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Measuring What Matters

As governments prime the pumps of economic recovery, they must change the yardsticks by which they measure human progress and welfare. Otherwise, their investments risk further fueling the inequalities and environmental destruction that prepared the ground for the COVID-19 pandemic.

KIGALI – As many as 150 million people globally, roughly the combined population of Canada, France, and the United Kingdom, may have fallen into pandemic-induced extreme poverty over the past year. Partly as a result, governments are currently pumping unprecedented amounts of money into their COVID-19 response, spending over $14.6 trillion on rescue and stimulus measures in 2020 alone.

But a recent report by the United Nations Environment Programme and the University of Oxford indicates that only 18% of current recovery investments can be considered “green.” That’s a problem.

As governments prime the pumps of economic recovery, they must change the yardsticks by which they measure human progress and welfare. Otherwise, their investments risk further fueling the inequalities and environmental destruction that prepared the ground for the COVID-19 pandemic.

Environmental degradation and increasing contact between wildlife and humans enabled SARS-CoV-2, the virus that causes COVID-19, to jump from animals to people. And the conditions the virus encountered – shaped by vast social inequities – enabled it to erupt into a pandemic with devastating health, social, and economic consequences.

Even in countries that have stated their intention to address both environmental destruction and inequality, rescue packages are dominated by spending that supports unsustainable pre-pandemic economic activities. These misguided investments reinforce the conditions that got us here in the first place.

For example, countries such as India, Canada, South Africa, and China have set aside funding for green recoveries but are simultaneously propping up their fossil-fuel industries. While China has put forward an ambitious green recovery plan, construction of coal plants in its provinces surged in the first half of 2020.

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South Africa has earmarked $3.5 billion of investment in three new energy projects that will ostensibly “reduce the use of diesel-based peaking electrical generators.” But the state-owned electric utility, Eskom, previously built the world’s third- and fourth-largest coal-fired power plants. The industrial region around Middelburg, with a population of 4.7 million, includes 12 coal-fired power plants and a huge refinery that produces liquid petroleum from coal. This facility generates more greenhouse-gas emissions annually than entire countries such as Norway and Portugal. Respiratory diseases in the region likely cause more than 300 premature deaths per year.

Other unsustainable activities – such as destroying forests, plowing and paving grasslands, and polluting fresh water – continue unabated. These natural resources sustain billions of people. They account for 47% of the rural poor’s household incomes in India, nearly 75% in Indonesia, and 89% in Brazil’s northern Amazon. Over 70% of people in Sub-Saharan Africa depend on forests and woodlands for their livelihoods.

To correct our course, we must change the way we measure human development and social progress. Without the right signposts, we will be unable to achieve the transformation our economies and societies must undergo to ensure our survival. National gross domestic product, the most widely used economic-development measure, is useful and provides a great deal of information closely related to human welfare. But it offers no guidance regarding how to avoid unsustainable and unequal outcomes.

Fortunately, as countries plan their post-pandemic recovery expenditures, they can consider a new tool: the Planetary-Pressures Adjusted Human Development Index (PHDI) developed by the United Nations Development Programme and its partners.

The PHDI is a gauge of human progress that accounts for poverty, inequality, and planetary strains. It measures not only a country’s health, education, and living standards, but also its carbon dioxide emissions and material footprint. The resulting index gives policymakers an indication of how development priorities would change if the well-being of both people and the planet were central to defining humanity’s progress.

Using this approach, more than 50 countries drop out of the very high human development group based on UNDP’s standard Human Development Index, while countries like Costa Rica, Moldova, and Panama rise at least 30 places. Planning that conserves nature would improve the well-being of billions of people.

Some might argue that GDP is a well-established universal yardstick, and that the PHDI is too complicated for countries facing urgent and competing development priorities. But the new index enables us to identify and measure the sustainability problem, and offers a clear alternative to relying on one main indicator – GDP – as a gauge of a country’s progress.

Without a different approach, we risk inviting the next pandemic by widening inequities and deepening the environmental crisis. The two go hand in hand. And when disaster ultimately strikes, the best we can hope for will be timely humanitarian relief.

Instead, governments should adopt new measures to address the environmental crisis and growing inequality, and make these part of a longer-term strategy that begins now. By measuring what matters, governments will be able to deliver recovery plans that strengthen green stewardship and reduce inequities, improving the prospects for a healthier and more prosperous future for all.