ABSTRACT
This chapter introduces the concept of Inclusive Wealth (IW) as an indicator of sustainability development. To discuss how IW can be estimated as a comprehensive indicator of sustainability, this chapter focuses on adjusting for Total Factor Productivity (TFP). In this chapter, our TFP is unconventional in that it also considers human, produced and natural capital in our measurement. Thus, we refer to this adjusted figure as the Inclusive Wealth Index considering TFP (IWI-TFP adjusted). In this chapter, we also measure how countries’ performance affects IW after three main factors are considered. Those factors are as follows: (1) climate change, particularly the damage resulting from increased atmospheric carbon; (2) TFP’s contribution to multiple missing factors related to economic growth and (3) oil-capital gains related to the change in oil prices, which may either increase or decrease the country’s productivity value. We refer to these three adjustments in the aggregate as IWI adjusted.
