The Distraction of

Economic Growth
Striving for continued growth of the Gross Do-
mestic Product (GDP) can lower living stan-
dards. A new indicator, which captures well-
being and sustainability, is being developed to
guide decision making.
In the modern world, the ways in which we mea-
sure success have become increasingly important.
These performance measures, like GDP, infuence
the decisions we make from a personal level right
up to an international level. What if these mea-
sures are inadequate?
In short, GDP is the total value of all goods
and services produced in a country and is tradi-
tionally considered to correspond to quality of
life. However it only measures economic activ-
ity and so doesnt capture quality of life directly.
So growing the GDP can, in some cases, actually
decrease well-being. For example the decision
to protect a forest from logging can be seen as
a choice between economic output and environ-
mental protection. From a GDP point of view
its a no-brainer, but there is also a loss to the
ecosystem which GDP does not capture.
The Index of Sustainable Functionality (ISF)
is a new and more comprehensive performance
measure developed by Professor Jorg Imberger,
Director of the University of Western Australias
Centre for Water Research. The ISF is aimed to
combat the shortcomings of measurements like
GDP by looking at an asset, like the forest to be
logged or protected, and measuring its function
from the point of view of its various uses.
One use of the forest might be for logging, but
another might be to provide a suitable area for
eco-tourism. The ISF takes into account all of
these uses, and measures each of them in an ob-
jective way. For example, to measure the useful-
ness to logging, the number of trees suitable for
logging can be used. The local community is then
consulted about which uses are more important.
These uses are given a higher priority in the cal-
culation of the index, which is ultimately a single
number. By objectively evaluating each of the
functions of the forest, it becomes a very simple,
unbiased measure says Professor Imberger.
Another issue that the ISF is aimed to solve is
the issue of rising inequality. In many scenarios
growth in GDP and inequality can actually lead
to the average person being worse on. The com-
munity determine what is important in the ISF,
so their interests are more directly served, rather
than indirectly through the economy.
The goal of this work is to spur a shift in think-
ing where measures like the ISF are be used to
guide decision making. Professor Imberger would
like to see the evening news contain an ISF sum-
mary along with the hnance report. With the
general public engaged, there would be greater
support for activities that beneht well-being and
sustainability, but do not prioritise economic out-
put. To facilitate this engagement, Professor Im-
berger wants to see the ISF and the measurements
used in its determination to be easily and freely
available.
References
Andrich, M. A., Imberger, J., & Oxburgh, E. R.
(:oo). Raising Utility and Lowering Risk through
Adaptive Sustainability: Society and Wealth In-
equity in Western Australia. Journal of Sustain-
able Development, ().
Andrich, M. A., & Imberger, J. (:o). The enect
of land clearing on rainfall and fresh water re-
sources in Western Australia: a multi-functional
sustainability analysis. International Journal of
Sustainable Development & World Ecology, :o(6).
Andrich, M. A., Imberger, J., & Oxburgh, E. R.
(:o). Inequality as an obstacle to sustainable
electricity and transport energy use. Energy for
Sustainable Development, ,(), :.
Imberger, J., Mamouni, E-A.D., Anderson, J., Ng,
M-L., Nicol, S. & Veale, A. (:oo,). The Index of
Sustainable Functionality: A new adaptive, multi-
criteria measurement of sustainability: Applica-
tion to Western Australia. International Journal
of Environment and Sustainable Development, 6(),
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Does information like this refect the well-being of the people and the sustainability of the economy?