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GDP is too dated, says the European Commission

Presently, Gross Domestic Product (GDP) is the best known measure of macro-economic activity of a country or a continent, in the Europe’s case, but this is about to change. On 8 September, the European Commission explained its plans in a Communication entitled GDP and beyond, Measuring progress in a changing world.

GDP is not a welfare measure and it does not measure environmental sustainability or social inclusion. Thus, the Commission wants to complement it other statistics such as information on greenhouse gas emissions, loss of natural landscapes, air pollution, waste generation, and health.

The Commission is intending to develop indicators to measure progress in delivering social, economic and environmental goals in a sustainable manner. The aim is to assess national and EU policies on whether they are successful in delivering the abovementioned goals.

The European Commission intends to change how economic success is measured and to complement GDP with environmental and social indicators. In the present Communication, the Commission proposes to implement five actions to achieve those aims.

The Commission is planning to develop a comprehensive environmental index and improve quality-of-life indicators. It will present a pilot version of an index on environmental pressure in 2010 which will comprise areas such as climate change and energy use, nature and biodiversity, air pollution and health impacts, water use and pollution, waste generation and use of resources. The aim is to publish such index in parallel to GDP in order to assess EU and national policies deliver the level of environmental protection which is expected.

The Commission will also consider developing comprehensive indicators of quality of life and well-being.

The Commission has pointed out that GDP and unemployment figures are timely published but not environmental and social data. The Commission will, therefore, endeavour to produce environmental and social data more rapidly.

Moreover, the Commission wants to put in place a more accurate reporting on distribution and inequalities in order to allow a better definition of policies on social and economic cohesion.

The Commission has been developing with the Member States the EU Sustainable Development Indicators (SDIs) in order to monitor progress on the objectives of the EU Sustainable Development Strategy (SDS). However, according to the Commission, SDIs are not always based on the most recent data. Hence, the Commission is planning to develop a Sustainable Development Scoreboard in order to allow an identification of environmental trends and a benchmarking of best practices. A pilot version of the SD scoreboard will be presented by the end of the year.

The Commission is also planning to complement national accounts with environmental and social issues.


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The Environment Council has recently asked the European Commission to “complement GDP with additional robust, reliable and widely recognised indicators to measure progress towards an eco-efficient economy and to develop, together with Member States, a sustainable development scoreboard by 2010, which will provide information on the implementation of EU sustainable development objectives in Member States."

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Bill Cash has been the Conservative Member of Parliament for Stone since 1997 and an MP since 1984.

He is currently the Chair of the European Scrutiny Committee and the founder member of the European Foundation...

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