How can environmental sustainability be incorporated into economic measurements?
On Wednesday 2 March the Environmental Audit Committee will be holding its second and final evidence session of its mini-inquiry, Aligning the UK’s economic goals with environmental sustainability.
The Committee is exploring how environmental sustainability could be incorporated better into the economic measurements that guide Government policy.
Likely areas of questioning
Among the issues likely to be discussed today are:
- Whether there is a tension between fiscal sustainability and environmental sustainability;
- Potential alternatives to GDP and how other countries have adapted GDP to take into account natural and social capital;
- How shifting the way we measure prosperity could help level up the UK.
There are growing calls from economists and environmental scientists for current measures of economic progress to be developed to reflect the importance of sustainable development. The current primary measure—GDP growth—is often presented as a proxy for economic prosperity. Critics argue that GDP only measures current flows of investment and consumption and does not measure stocks of human or natural capital.