This week, we’re diving into a critical topic: rethinking how we measure progress beyond GDP (Gross Domestic Product). Traditional GDP metrics focus on economic output but fail to capture the environmental, social, and human dimensions essential for long-term development and well-being.
Why Beyond GDP Matters:
1️⃣ Environmental Challenges: GDP doesn’t account for the costs of environmental degradation, such as pollution or resource depletion.
2️⃣ Social Inequalities: While GDP measures aggregate wealth, it overlooks its unequal distribution, masking disparities in access to essential services.
3️⃣ Non-Market Contributions: Essential activities like caregiving and volunteer work remain invisible in GDP calculations.
A New Framework for Sustainable Progress:
This policy brief proposes a triple-indicator system:
🔹 sGDP (Sustainable GDP): Adjusted GDP to reflect deviations from sustainable growth.
🔹 Sustainability Composite Index: Measures ecological, economic, social, and human dimensions.
🔹 Well-Being Composite Index: Captures quality of life indicators such as health, education, and happiness.
Spotlight: The EU’s Role in Transformative Metrics
The EU is leading efforts to integrate sustainability-focused measures into policymaking. Building on frameworks like the UN Sustainable Development Goals (SDGs), these indices aim to inform better policies for equitable, long-term development. Case studies from Hungary demonstrate how these metrics can provide actionable insights into sustainable transitions across diverse economies.
Read the full policy brief! Join us next week as we continue exploring innovative policy ideas!