The Secretary-General of the United Nations rightly noted in his Our Common Agenda report that “We must urgently find measures of progress that complement GDP.” The theme was broadened in the recent Valuing What Counts: Framework to Progress Beyond Gross Domestic Product policy brief.

Efforts to find alternatives will need to do two things to be effective. First, they must acknowledge that Gross Domestic Product reflects an understanding of development that, though potentially helpful in assisting populations which lack resources, does not fully reflect human well-being and the challenges we face today. GDP reduces the way we measure value, ignoring countless forms of care and volunteer work, for example, while rewarding many destructive practices and obscuring disparities among populations. But these limitations notwithstanding, proposed alternatives must also account for and build on the appeal of GDP, including the simplicity and intelligibility that has allowed it to continue shaping global discourse and policy.

The value of an indicator rests in its ability to articulate a shared aspiration and to assess progress toward it. Today many indicators are seen as ends in themselves, rather than as means to achieve wider objectives. And they are only as helpful as the aspirations they reflect. Gross domestic product reflects a conception of development centered on material wealth and the ability to procure the necessities of life. This understanding emerged when the notion of development entered mainstream discourse in the 1950s, and still remains at the heart of many global and national priorities.

The contemporary development agenda, however, suffers from an overreliance on GDP and an inability to build consensus about what development actually is and what is involved in achieving it. In the absence of such consensus, financial wealth, industrial production, capital accumulation, and similar factors—measured in terms of GDP—have served as a kind of lowest common denominator. This has assisted in meeting some basic needs, but has also reinforced baser qualities such as greed and materialism. 

Recognizing these limitations, a host of alternatives have been developed, ranging from the Human Development Index, Genuine Progress Indicator, and Better Life Index, to the Happy Planet Index and Gross National Happiness. These are commendable to the degree that they are able to expand our understanding of development. But they have also been unable to capture consensus on a more holistic understanding of progress that would better reflect our collective aspirations. 

Humanity must continue to expand and rethink notions of “progress” and “development” in the long term. But we also would benefit from finding interim steps within the current paradigm that can help mitigate the crises we face.

A proposed step

GDP generalizes and simplifies. Suggested alternatives to it often respond to the gaps this necessarily creates with efforts to increase nuance and sophistication, multiplying the number of indicators and the range of variables. Precision and depth are of course vital in pushing ahead the frontiers of research and knowledge. But they do not lend themselves to the participation of large numbers of stakeholders across different strata of society. GDP is indeed simplistic, but that very simplicity makes it exceedingly clear and understandable as a tool of communication and comparison. Herein lies a crucial difference between domain-specific indicators used by subject matter experts and top-line indicators used in both general and policy discourse. Both are important, and a central need, therefore, is high-level indicators more suited to the challenges facing humanity today. 

The triple planetary crisis we are facing is clear, profound, and measurable, at least at the level of proxies. Plotting national GDP on one axis of a graph, against national environmental impact on the other, reveals an undeniable correlation: as GDP increases, so does environmental impact. Movement along current trend lines will place ever more intolerable pressure on the planet, as well as present and future generations. There is a clear need, therefore, to create pathways to the “magic corner” of this graph, the corner where citizens have social and material well-being, while the natural environment is conserved. 

GDP has come to define the first axis of this relationship, its imperfections notwithstanding. Needed for the other is an indicator that is at once compelling and simple. One potential approach (among many) might be a ratio of each country’s share of the global carbon budget (per-capita), as compared with its actual year-over-year usage of that “allotment.” This kind of data is already being measured.

Any indicator based around the carbon budget would have to respond to legitimate concerns of justice and equity, ensuring that countries with low GDP are not saddled with yet another burden, and that those with high GDP do not shift investments solely toward their own progress along these lines. In order for it to win acceptance, countries will need to learn to view one nation’s inability to arrive at that magic corner less as a failure solely of that individual country, but also as an indicator of shortcomings within the community of nations itself, that must be overcome together.

Such an indicator would also hide inequalities and ignore other environmental measures such as biodiversity loss, pollution, and agricultural output. Carbon budget would be a proxy, and subject to the caveats inherent to them. But there is reason to believe that it might nonetheless be associated with the ecological outcomes we value and to which we aspire. Just as growing GDP can open pathways toward better healthcare, more robust education, and accelerated technical innovation, experience suggests that lower carbon output can open pathways toward biodiversity preservation, pollution reduction, and similar aims. 

Ultimately, the purpose of such a top-line indicator would be to take a step toward moving away from an antiquated metric which retains an outsized influence on policy and practice. It might represent the start of the journey, even if by no means the destination. Taking such a step would, itself, be a good indicator of progress. 

Daniel Perell is a Representative of the Bahá’í International Community to the United Nations