Time to think beyond the economy – is GDP the right target?

Policy should focus on wellbeing, opportunity and sustainability.

This week David Cameron launched the Big Society bank and sparked a new round of debate on whether "money makes the world go round" or "the best things in life are free". The Big Society is seen by some as a political cover story for cuts to public services but the idea behind it questions whether there is more to society than just the bottom line? Whether the pursuit of happiness is about more than money? Whether doing you bit, gives your life its meaning, rather than the job you do or the things your own?

Given Britain’s gloomy economic climate, the worst unemployment since 1995 and further cuts to public spending in the pipeline, our ‘age of austerity’ seems all encompassing. But back in 1968, Robert Kennedy famously questions whether GDP was the right measure of a healthy economy and of a good society:

The Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.

More than forty years on, politicians are still asking those questions.  A new report published by IPPR today report suggests policy should focus directly on wellbeing and range of the opportunities that people have. It concludes that every effort to rethink economic policy should be motivated by a consideration not only of "what works" but also of "to what ends".

Clearly there are reasons why GDP has remained for so long the primary measure of economic success. Governments have long taken the view that by promoting GDP growth they help a majority of the population achieve better lives. Historically a strong correlation existed between GDP, disposable income and employment. This provided greater access to material wealth; more desirable cars, houses, clothes, and the latest household and personal gadgets. But despite the advances brought about by GDP growth, there is a growing consensus among politicians that GDP on its own is no longer sufficient and our wellbeing does not just come from income, but from a wide range of sources.

On the other side of the pond, significant headway in measuring national wellbeing has been made in Canada with the Canadian Index of Wellbeing. It is an attempt to capture the quality of life experienced by Canadians. Here in the UK, the ONS launched a consultation exercise to find out what really matters to people from the people themselves. This found that family, friends, health, financial security, equality and fairness are fundamental in determining wellbeing. These initiatives should be encouraged and continued so we can identify what matters to people and how best we can directly support these areas.

By targeting wellbeing and opportunity we speak to the wider concerns of the population. We ask how people are doing before we ask how the economy doing? We recognise that there is "life beyond the bottom line" and that worthwhile lives extend beyond what we earn and consume. The big question that remains, is how to conclude a political consensus around wellbeing, opportunity and sustainability?

Amna Silim is a Researcher at IPPR

David Cameron launches The Big Society Capital fund at The London Stock Exchange. Photograph: Getty Images.
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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.