ABSTRACT
The success and failure of the economic performance of a nation is customarily measured by the annual growth rate of per capita income. Over the last three decades it has become increasingly evident that for many ‘resource dependent’ nations the standard measures of economic progress fail to account for its often negative impact on physical and social indicators. The chapter explores the recent development of alternative indicators of economic and social performance, and discusses how they attempt to avoid persistent policy failures with regards to the environment. These recent approaches reformulate the conventional system of national income accounts and create a general framework for environmentally adjusted ‘sustainable’ measures of economic development. The chapter presents four specific indicators of economic and environmental sustainability: (1) the environmentally adjusted net domestic product (EDP), (2) the genuine savings (GS), (3) the index of sustainable economic welfare (ISEW), and (4) the ecological footprint (EFP). The chapter argues that the measurement of human material progress, net of its adverse impact on the environment, is critically important, yet it appears as if this conversation has merely begun.
