Statisticians can help save the world – but they only have 396 days
Convenor of the Green Economy Coalition. ‘Convenor’ is a carefully considered title to reflect network leadership, inviting people from diverse institutions and networks to work together, and enabling them to influence collectively.
Visiting Professor at the Department of Mathematics, Imperial College London, is now researching and writing on national wellbeing – how a country is doing these days and how sustainable it is – having retired from a career of almost 40 years in the UK Government Statistical Service. In his final post he founded and directed the Measuring National Wellbeing programme at the Office for National Statistics.
He previously spent 7 years leading WWF's sustainable business and economics work and has been a corporate strategy consultant for Booz Company and a senior strategy advisor for the BBC World Service. He has degrees in engineering and in business and has worked with many organisations and cultures for social, environmental and economic value.
The climate change debate is split between those arguing for enviromental sustainability and those on the side of economic growth. But it shouldn't be an either/or choice. Environmentalist and economist Oliver Greenfield challenges statisticians to provide the measures that are needed to balance these twin demands; statistician Paul Allin replies.
In September 2015 the world's governments will meet in New York to finalise and agree the Sustainable Development Goals – the successor to the Millennium Development Goals. What is different and potentially transformative about these new goals is that they are universal. They will measure the development performance of all nations: from the US to Angola, from China to the Czech Republic, no country will escape international performance scrutiny.
Climate is in there as a priority goal, alongside energy, poverty eradication, health, population, water, ecosystems, marine, industrialisation, economic growth, and promoting equality – indeed, all the measures of both sustainable and unsustainable ways of living. Get these goals right and they could unleash not only the national plans to collaborate on the world's priorities, but they could also start to align markets and businesses to society's needs.
At present though, the arguments are too often about setting these priorities against one another. We need economic growth, and growth needs energy, so we must sacrifice climate stability. Populations need water, so ecosystems must give way; or, from the opposite perspective, we need to protect the planet, so there must be a limit to economic growth. How can we escape from this impasse?
The answer, as I see it, is to start measuring what matters. And what matters most is the quality of our lives. If we can all live well – and if we know how to measure that wellbeing, and how to describe numerically the quality of life, both today and in the future – then we can break through the haze of discourse on sustainable development, the green economy and the green growth agenda to make sustainability real, personal, and – ultimately – achievable.
There is an old piece of tech-geek witticism that goes, “I want to save the world, but I don't know the source code”. But it's my belief that measuring what matters is the source code for life. When you bring two key indicators together – the quality of life and the quality of our environment – you start to grasp the main components of the source code that lights two of the most important dials on the dashboard of indicators that should steer our development, our economics and our governance.
I first caught a glimpse of a sustainable economy when I saw the famous graph in Figure 1. It shows things clearly: If we all lived at the level of Sierra Leone, of or much of Africa – where life is hard, and deprivation great – or even of Cuba or parts of the Asian Pacific, where average human welfare is much higher – our planet could sustain us indefinitely; if we all live the lifestyles of Europe, of America, of Australia, it cannot.
The insight from this graph is important because it captures the essence of a green economy: that we need to maximise human development whilst minimising ecological footprint. It describes a fundamental new economic ratio: the most efficient new economy is the one that delivers the most wellbeing with the least environmental impact.
Since this graph was published, we have lost ourselves somewhat in arguments around metrics and measurement. There is much discussion among policy-makers on how to measure “wellbeing” – but no international consensus has yet been achieved. Similarly, there is much discussion on how to measure environmental health. Nine “planetary boundaries” have been identified as crucial. They range from the state of the ozone layer and the acidity of the oceans to the aerosols in the atmosphere and the cycle of fresh water. They add to the insights, but hugely complicate the process of simplification to reach one overarching indicator of the kind that ecological footprint – as a measurement – once offered. The footprint was simple, it was intuitive, it was understandable by everyone; but our understanding and decision making now requires data at a higher level of detail and clarity.
Despite these developments, the main concept remains intact: a sustainable economy maximises wellbeing for the majority and minimises environmental impact.
