobre 2013]
In your latest study published in Ecological Economics you state that «while the global gross domestic product (GDP) has more than tripled since 1950, the economic well-being, estimated by the Genuine Progress Indicator (GPI), has actually declined since 1978». Do you think that the clock of progress has stopped?
«What this means is that since 1978 we have not been making “genuine” progress globally, even though some countries are doing better than others. GDP was never designed as a measure of progress – it only measures economic activity – which can include things we don’t necessarily want more of, like crime, pollution, and family breakdown. The problem is that we have forgotten that GDP is a very limited measure and mistakenly use it as a measure of overall progress. GPI adjusts GDP by adjusting for income distribution, adding the value of household and volunteer work, and subtracting environmental and social costs. We find that when you account for these things there has been practically no net gain or genuine progress globally since 1978. It should be noted that GPI is not the perfect indicator of economic welfare or broader concepts of sustainable human well-being. There is much more work to do in this area. But the adjustments it makes are reasonable and the results are compelling. You get what you measure and we are following the wrong goal in trying to maximize GDP. We need to quickly shift to broader measures of progress if we hope to achieve sustainable well-being and return to a path of genuine progress».
The article also points out that «the GPI/per capita reached its peak in 1978, namely about the same time when the global ecological footprint exceeded the global biocapacity». What can be gathered from this simultaneity?
«This may be just a coincidence, but since GPI subtracts environmental costs which have been increasing as our ecological footprint increases it is not surprising that both measures pick up this trend. Both measures point to 1978 as the point at which overall costs began to exceed benefits and we began to deplete our natural capital assets rather than living off the interest. We are now in a period of what Herman Daly has called “uneconomic growth” – where the economy is growing but it is no longer “economic” because we are not making genuine progress».
One of the most interesting findings described the study is that «globally, the GPI/per capita (and thus the welfare assessment, editor’s note) does not increase beyond a GDP/per capita of about 7 thousand dollars a year», an economic level that may already be broadly achieved with a fair distribution of the global GDP. But how could an Italian citizen be happy with about 425 € per month?
«The point is not that everyone in the world would have exactly the same income – but that income could be distributed far more equitably than it is now and that would be not only sustainable but also more desirable from a quality of life and well-being point of view. The work of Richard Wilkinson and Kate Pickett published in “The Spirit Level” has shown a strong correlation between income inequality and a whole range of social problems. Scandinavian countries and Japan have the lowest income inequality, the least social problems and the highest quality of life. The point is that we no longer need GDP growth to improve well-being in many countries – we could do better with less but more equitably distributed consumption and with lower impact on the environment. Other countries do need growth, but of a different kind that focuses on improving equity, investing in natural capital, and well-being. We need a new development paradigm and have formed a global Alliance for Sustainability And Prosperity (ASAP) to begin to consolidate all the various groups working toward this goal (www.asap4all.org)».
The economic crisis has sharpened the issues related to poverty in Western countries, with declining purchases of goods and services. In your opinion, how would the citizens react to a policy based on the reduction of their economic income?
«There is a large amount of new research in the “science of happiness”, “positive psychology”, and “behavioral economics” that shows that people’s sense of well-being is not so dependent on their economic income, once they have passed a threshold of sufficiency. Beyond that point, it is consumption relative to their peers for status rather than absolute consumption that affects their well-being, and a broad range of non-consumption related factors. These include interactions with family, friends, and the community (social capital), security, participation in decision-making, leisure, affection, achievement, etc. A loss of income with no other changes would definitely be seen as a loss and resisted. But a reduction in income combined with a large increase in well-being from other sources would be acceptable and even desirable if these changes are clearly linked and articulated. Italians are known for their love of “la dolce vita” and they can understand the tradeoffs involved in working too hard to increase their income at the expense of the other good things in life. We need to bring what we are learning about the psychology of la dolce vita to bear on both designing a better world and easing the transition to it».
Nonetheless, a shift of the global socio-economic model toward a steady state goal still seems the only reasonable perspective for a sustainable future well-being. Do you still hope that mankind will ever get close to it?
«I am hopeful, but we must recognize that we are in a very real sense “addicted” to the current socio-economic model. It is therefore not surprising that the transition to a sustainable and desirable economy and society will be difficult and slow. Like breaking an individual addiction, it will require therapy and a real desire to change. We can create that desire by first pointing out that our current path is not sustainable, but more importantly by also showing that there is a better way. We have to create a shared vision of an economy-in-society-in-nature that is both sustainable and desirable. Many groups and individuals around the world are now working on this (see www.asap4all.org) and I am hopeful that we will reach a tipping point and break our addiction before it is too late».
Do you believe that the progress made by behavioural economics in recent years can be a significant support to achieve a social path leading to a steady state economy?
«Yes, along with the progress in positive psychology and related fields mentioned above. This research confirms that people do not behave like the greedy, atomistic, competitive individuals that the conventional economic model assumes. It shows that human behaviour is much more complex and that we are an inherently social and cooperative species. Real people are generally happier when they are giving things away and helping others than when they are taking things. It shows that the kinds of changes we need to achieve a sustainable and desirable future are not a sacrifice and are not contrary to “human nature”. It is instead a sacrifice not to make these changes and the sustainable and desirable future we are describing is much more consistent with human nature than the current model ever was».