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29. World models to sustain Earth

Lead Papers


Vassily A. Agaphonoff, Dr. Peter Bartelmus, Ronald Colman, Karine Danielyan, Dr. John C. Dernbach, Dott. Giuseppe Di Vita, Germain Dufour, Dr. Hans W. Gottinger, Raghbendra Jha and K.V. Bhanu Murthy, Dr. Tao Jiyi, Dr. Gennady N. Karopa, Natalia Knijnikova, Elizabeth(Beth) Lange, Tonu Lausmaa, Ming Lei, Ngo Louga Madeleine, Igor N. Malakhov, Dr. Sue L.T. McGregor, Kulik Mikalai, Michal SKAPA, Daniel Sotelsek

Colman explained how the GPI measures of well being, prosperity and progress that explicitly value the non-material assets that are the true basis of our wealth, including the strength of our communities, our free time, the quality of our environment, the health of our natural resources, and our concern for others. The means to do so exist. In fact, tremendous progress has been made in the last twenty years in natural resource accounting, social indicators, time-use surveys, environmental quality measures and other means of assessing well being and quality of life. We are capable of measuring our progress in a way that accords with our shared values and lets us know whether we are moving towards the society we want to create. After three California researchers developed a Genuine Progress Indicator in 1995, incorporating twenty-six social, economic and environmental variables, four hundred leading economists, including Nobel laureates, jointly stated: "Since the GDP measures only the quantity of market activity without accounting for the social and ecological costs involved, it is both inadequate and misleading as a measure of true prosperity. Policy makers, economists, the media, and international agencies should cease using the GDP as a measure of progress and publicly acknowledge its shortcomings. New indicators of progress are urgently needed to guide our society. The GPI is an important step in this direction." Here in Canada, GPI Atlantic, a non-profit research group, is now developing a Genuine Progress Index for the province of Nova Scotia that Statistics Canada has designated as a pilot project for the country. It is designed as a practical policy tool that is easy to maintain and replicate, that can accurately measure sustainable development, and that can provide much needed information to policy makers about issues that are currently hidden by our economic statistics. The Nova Scotia GPI assigns explicit value to our natural resources, including our soils, forests, fisheries and non-renewable energy sources, and assesses the sustainability of our harvesting practices, consumption habits and transportation systems. It measures and values our unpaid voluntary and household work, and it counts crime, pollution, greenhouse gas emissions, road accidents and other liabilities as economic costs, not gains as at present. The index goes up if our society is becoming more equal, if we have more free time, and if our quality of life is improving. It counts our health, our educational attainment and our economic security. It attempts, in short, to measure that which makes life worthwhile. It is common-sense economics that corresponds with the realities of our daily lives as we actually experience them.

 

Danielyan explained that the Human Development Index, used by UNDP, should be supplemented by the "social indicator" (e.g. the population poverty index, which has been developed by UNDP and presented in the Human Development Report for 1997), and the "integral environmental indicator". The obtained variant will be the most appropriate one among the existing quantitative evaluations of the situation in a country from the point of view of Sustainable Development. On demand of UNDP representative office in Armenia, such technique was developed by us in 1995. Integral environmental indicator Pe is formed by two generalized indicators: the indicator of environmental state of a territory (A) and the indicator of environmental evaluation of human activities (B); in general, Pe is formed on the base of 21 environmental indicators. Pe = (A + B)/2 = (- SumAs /4 - SumBs /4 + SumBt /2 – B7) /2, where s varies from 1 to 4 and t – from 5 to 6 (1). With consideration of the given forth constituent (SHDI = HDI + Pe) the Human Development Index may already be qualified as Sustainable Human Development Index.To certain extent it can be asserted that Pe makes it possible to evaluate the portion of the contribution made by countries into the general environmental degradation on the planet. Thus, Pe of Armenia, which is equal to 0,427 (the limits are 0 and 1) may indicate the following: the country is included into the group of countries, whose environmental characteristic is entirely adequate to the general situation on the Earth and almost does not diverge for either the better or the worst.

