2014-08-28

Co.Exist

What Would GDP Look Like If It Considered That Industry Tends To Destroy The Planet?

Shockingly, the news isn't bad.

Considering that it's the basic yardstick by which we measure the health of our economy, gross domestic product (GDP) is pretty flawed. Critics have pointed out for decades that GDP fails to measure consequences of industry, which can in turn impede economic growth. (Think about, say, climate change, which promises to eviscerate certain cash crops.) GDP just doesn’t tell the whole story.

But what if we factored air pollution into the equation? What if we actually calculated the premature mortality rates, the amount of reduced timber and crops, and the cost of chronic illnesses like bronchitis and asthma that arise from industrial production? Instead of showing something dismal, Middlebury College professor Nick Muller did the math in Science and found that, between 1999 and 2008, the augmented measure of GDP has been growing faster than GDP alone.

Flickr user Emilian Robert Vicol

Wait, wait. What? Yes. If you consider the huge decreases in emissions over the last 20 years, the external costs of air pollution today don’t curb the gains as much as they did in 1999. By Muller’s estimation, America has actually been missing an opportunity to pat itself on the back.

“Markets are not putting prices on particulate matter that comes out of smokestacks or tailpipes. It’s just not what markets do,” Muller says. “It’s nice to think about a measure of welfare that reflects those.”

Of course, because GDP is sort of arbitrary, Muller’s augmented GDP is sort of arbitrary, too. A GDP that considers air pollution still doesn’t consider plenty of other factors of economic and social well-being. (You can see GDP-esque estimates that try to here and here.) But if we’re relying on a dumb linear equation (yeah, I went there) to assess a complex web of cause and effect anyway, why not add some measure of consequence? We might find out that we have more reason to congratulate ourselves after all.

[Top Photo: Flickr user Devra]

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3 Comments

  • Rich Persoff

    Please have the brains not to illustrate a pollution article with water vapor (steam) from power plants.

  • Bhutan and Costa Rica have proposed (and presented to the UN) the Gross National Happiness Index as an alternative to the unsustainable consumption index (GDP) that is driving climate change. resource depletion and profound inequality.

  • Improvement is relative to where the starting point lies, if we take the planet beautiful and intact as base nothing is positive about the way we've been growing GDP