The Fourth Biennial Conference of the Canadian Society for Ecological Economics: Ecological Sustainability of the Global Market Place, August 2001, Montreal, Quebec MEASURING THE SUSTAINABILITY OF NATIONS: THE GENUINE PROGRESS INDICATOR SYSTEM OF SUSTAINABLE WELL- BEING ACCOUNTS

Current national income accounting systems and measures of progress, like the Gross Domestic Product (GDP), fail to measure the real “economic” state and real “wealth” of nations. While GDP may be an excellent measure of the cash flowing (chrematistic) in societies it is actually a poor “economic” measure. The word “economic” comes from the Greek oikonomia, meaning the stewardship or management of the household; the word “wealth” comes from the Old English meaning the condition (th) of well-being (weal).” If we are to measure genuine “economic conditions” then new tools (beyond monitoring cash flow) are required in order to achieve both the spirit of sustainable development (SD) that is to improve or sustain the conditions of well-being. The Genuine Progress Indicator (GPI) System of Sustainable Well-being Accounts was developed by researchers at the Pembina Institute for Appropriate Development as a new tool for measuring and monitoring the “condition” of natural, social, human and produced capital of nations. The model attempts to combine the best of several models for measuring well-being and SD including: the UN’s Human Development Index, the ISEW/GPI, the World Bank’s total wealth (genuine savings) accounting, natural resource accounting models, ecological footprinting, and indices of quality of life (Miringoff’s Index for Social Health). Applied for the first time to the province of Alberta, the Alberta GPI Accounts provide a kind of full “health and wellness” diagnosis of the province using 51 measures of Alberta’s economic, social, human health and environmental condition from 1961 to 1999. The accounts track the physical, qualitative and monetary (full costs or benefits) of total capital in an integrated total well-being accounting framework. Like the U.S. GPI, developed by Cliff Cobb for Redefining Progress (Oakland, CA), and its predecessor, the Index for Sustainable Economic Welfare (ISEW) (see Daly and Cobb, For the Common Good, 1989), the Alberta GPI accounts include a GPI “net sustainable income statement” which makes adjustments to the GDP for the value of unpaid work, regrettable social, human and environmental costs (expenditures), and the depreciation costs of natural capital depletion and environmental degradation. This paper explores the GPI Well-being Accounting model, in terms of its strengths, weaknesses, and opportunities for measuring the sustainability of the real wealth of nations. The paper also explores GPI accounting as a fiscal policy tool and for guiding sustainable “development.”