Gottinger  analyzed sustainability concepts, such as sustainable growth, sustainable development and sustainable resource use, in terms of conventional neoclassical economic theory, emphasising sustainability on a macro vs. micro scale. It then tries to analyse why free market forces may not achieve sustainability, and how policy intervention may help or hinder sustainability. We set out a general model depicting stocks and flows of economic and environmental variables such as capital, labour and natural resources (hereafter abbreviated to just „resources"). Each variable consists of many different categories, and weights such as prices or natural resource accounting values are needed to calculate aggregate stocks and flows of variables. General interdependencies are pointed out, such as the effect of resource and pollution stocks on output („environmental productivity") and on welfare (environmental amenity).

 Lausmaa described a model where one gets that the right to share global natural resources and dispose of waste depends on one’s contribution to the global technological progress. It means that the consumed amount of natural resource should be less than the total resource saving through the development of a more efficient production technology. High consumption level assumes a high rate of technology progress. As to the principle of global equity, everyone should have an equal access to the natural resources on the Earth, but no one has the right to use them as one may like. Limits and constraints should be put on both absolute consumption and the technology to be used. Limits to absolute consumption, described and worked up in detail in [8], is a necessary measure to keep the use of some resources in renewable level. But it is by far not sufficient as there are always production processes, relying in principle on exhaustible resources and therefore the needed accelerating rise in efficiency is a must. It is important to emphasise that if the total consumption in absolute value of some commodity or service goes up, it is not a sure token of the production process being unsustainable. The consumption decrease per capita due to the efficiency increase may be sufficient to guarantee the sustainability. As to the sustainable impact to the environment, it should be less than the natural restoration ability - nature should be able to restore the initial balance (the total tree cutting rate in a certain area should be less than the natural growth in that very area).

Talking about sustainable economy, it is very important to emphasise that sustainable economy is nothing static that can be used outside the realm of concrete conditions, it is based on. In reality, the sustainable economy covers a dynamic process, valid only under the concrete conditions, this very economy under consideration is run. Stagnation is the worst enemy of sustainability. Putting it in a figurative formulation (reminding one of the situations in Alice’s Adventures in Wonderland [12]): to follow the path of sustainable development, one should be on the run all the time and not only keeping the already achieved pace, but the pace should be accelerating all the time as well. Unfortunately, a free market economy is antagonistic to the sustainable economy. In spite of the rise in efficiency based on relentless competition in a free market economy, the basic philosophy of profit hunt is such that increase in consumption rate always outmatches it and the result is anything but sustainable. In contemporary world industrial practise, may be, the only economy sector, being for sure sustainable in principle, is information technology. It is well understood, comparing, for example, the size in some dozen cubic meters of post Second World War computer processors and the size of contemporary processors, taking only some cubic millimetres of space. In other areas of nowadays economy the progress has always been accompanied with such increase in consumption and over-dimensioned energy need that the overall effect is negative in respect to sustainability. In car industry, for instance, the efficiency rise in engine operation as an highly welcomed act towards sustainability is balanced by useless engine power rise to queue up the car in a traffic jam in some overpopulated town of the Western industrial world.

Sustainable economy is closely linked with the concept of information society, being characterised in terms of environmental space by high efficiency factors in respect to resource and waste dumping capacity. Following the path of sustainable economy, the efficiency factors of the economic potentials of the production processes increase steadily. Hence, the information share starts prevailing over the resource factor in the potential increasingly, and as a prospective, taking a dominant role in the potential evaluation. It means that we are approaching the information society.

