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Session 3 Breakout Session Key Needs and Ways Forward WORKSHOP - PANEL 1 Session 3 Breakout session Key needs and ways forward WORKSHOP - PANEL 1 Carlos Figueiredo Environment Ministry, Portugal Insights on New Measures of Progress Good morning to everybody! First of all, I would like to thank the organizers for the Portuguese case of a specifi c indicator, the of this conference for inviting us to participate in Adjusted Net Savings (ANS). this workshop. This indicator is based on national accounts and My name is Carlos Figueiredo and I work at the is consistent with the capital approach to sustain- Portuguese Ministry of Environment, Spatial ability, i.e. the notion that future well-being can Planning and Regional Development. only be maintained if the wealth-producing asset base is preserved. This presentation was prepared with the support of a technical team listed here. This indicator is built upon the National Net Saving (NNS), which considers only the depreciation of built I would like to focus on three main questions. capital and attempts to include the net changes in both human and natural capital, thus providing a Firstly, what do we know about the different indicators measure of an economy’s genuine savings. that are linked to the well-being? Besides we should analyse some empirical results relating to GSI. In this way, The ANS indicator corresponds to the concept of weak sustainability (WS). Secondly, what do we want ? We want a new generation of indicators that should include the All values of those indicators are monetarized. environmental issues in complementing the GDP. Thus the aggregation is easily achieved by add- ing up the different values considered in the ANS Thirdly, what should we do? We should mobilize the algebric expression. different statistical institutions and also their main stakeholders to provide a set of complementary This is a real advantage to interact with the policy indicators with GDP. makers and to communicate to the general public. The limitations of GDP and other traditional eco- This concept of genuine saving was considered by nomic measures as indicators of welfare are well- the World Bank to organize a set of data for all known. Moreover, such measures do not show countries that allow international comparisons. whether the economic system is on a sustainable path or not. Indicators that go beyond GDP are Based on data computed by the Environment needed to support better decision making. Department of the World Bank, these fi gures show the path of the listed indicators as a percent- There are different categories of indicators age of GNI – Gross National Income. which can be roughly divided into monetary and non-monetary indicators. The former are generally In this way, we can see the evolution of ANS for based on corrected national accounts; while non- Portugal and the EMU countries between 1983 monetary indicators can be based on environmental and 2004. data or on socio-demographic data. In both cases the path of ANS roughly follows Although there are many indicators available, in this that of the conventional measures of GNS/ presentation we would like to focus on the analysis NNS, but the gap between ANS and NNS has 166 Beyond GDP: Measuring progress, true wealth, and the well-being of nations Session 3 – Panel 1 Breakout session: Key needs and ways forward been increasing in Portugal for over a dec- Finally, we propose that sustainability in the ade, unlike that of EMU countries, which has EU is assessed at a regional level, which will remained relatively stable. require spatially disaggregated data. This would be important for a consistent framework to sup- Workshop It is important to analyze the role of each com- port decision makers at national and European ponent in the results. The infl uence of educa- policy levels. tion expenditures (EDE) on the gap is high both in Portugal and in the EMU as a whole, but In the long term, we should end up in an estab- there was a signifi cant increase in education lished modular System of Economic and Social expenditures in Portugal from 1990 to 2004 Accounting Matrices and Extensions (SESAME), (larger than one percentage point in terms of with enough fl exibility to answer the needs of the ratio to Gross National Income). different users but that is still consistent with national accounts. As for natural capital depreciation, the Portuguese values show a smaller decrease, This is my guess on that matter! which also contributes to a larger gap. Thank you for your attention. Summarising, the gap ANS/NNS just mentioned shows a positive correlation with EDE and a nega- Feel free to put your questions and comments. tive one with depletion of natural resources and environmental damages since 1990. Now, we propose moving for- ward on several levels so that new insights can be gained in the medium and long term. Firstly, to get a better picture of genuine savings, additional natural resources and envi- ronmental damages should be included. In what refers to human capital creation, profes- sional training expenditures should be considered without dis- regarding education and training outcomes. Secondly, to improve the basic GNI measure, non-salaried time activities such as housework, vol- unteer work and leisure time need to be valued and included. Thirdly, to ensure that we are not following paths that are just weakly sustainable, a set of environmental quality indica- tors, namely for critical envi- ronmental services, should be established for international com- parisons. Indicators that refl ect ecosystem resilience, such as biodiversity, require particular precaution as the context is of huge uncertainty. 19 & 20 November 2007 167 Workshop 168 Beyond GDP: Measuring progress, true wealth, and the well-being of nations Session 3 – Panel 1 Breakout session: Key needs and ways forward Thais Corral Executive Director, Rede de Desenvolvimento Humano (REDEH), Brazil Workshop I will address the three discussion questions1 by mentality and culture, so that we can really be offering some examples, because conceptually protective of the forest. Because the way that a lot has been said. But when we see what hap- people see wealth is just using the trees in the pens in real life as a consequence of a certain opposite way for money or for cattle. perspective, it’s also helpful to see how we can move forward. And, in terms of opportunities, The second example I want to give is also some of the consequences that we are facing related to consequences, and in this case the with this narrow view of GDP are very important consequences of poverty that are not taken in showing us what can be done, but also how into account in GDP. And it’s true for most these narrow views also reveal some kind of Latin American cities, namely the question of culture that is very diffi cult to change. And the safety. opportunity now is climate, as with climate we have a limited time in which we take action. Most of our cities have a high rate of crime today and if you go to people in terms of the And I want to give you the example of Brazil and service we’re doing on perceptions, the most what has happened over three decades in the important thing for them is safety. Because Amazon. As in the seventies we had a policy of of course if you don’t have safety you don’t occupying that region. It was the policy of our have wealth, you don’t have a lot of the things military government, which was very national- money can bring no matter at what level. And ist, and as a consequence of that people were on the basis of that, several cities starting with given subsidies to occupy the forests. So most Bogotá started a movement which was called of this was done just by chopping down the Bogotá ‘como vamos’, and then we had ‘Rio trees and putting cattle there, which was the How We Are’, and Sao Paulo, ‘Our Sao Paulo’. easiest way to get hold of the subsidies. Over And the idea is to match the perception with the years the consequence of that was major the statistics that are available and make them occupation of the Amazon, 30% of the forest usable for people, so that they can not only act was destroyed. And today it goes on because themselves but create a dialogue and a mobi- this trend still continues. So Brazil now occupies lisation that can be translated into action and the 16th position in terms of a global produc- can involve politicians and mayors. And there tion of greenhouse gases and 75% of this is are goals for the mayors. In the case of Bogotá produced by deforestation. The Amazon alone after ten years of this movement the situation is responsible for 3% of the global greenhouse in the city has totally changed. And I think this emissions and at the same time produces only shows us how indictors can be used by people 0.1% of our GDP. So now of course Brazil wants and produce change, because after all this is to change that perspective urgently and also what we want. doesn’t want to be seen as the villain on the global scene. We are changing; we are start- In an attempt to do that, in 2003 together ing to implement now a new law from 2006 on with Hazel Henderson and the corporate social incentives. It takes an opposite approach by responsibility movement of Brazil, statisticians, giving people a kind of salary to protect and policymakers and a lot of grass roots organisa- to maintain the standing forests, to maintain tions and social entrepreneurs, we organised the trees.
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