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Conscious Decoupling: GDP and environmental sustainability

There have been other attempts to put these kinds of reforms into practice. In the US, the Maryland state government now refers to an index called the Genuine Progress Indicator (GPI) before making its budget decisions.[6]  The GPI supplements GDP figures with variables such as leisure time and unpaid housework, and subtracts so-called ‘regrettables’ including pollution and time spent commuting.

Similarly, in 2013 the Australian Bureau of Statistics launched a platform called Measures of Australia’s Progress (MAP) to track education, health and social trust alongside traditional economic variables. MAP showed that while the economy and per capita income had increased over the previous decade, social trust had stagnated and the health of the natural environment had regressed.

Despite these innovations, it is likely to be some time before the majority of states, economists and investors end their reliance on GDP. Economist Diane Coyle put it nicely when she said: "There’s a lot of interest in change at the moment, but it’s a bit like having a technical standard, like driving on the left side of the road. Nobody is going to switch until anyone else switches".

So there needs to be some kind of consensus and enough intellectual firepower behind switching to something else, as was the case when GDP was invented during the Second World War and immediately afterwards. As there is not yet any consensus on how to reform or replace GDP, it seems likely that the debate over the compatibility of economic growth and environmental welfare will run and run.

For now, GDP is the best metric we have for the state of economies, the flow of investment and per capita wealth. To paraphrase Winston Churchill’s famous observation about democracy, GDP remains the worst way of measuring economies apart from all the others that have been tried from time to time.

For further information.

[1] ‘Decoupling natural resource use and environmental impacts from economic growth,’ UNEP, 2011

[2] ‘The irreversible momentum of clean energy’, Science, June 2017

[3] Op. cit.

[4] Tim Jackson, Prosperity without growth: Economics for a finite planet (Routledge, 2009)


[6] ‘Maryland Genuine Progress Indicator,’ Maryland state government website

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