This leads me to another important point. Many of the problems we are currently encountering are due to the blinkered use of one indicator as the main policy driver – gross domestic product (GDP). A thousand things are wrong with GDP (see Significance, March 2010). They can be summed up by Robert Kennedy's famous remark made as long ago as 1968: that it measures “everything save that which is worthwhile” (see http://www.jfklibrary.org/Research/Research-Aids/Ready-Reference/RFK-Speeches/Remarks-of-Robert-F-Kennedy-at-the-University-of-Kansas-March-18---1968.aspx). A simple example is that destroying a virgin forest for timber will increase a nation's GDP, which takes no account of the social, ecological or climatic effects, as well as the loss of natural capital that this represents. At last, and not before time, many experts and policy-makers are now in search of alternative indicators to replace GDP.
What we need to recognise is that we do need new indicators (such as wellbeing and environmental health), but, most importantly, we need to use clusters of indicators, together, that articulate trade-offs or the opportunity to find multi-dimensional solutions. Maximise wellbeing. Minimise environmental impact. Create resilient economic sectors and systems. No single indicator can do this. We need clusters, clusters, clusters.
The most efficient new economy is the one that delivers the most wellbeing with the least environmental impact
We manage what we measure
I like business. I like its dynamism, its innovation. We need this innovation. But we also need functioning markets with clear rules, defined by science, not by ignorance, lazy policy and incumbent greed. We need markets that are rational locally, nationally and globally. Most importantly, we need governance at all levels of decision making - especially when those decisions have the potential to upset the balance between human wellbeing and environmental impact, which sits at the heart of a sustainable economy.
The Sustainable Development Goals should edge us towards this global ambition and rationality, which should help national governments unlock themselves from the dominance of GDP, and which in turn should start to set the new framework for sustainable markets that will reward business sustainability, giving capitalism a reboot that it needs and from which we could all benefit.
It is in everyone's interest to have healthy businesses, economy, society, environment, and individual prosperity and collective prosperity. I believe it is possible to have all of this. The source code is there, the systems are emerging, the innovation is already underway. We just need business, policy and international leadership to step up to the opportunity, resolve the residual definitions and institutionalise the dashboard.
The good news is that a data revolution is underway. Businesses, governments and international organisations are starting to measure their “success” beyond profit alone to include people's wellbeing and the health of the planet. They are using new statistical indices as part of their decision-making.
But many of the sustainability indicators that are being used – from corporate sustainability reporting and GDP alternatives, to sustainable development goals – have been developed in isolation from each other. As data becomes fragmented, it is increasingly difficult for decision makers to make long term choices with positive results for the bottom line as well as society and the environment.
Sustainability indicators have been developed in isolation from each other. It becomes harder to make the best long-term choices
The alternative is to explicitly link local and global concerns, and to tie business priorities to national, environmental, social and economic plans by finding common and consistent measures and indicators. We need greater alignment between corporate, national and global sustainability data frameworks.
We are starting to see this process of integration, with some businesses and governments agreeing on the urgent need for greater alignment between sustainability reporting frameworks. There are numerous initiatives under way at the national level. For example:
Costa Rica has recently announced a new natural capital law that aims at incorporating the valuation of natural capital in the country's environmental legislation.
The World Bank's WAVES partnership is supporting and documenting efforts in over 50 countries and businesses to introduce natural capital valuation.
There are some useful projects aiming to synthesise different data sets, which include the Taskforce for Measuring Sustainable Development (OECD, Eurostat and UNECE) and the Natural Capital Protocol.
The Intergovernmental Committee of Experts on Sustainable Development Financing, launched at Rio+20 in 2012, could help to integrate different reporting frameworks at the national and global level.
The insurance industry has worked on quantifying risks that occur due to natural factors, such as climate change effects on infrastructures needed by man. Methods and lessons learned could be shared with business.
It is critical that all the emerging frameworks understand the linkages between natural capital and poverty reduction. When drawing up new measures or establishing coherence among existing ones it is important to think of “what matters to the individual in a developing country and the individual elsewhere”.
The sustainable development goals that will be signed off in New York next September can be the guides to not only development objectives but also our sustainable and value-creating economies.
We have, from August 1st 2014, 396 days to maximise the alignment and coherence between sustainable development goals, national development measurement and corporate sustainability reports. Can statisticians help make it happen?
