| pag. 1 A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006 Brent Bleys Degrowth 18/04/2008

| pag. 1

A Simplified Index of Sustainable Economic Welfare (SISEW) for France

1980-2006

Brent Bleys

Degrowth18/04/2008

A Simplified ISEW26/06/2007 | pag. 2

The ISEW Story

• ISEW– measure that tries to capture the overall impact

of economic activity on human well-being– developed by Herman Daly and John Cobb– more recently: GPI and MDP

• implementations in a growing number of countries

• result: optimal physical scale of the economy has been surpassed


Optimal Physical Scale (Lawn)

Threshold Hypothesis (Max-Neef): “for every society there seems to be a period in which economic

growth seems to bring about an improvement in the quality-of-life, but only up to a point - the threshold point - beyond which, if there is more

economic growth, quality-of-life may begin to deteriorate.”


The ISEW for the UK (Jackson et al.)


The ISEW for Belgium


A Simplified ISEWItem Selection

• rationale for a SISEW:– large amount of data needed– inconsistent set of items and valuation

methods– e.g. noise pollution

• proposal: omit from the ISEW those items that have low quantitative significances when compared to most other items (based on original case study) -> Simplified ISEW


A Simplified ISEWMethodology

ITEMS

Personal Consumption Expenditures + 1.35

Losses from Income Inequality - 0.16

Value of Household Work + 0.59

Public Expenditures Health & Education + 0.15

Costs of Commuting - 0.05

Costs of Air Pollution - 0.07

Natural Capital Depletion - 0.47

Costs of Climate Change - 0.28

Costs of Ozone Layer Depletion - 0.11

Net Capital Growth +/- 0.09

Change in NIIP +/- 0.08


A Simplified ISEWBelgium


A Simplified ISEWConclusions

• easier compilation, without affecting the outcome of the exercise (except for changes in absolute terms)

• highlights the items that most urgently need an internationally agreed upon methodology

• manual -> possibility of calculating SISEW/capita for a large group of countries using a standardized set of valuation methods

• important to keep in mind that the eventual omission of any items is based on historical observations + differences between countries


SISEW for FranceGeneral

• Compilation of a Simplified ISEW for France, 1980-2006

• data obtained from– INSEE, IMF, WIDER’s WIID– WRI, UNEP’s Geo Data Portal

• 11 items, methodology taken over from Jackson et al.’s ISEW study on the UK (1997)


SISEW for France

Per capita GDP vs SISEW

0.0

5000.0

10000.0

15000.0

20000.0

25000.0

30000.0

198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006

2000€/capita

per capita GDP per capita SISEW


SISEW FrancePositive Items

-200000.0

0.0

200000.0

400000.0

600000.0

800000.0

1000000.0

198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006

million 2000€

Private Consumption Expenditures Services from Household Labour

Non-defensive Public Expenditures Net Capital Growth

Changes in Net International Investment Position


SISEW FranceNegative Items

0.0

50000.0

100000.0

150000.0

200000.0

250000.0

300000.0

350000.0

198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006

million 2000€

Welfare Losses caused by Income Inequality Costs of Commuting

Costs of Air Pollution Depletion of Non-Renewable Resources

Long-Term Environmental Damage Ozone Layer Depletion


Alternative Measures of Well-Being

• increasing interest in alternative measures of well-being:– OECD’s World Forum on Statistics,

Knowledge and Policy– EU’s ‘Beyond GDP’ conference– Globescan survey reveals a worldwide

support for alternative measures

• large number of possible alternatives, the ISEW and GPI being one of them


ISEW and Policy

• ISEW has some potential for policy-making:– more comprehensive approach than traditional

economic accounting– captures the trade-off between these dimensions– possible first step towards a different set of economic

accounts

• However, a country should never be guided by one single index (neither GDP, nor ISEW) -> different types of indicators are needed


ISEW and Policy (2)

• the ISEW should be seen as a measure of economic welfare: the value added by the economic system to natural capital

• sustainability is not captured at all by the ISEW, supplemental accounts are needed to account for this

• need for the development of a standardized and widely supported methodology (crucial)


ISEW and Policy (3)

• great potential as a communication tool (empirical translation of the criticism on GDP)

• often put forward in such a way• = contribution to the degrowth debate

Thank you!Questions?

Documents

| pag. 1 A Simplified Index of Sustainable Economic Welfare (SISEW) for France 1980-2006 Brent Bleys Degrowth 18/04/2008