MEASURING SUSTAINABLE DEVELOPMENT
A Set of Indicators for Scotland
Egil GlorudGEO 302
NHH / Adrià Bonell i Rovira
Exchange Student
Våren 2002
INTRODUCTION
The modern era of assessing progress began in the late 1940s when systems of national accounts and the annual calculation of gross domestic (or national) product (GDP or GNP) were introduced. These measures were designed to allow national governments to track the flow of goods and services in the economy through a calculation of national income.
However, over the past half-century, many have spoken out against this practice. In 1987, the World Commission on Environment and Development (Brundtland Commission) called for the development of new ways to measure and assess progress that would go beyond economic signals and capture a fuller sense of human and ecological well-being. This call has been subsequently echoed through activities that range from local to global in scale. In response, significant efforts to assess performance have been made by corporations, non-government organizations, academics, communities, nations, and international organizations.
One of the academics who committed with the research of ways for measuring sustainability is professor Ian Moffat, from the Stirling University (Edinburgh). His experience measuring Scotland's sustainability through a set of relevant indicators has demonstrated that, despite worldwide persisting problems related to proper data availability (even in the most developed countries), it is possible to carry out this kind of studies in a sound way.
QUESTION STATEMENT AND LITERATURE REVIEW
This paper is adressed to give a summarised vision of some theoretical underpinnings and problems of sustainable development indicators research, as well as to describe a real case application of this knowledge.
There is a large and growing literature on indicator theory and different types of indicators for sustainable development, and good source of information on worldwide progress on this field can be found in the International Institute for Sustainable Development web site (http://www.iisd.org).
The historical introduction of this paper has been based on Assessing Sustainable Development: Principles in Practice by Hardi I. et al. (1997), which can be found on the Internet (http://iisd1.iisd.ca/pdf/bellagio.pdf). The rest of the analysis has been based mainly on two Ian Moffat et al. materials. Firstly, Measuring and modelling sustainable development (2001), that is an up-to-date and well-organised theoretical knowledge source which, in my opinion, combines masterly some of the most important contributions to sustainable development indicators research field appeared in the last years. Secondly, Measuring and assessing indicators of sustainable development for Scotland: A case study (1994), which I have used to describe a real case of sustainability assessment using indicators.
METHODOLOGY
First of all, some basis of sustainability indicators development are introduced: the pressure-state-response framework is presented as well as some theoretical findings about conditions to be fulfilled by suitable SD (sustainable development) indicators. Moreover, the important topic of data sources and problems related to data collection and processing are discussed.
The second part of the paper deals with a more practical issue, describing seven indicators used for assessing Scotland sustainability, and the results obtained through a study of the available data from this region. Finally, the conclusions section tries to give an overall view of the main ideas exposed in this paper, as well as some final important considerations.
MEASURING SUSTAINABLE DEVELOPMENT: A SET OF INDICATORS FOR SCOTLAND
A FRAMEWORK FOR SUSTAINABLE DEVELOPMENT INDICATORS
As previously mentioned the basis for the development of indicators of SD derives from dissatisfaction with GNP and GDP as a basic measure of socio-economic development. Thus, there is a need to devise new methods to determine whether current patterns of development are sustainable or not and whether changes in policy are actually leading or not to a more sustainable world.
The basis of this type of research into new indicators of sustainable development is derived from the OECD (1991) pressure-state-response framework, developed originally for environmental indicators. The OECD framework is based on the premise that there are pressures on the Earth environmental systems and that these pressures combine to produce a particular state of the environment and that decision makers at different levels then respond with appropriate action (Figure 1). Measurements of the condition of the systems can be taken at any of these three levels. Arguments have been presented for concentrating measurement at the pressure level, since this gives an early warning, but in practice most indicators have been developed and presented at the state level.
Figure 1. - Pressure-state-response framework
This framework can be extended so that it is possible to develop a set of indicators to reflect the complex economic, ecological and socio-polictical processes that make up sustainable development. The responses that society makes depend on government priorities and policies, and businesses and pressure groups, as well as ordinary citizens acting together. However, decision makers in government or elsewhere are usually very slow to respond to public or private calls for action.
