MPs and Peers call for evidence on aligning economic goals with sustainability
The Environmental Audit Committee is calling for views on revising the traditional measure of UK economic prosperity to take greater account of natural capital and environmental sustainability.
The Committee will hold two hearings in early 2022, as a preliminary high-level investigation into this issue. It is seeking written evidence to inform these hearings.
There are growing calls from economists and environmental scientists, such as the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), for current measures of economic progress to be developed to reflect the importance of sustainable development.
The current primary measure—GDP growth—is often presented as a proxy for economic prosperity. Critics argue that GDP only measures current flows of investment and consumption and does not measure stocks of human or natural capital.
Professor Sir Partha Dasgupta’s recent review of the economics of biodiversity, conducted for the Treasury, concluded that because GDP does not account for the depreciation of natural assets, it encourages the pursuit of ‘unsustainable economic growth and development’.
Further, in October 2021 at COP15 (UN Convention on Biological Diversity), the UK adopted the Kunming Declaration which committed states to “work across our respective Governments to continue to promote the integration, or mainstreaming of the conservation and sustainable use of biodiversity into decision-making including through… economic accounting…”.
The Committee’s recent report, ‘Biodiversity in the UK: bloom or bust?’ called on the Government to detail how it intended to move beyond GDP and develop a concept of inclusive wealth. In response the Government recognised that GDP had limitations, and that it should not be seen as an all-encompassing measure of welfare.
Environmental Audit Committee Chairman, Rt Hon Philip Dunne MP, said: “Transitioning to a green economy also involves a rethink of how we measure economic success. For decades we have concentrated on GDP growth, often discounting natural capital and environmental sustainability. This new piece of work for our Committee will consider how the Treasury can incorporate natural capital in its work, and what the benefits or challenges of doing so are.