Green GDP and the Polycrisis
Uncertainty abounds, but counting helps
GDP is the worst of all national accounting statistics, except for all of the others that have been tried. The single-minded pursuit of GDP growth is core to the story of China’s rapid development as well as its festering problems. One fun section from Seeking Truth and Hiding Facts draws a distinction between the failure of China to put together “Green GDP” statistics versus the success of the air quality measure PM2.5, focusing on the overly abstract nature of the former and the extent to which it demolished narratives of good growth versus the latter’s simplicity and concrete nature.
I was reminded of this comparison because the White House just put out a 100+ page strategy to “develop statistics for environmental-economic decisions.” The effort looks like a reasonable one, but not particularly ambitious — they say it will take 15 years to put these data together. Of course, trying to measure the value of a forest — especially when including intangible aspects of beauty — is politically contentious. And, irreducibly so. Technocrats need to understand that there is no correct, objective measure of such things that can somehow make the politics disappear. And that’s fine. Politics is just part of living in a society, not some dirty thing that should be banished.
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Despite China’s prior failure to develop Green GDP, researchers inside the country are doing some of the best work on a related idea — gross ecosystem product, GEP — which attempts to count the value of various services that the ecosystem provides. While we will never be able to account for all of the ways that we rely on our environment and ecosystems, attempting to measure systematically this reliance such as through GEP can provide some assistance in dealing with the uncertainties of the polycrisis.That is, putting effort into considering what our rivers provide for us can improve awareness about what might happen should they dry up in a drought as happened around the world in the summer of 2022, whether it’s France losing nuclear power, Germans unable to ship coal, or China losing hydropower.
However, GEP estimates of, say, the transport value of a river will follow market rates for next best alternatives, which makes some sense as an economic exercise. But, critically, in most circumstances, there is no actual ability to shift to some hypothetical market transport mechanism should the rivers run dry. There is no untasked set of trains, trucks, or other vehicles that are prepared to actually move X objects Y distance when needed. As such, the actual estimates of the value of a given ecosystem service are likely radically underpriced, because if it were to disappear in a moment, there is insufficient reserve capacity to replace it. And normal market prices for substitutes for that service would disappear in the face of a step change in demand.
So, one could simply reject the enterprise. After all, how can we quantify the value of a whale? What can replace the majesty of seeing the largest animal to ever grace this planet and hear its songs echoing? But with drought-stricken California suddenly reeling from flooding and all of the failures this summer from droughts and storms, getting our arms around the complex linkages and dependencies that our collective human civilization has wrought and the ways it is vulnerable is incredibly important work. And GEP provides such a framework. Yes, uncertainty will dominate but counting helps.
This is the first of what I hope to be a much more regular series of posting this spring.
Are we really going with polycrisis? Yes Davos ruins everything, and the world doesn’t seem so “crisis-y” right now, so it’s easy to take potshots at this term. But I thought this by Dominik Leusder is reasonable. Also the discussion on the Trashfuture podcast was fine.