 Ming Lei discussed the integrated accounting for environment and economy under the framework of sustainable development has received increased attention by the international society, since the report of the World Commission on Environmental and Development was published in 1987. This heightening interest led to the proposal contained in Agenda 21 of the United Nations Conference on Environmental and Development (Rio de Janiero Earth Summit 1992) to encourage the development of integrated system environmental and economy accounting. In China, such proposal was also contained in the following Chinese Agenda 21 which was put forward in 1993. On the basis of the United Nation’s 93’SNA and General Framework of Integrated System Environmental and Economy Accounting and Chinese National Accounting System’s reform practice, the specific objectives of this study is try to construct one simple, effective and practical integrated system of environment & economy accounting of China (CSEEA), and thereby estimate the 1992 Chinese environmental adjusted GDP (Green GDP) and assess of two major aspects of economic policy, (a) the sustainability of economy growth, (b) the structure distortion of the economy by environmentally unsound production and consumption pattern. This study is further research on the basis of our one former works on input-output accounting for natural resources-economy-environment.

 Dufour researched an developed an other indicator was developed to measure the costs of development: the Gross Sustainable Development Product (GSDP).

The GSDP is defined as the total value of production within a region over a specified period of time. It is measured using market prices for goods and services transactions in the economy. The GSDP is designed to replace the Gross Development Product (GDP) as the primary indicator of the economic performance of a nation.

The GSDP takes into accounts:

  • the economic impacts of environmental and health degradation or improvement, resource depletion or findings of new stocks, and depreciation or appreciation of stocks;
  • the impact of people activity on the environment, the availability of resources, and economic development; 

  • the "quality" of the four major quality systems and the impacts of changes in these systems on national income and wealth;

  • global concerns and their impacts on the economy; 

  • the welfare, economic development and quality of life of future generations; 

  • expenditures on pollution abatement and clean-ups, people health, floods, vehicle accidents, and on any negative impact costs;

  • the status of each resource and the stocks and productive capacities of exploited populations and ecosystems, and make sure that those capacities are sustained and replenished after use; and 

  • the depreciation or appreciation of natural assets, the depletion and degradation of natural resources and the environment, ecological processes and biological diversity, the costs of rectifying unmitigated environmental damage, the values of natural resources, capital stocks, the impacts of degradation or improvement, social costs, health costs, environmental clean-up costs, and the costs of the environment, economic growth, and resources uses to current and future generations and to a nation’s income.

  The measurement of GSDP shows that consumption levels can be maintained without depleting and depreciating the quality and quantity of services. It indicates the solutions to the problems as well as the directions to take, such as:

  •  invest in technology, R & D, to increase the end-use efficiency;

  •  increase productivity;

  •  modify social, educational programs and services;

  •  slow down or increase economic growth;

  •  remediation of components of the four major quality systems; and

  •  rectify present shortcomings of income and wealth accounts.


The measurement of GSDP also gives a proper and sound signal to the public, government and industry about the rate and direction of economic growth; it identifies environmental, health, and social quality; it identifies sustainable and unsustainable levels of resource and environmental uses; it measures the success or failure of sustainable development policies and practices; and it identifies resource scarcity. Values obtained enable us to make meaningful comparisons of sustainable development between cities, provinces, nations over the entire planet.


A status report of all physical accounts show the physical state and availability of resources and the state of the environment. Examples of the physical stock accounts are:


• minerals • oil, gas and coal • forests
• wildlife • agricultural • soils • fish
• protected wilderness areas • flow rate of water


Valuation in terms of money accounts is difficult for some non-market values such as:


* aesthetic satisfaction * air quality * water quality
* soil carrying capacity and productivity * acid rain deposition
* biodiversity * wilderness and protected areas * land productivity


GESDI can be obtained for these quality indicators that are difficult to give a money value to. Both the GESDI and GSDP are measured together and tell us about the quality and cost of development, locally and globally.
Measurements of GESDI and GSDP provide insights for the discussion of issues such as :

  •  Is the actual rate of development too slow or too fast?

  •  Are People aspects being stressed too far?

  •  Are resources and the environment managed in a sustainable manner?

  •  What forms of community and home designs promote sustainability?

  •  In what ways should social, educational, and health programs and services be modified?

  •  Is this generation leaving to the future generation a world that is at least as diverse and productive as the one it inherited?

  •  What improvements can be brought up to the quality of development?

 







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