WHAT MAKES A GOOD INDICATOR?
Common to all research into SD indicators are the problems of identifying what to measure and how to measure it. Indicators ought to be useful at a number of groups with different needs: for research purposes, for policy makers, and as a source of information for the general public. The research community puts a high premium on the methodologies being internally consistent and the data comparable. Policy makers want SD indicators to act as an effective guide, being clear, unambiguous and helpful to strategic and applied policy making. Moreover, general public need to be informed if their environment and quality of life is deteriorating, about whether this trend is expected to continue, and how such a situation can be turned around. More formally, Anderson (1991) has suggested seven criteria that may determine a good indicator:
(1) The indicator or the information from which it is calculated should be readily available;
(2) The indicator should be relatively easy to understand;
(3) The indicator must be about something that can be measured;
(4) The indicator should measure something believed to be important in its own right;
(5) There should be only a short time lag between the state of affairs referred to and the indicator becoming available;
(6) The indicator should be based on information that can be used to compare different geographical areas; and
(7) International comparability is desirable.
DATA SOURCES AND PROBLEMS
Given that sustainable development requires the integration of economic, ecological and social aspects of the real world, it follows that there is a need to develop a set of indicators based on data from these different dimensions of sustainable development.
· Economic Data
There are a variety of sources of economic data. Government publications provide a wealth of secondary data. Information on GDP and the price of commodities can be found in numerous publications as well as in on-line information sources. Unemployment data can be taken from industrial studies and from local employment exchanges. Usually, economic data is well represented in time series and, less often, this data can be disaggregated for mapping purposes and in order to represent regional patterns. However, one of the major disadvantages of economic data is that estimates do not show error bars.
· Environmental/Ecological Data
Environmental and ecological data have improved in quality and quantity in recent years. Several published sources of secondary data, such as state of the environment reports, provide useful information. Primary data collected continuously for meteorological information, or at less regular intervals for pollutants, and surveys of flora and fauna, are the main input to the environmental source materials. Unlike much of the economic data, many of the environmental and ecological measures show the associated sample size and error bars. However, in other cases (e.g renewable and non-renewable resources) the data are estimates, which can be very crude. In addition, many of the estimates of resource size and consumption usage are given by private or public companies who do not want this data to be known to their competitors or potential enemies (data may exist but is confidential).
· Socio-political Data
Socio-political data are often found in the census returns that estimate demographic factors (e.g. fertility, migration, and age distribution). Government and research organisations undertake work into consumer preferences and literacy levels, as well as numerous studies on shopping habits, traffic movement and environmental perception. This wealth of data often addresses a specific problem, and a lack of comparability between different areas is a common fault of such studies. In other cases, the data are only for one short time period, and therefore are not useful for time series. This is important if our intention is to see how socio-economic and environmental conditions have varied through time and space.
A part from the source, if we are to accurately reflect the state of the environment and sustainable development, it is essential that reliable data be used. Sometimes data simply may have not been collected, or existing, it is either commercially or politically confidential. Nevertheless, although existing and available, the data for different indicators vary in quality and quantity. The quality of the data for single variates depends on the way in which the original survey was carried out; the sampling framework used; the methods of collection; and the replies generated by the people in the sample. Problems also exist in the aggregation of data when are not collected at small spatial scales and then reported at larger ones. Then it is not possible to return to the smallest data collection unit to observe local environmental and socio-economic idiosyncrasies, or to aggregate data so that a broader pattern can be obtained.
If an indicator is based on two or more variates, the questions arised are those related to the scales of measurement on which each variate is based and the ways in which these can sensibly be combined. While economists often do not face these problems as all measures can be aggregated into one figure because of the utilisation of money as the scale of measurement, deriving aggregate indicators based on ecological or socio-political data sets can be difficult. Finally, and assuming that variates can be combined in a meaningful manner, the next problem is to devise a suitable set of weightings for each variate, which is further exacerbated if some equity decision is included in the indicator (e.g. assumptions related to per capita rent distribution).
