The Cost of GDP Tackling climate change requires effort at every level, and in every area of our lives. Whilst it is great to identify those things people can do in their own individual lives and spheres of influence, there are some issues which are much more systemic and require wholescale government and industry changes. How we assess value using GDP, our go-to measure of economic performance, is perhaps the issue most in need of change. Simon Kuznets, one of the men who invented GDP, was aware of its shortcomings, saying in 1934: “The welfare of a nation can scarcely be inferred from a measurement of national income.” And in 1968, Senator Robert Kennedy famously told Congress: “The GDP includes air pollution and advertising for cigarettes… the destruction of the redwoods and the death of Lake Superior. “It does not allow for the health of our children, the quality of their education or the joy of their play. It measures everything, in short, except that which makes life worthwhile.” GDP however, remains the first, and often only, statistic given to describe whether our economy, and by inference the quality of our lives, is good, bad or indifferent. This is in part because it is relatively easy to count, and it does tell us something useful. However, it doesn’t tell us everything, and there is a growing concern that we should either find another broader measure to compare alongside it, or change the measure altogether. In the richer nations we over-consume. It has often been pointed out that people operate as if we had three planets’ worth of resources. The Costanza report in the late 1990s shed some light on this. It attributed a monetary value to things like fresh clean water, or soil fit to grow crops in, or clean breathable air. The report gave a value of all of Earth’s natural functions essential to human and animal life, functions which we largely take for granted or ignore. The figure was roughly twice the value of world GDP at that time. Is the fact we only record and count one third of the things we need, the reason we think we can fit three planets in one? This is the fundamental failing of GDP. It only counts the third we have created. It doesn’t count the two thirds we may or may not have destroyed in creating it. On a local level, think of a company making money by creating a product, but when they pollute a river with the waste they don’t pay for it. The product has a market value, but the river doesn’t, despite actually having a ‘cost’. Sometimes that cost is picked up by the taxpayer, or by future generations in trying to clean it up, but the company can ignore it and declare itself ‘profitable’. However, the idea of ignoring damage and pollution is not sustainable. Recognising that our rivers are full of plastic and chemicals, that our atmosphere is dangerously full of carbon dioxide, that soil is running out, and that our current consumerism is undermining the very fabric of the planet, we can no longer afford to ignore this damage. Ideally, we should cost the damage caused every time we ‘make’ something and if the damage is more than the ‘cash value’ it’s clearly not sustainable. As governments wake up to the need to tackle climate change, and perhaps for the first time in human history, learn to be sustainable, we are going to have to stop ignoring the damage, and start to cost it on the bottom line. Trade restrictions and legislation have already started to incorporate this – most recently through the changes to the Public Services (Social Value) Act. More laws will appear, nationally and internationally. The most significant of which is the campaign for global recognition of a law of Ecocide, opening up the likelihood of increased litigation, haunting those industries and organisations which have caused the most damage, especially those who have done least to mitigate it. The value and availability of resources will change too, through scarcity, but also hopefully through enlightenment. The world is changing whether we like it or not. By understanding why and how these changes are likely to manifest themselves, we will be better prepared to tackle them, and avoid making future mistakes. But we need to begin by acknowledging, costing and caring about the damage we are doing.