Thank you for sharing your timely, rousing and challenging article for Significance. I agree with much of what you say. We could debate the rigour of the Human Development Index and the ecological footprint – both have their shortcomings as measuring instruments of wellbeing and of impact on the planet – but there is no denying their strength in communicating differences between countries. Rather than just relying on headline measures, we both agree there are complex, multi-dimensional issues here that need well-chosen sets or clusters of indicators. I agree very much with your overall concern that we need to measure what matters and to act in light of what these measures tell us. And I welcome most of all your final rallying call for alignment and coherence between sustainable development goals, national development measurement and corporate sustainability reporting.
I also welcome your recognition that statisticians should play a crucial role in all of this, but my first thought was that they are already doing so. Measurement is not the stumbling block, at least in countries with developed statistical systems and well-funded national statistical agencies. (I know there is vital work under way on statistical capacity building in many other countries.) Martine Durand, chief statistician at the Organisation for Economic Co-operation and Development (OECD), has pointed out, for example, that there are only two OECD countries not collecting official measures of subjective wellbeing (see http://www.li.com/news-events/events/2014/03/21/default-calendar/launch-of-the-commission-on-wellbeing-and-policy-report), now recognised as a key component in the assessment of progress, compared with just a few years ago when there were only two countries doing this.
To many statisticians the production of wider measures is not a new issue. For example, the social indicators movement active around the 1970s led to outputs like Social Trends from the Office for National Statistics in the UK and later to sustainable development indicators. More recently, the Stiglitz–Sen–Fitoussi report1 and the EU's Beyond GDP programme (see http://epp.eurostat.ec.europa.eu/portal/page/portal/gdp_and_beyond/introduction) have prompted national statistical offices to give more prominence to a wide range of measures, from extensions to the national accounts through to time use surveys, natural and human capital measures and analyses of inequalities. All these can be used to help assess development more broadly than just relying on headline measures such as GDP.
Statisticians should not just be producers of indices and datasets. They need to find out what matters to people and design their output around that
But, actually, you are right. Statisticians should not just be producers of indicators, data sets, statistical reports. There are four other things to do. First, we need to find out what matters to people – and design our data collection and formulate our outputs around that. This means talking to people, civil society organisations and businesses: not just to experts or to parliamentary commissions, but to all of us. If measures other than GDP are being recognised as important, we should supply those measures. Stiglitz, Sen and Fitoussi encouraged “national roundtables”. The UK (see http://www.ons.gov.uk/well-being) and Italy (see http://www.misuredelbenessere.it/fileadmin/upload/Report_on_Equitable_and_Sustainable_Wellbeing_-_11_Mar_2013_-_Summary.pdf), for example, have each demonstrated how this can be implemented in the most inclusive way.
Second, statisticians must ensure that they design their outputs to meet policy and business needs as well as supporting public debate. The real point here is that the outputs must be used. It is paramount that people use the measures the statisticians develop, or else this is all an interesting but ultimately pointless exercise. So, more talking is needed with users and prospective users, sharing ideas and developments, signalling that new measures are being produced – and signalling how they are meant to be used. The days of seeing the production of nicely drafted and illustrated statistical reports and websites as the final stage in the statistical process are over: statisticians need to ensure that their measures of wellbeing, progress and sustainable development are used.
Third, statistical outputs must be accessible and usable, as well as useful. No prizes for guessing that this again calls for engagement with users and potential users, with further opportunity to promote the use as well as the existence of indicators relevant to sustainable development. The internet exists, and is a very obvious tool for this.
Finally, like you, I realise that this means that we statisticians need to take part in debates about national and corporate sustainable development, wellbeing and progress. This is not just to act as producers of individual data sets but, importantly, to emphasise that, across all these issues, there is a common core, a dashboard of key indicators. Having secured that, then we can sensibly build any more detailed measures and metrics needed to support individual policy and operational areas.
A huge web of international committees, consultation and technical development work is already in place, reaching across standards for national accounting, sustainable development goals, beyond GDP and environmental accounting. However, continuing to take each initiative forward separately brings risks of duplicating effort and resources, creating confusion rather than clarity. To miss the opportunity to establish a core to this web – to provide commonality and the big picture of development, wellbeing and progress – could well mean that we miss out on making a real difference to people's lives and wellbeing around the world.