A SET OF SUSTAINABLE DEVELOPMENT INDICATORS
From an examination of the literature on indicators of sustainable development, the following classification can be made (Table 1). The vast array of resulting indicators can be classified into three groups: economic, ecological and socio-political. Although these three classifications have some degree of overlap, this reflects the complex and interdisciplinary nature of sustainable development. At the same time, each of these major classes used here can be further sub-divided into single or aggregate indicators.
Table 1. - A classification of indicators of sustainable developmentTYPE / GROUP / EXAMPLE/UNITS / STUDIES
Ecological
Single / 1. Air quality
2. Air quality
3. Water quality
4. Soil erosion / NOx ppm
SOx ppm
DOC mg/l
tonnes/ha/yr / DoE (1996b) or UNEP (various)
Aggregate / 5. Net Primary Productivity (*)
6. Environmental Space (*)
7. Ecological Footprints (*) / energy/m2 or tonnes/ha
varied
ha/person / Vitousek et al. (1986)
FoE Europe (1995)
Rees and Wackernagel (1994)
Economic
Single / 1. Consumption per capita
2. Real wages
3. Unemployment / $/person
$/person
no. Unemployed/region / Scottish Office (1996)
Aggregate / 4. Green Net National Product (*)
5. Genuine savings (*) / $
$ / Hartwick (1990a)
Pearce and Atkinson (1993)
Socio-Political
Single / 1. Mortality
2. Literacy / Deaths/1000
literacy rate/1000 people / WRI (various)
World Bank (1995)
Aggregate / 3. Index of Sustainable Economic Welfare (*)
4. Genuine Progress Indicator (*)
5. Human development Index / $, or $/person
$, or $/person
index / Daly and Cobb (1989)
Cobb et al. (1995)
UNDP (1990)
(*) Indicators selected to assess Scotland sustainability
In order to carry out an empirical analysis of Scotland's sustainability from 1980 to 1993, Moffat et al. (1994) selected seven indicators which would represent each of the mentioned three main groups that appear in Table 1 and for which data were available. While this mean that some potentially useful indicators were excluded, on the other hand it is important to point out that presenting results for a very large number of indicators could sometimes lead to a more confusing picture.
· Economic Measures
- Green Net National Product (green NNP): It shows the maximum we can consume in the present period without reducing future consumption: if green NNP is rising then, an economy is becoming more sustainable. In order to calculate the green NPP figure for any year, depreciation in all forms of natural capital (valued using the difference between price and marginal cost), and changes in pollution stocks, valued at marginal abatement costs, are both deducted from official estimates of Net National Product. Then, the mathematic expression of this indicator is:
Green NNP = NNP - Natural Capital Depreciation - Pollution Abatement Costs
- Genuine Savings (GS): Proposed in 1993 by Pearce and Atkinson, this indicator tests whether a country is following the Hartwick rule[1], by comparing the savings rate with the sum of national income. If all savings are reinvested in these two forms of capital, it is argued, then the aggregate capital stock will not be falling, and a constant consumption stream can be maintained. The GS measure is thus given by:
Genunine Savings = ( S / Y ) - ( dM / Y ) - ( dN / Y )
where S is savings, Y is income, dM is depreciation of manmade capital (KM) and dN is depreciation of natural capital (KN). There fore, if the indicator is zero or greater, this means that the economy's investments are able to absorb and even overcome the depreciation in both manmade and natural capital, which is considered to be synonymous with SD.
· Socio-political Measures
- Index of Sustainable Economic Welfare (ISEW): This index was proposed by Daly and Cobb in 1989 as a better means of measuring welfare changes in an economy. The approach is to adjust elements of the conventional national accounts for wider determinants of welfare. These adjustments include an estimate for non-monetarised contributions to welfare (e.g. the services derived from unpaid household labour); deducting thouse public expenditures that are defensive (that offset environmental degradations) in nature; and net capital growth (an adjustment to account for the changes in the stock of the cost of environmental damage); and an estimate of the costs associated with the loss of natural capital such as wetlands. This can be represented by: