Can Indicators and Accounts Really Measure Sustainability?

Considerations for the U.S. Environmental Protection Agency

Joy E. Hecht, Ph.D. Consultant on Environmental Economics and Policy jhecht@alum.mit.edu

Throughout the world, sustainability has become the common term of art for describing the objectives of public policy. At the same time sustainability indicators have become a preferred tool for tracking the actions of public agencies at the global, national, state or provincial, and municipal levels. Some public agencies have developed elaborate systems of sustainability indicators with which they hope to track their progress. Other have adopted, and adapted to their own needs, international indicator systems and indices1 developed by global organizations such as the United Nations and the World Bank. The U.S. Environmental Protection Agency (EPA) is considering following this path, and adopting sustainability as a benchmark for its own work and using sustainability indicators to assess the agency’s progress. But before it takes this step, it is essential to consider what these indicator systems actually tell us about sustainability. When these indicators move in the “right” direction – if we even know what that is – does that really mean that our economy, our environment or our society is actually sustainable? Do we know how to define sustainability precisely enough to use it as a basis for assessing public policy decisions? And will such indicators enable the agency to show measurable results from its actions, as it is increasingly under pressure to do, along with all U.S. government agencies? This paper considers some of these questions in order to help EPA to consider how – or whether – it can effectively rely on sustainability indicators to define its objectives or measure its progress. To do so, it presents an overview of some of the systems that have been developed to construct simple indicators or indices of sustainability, and assesses the extent to which they may be useful to EPA. What Do We Mean by “Sustainability?” Since it came into common parlance after the Rio conference in 1992, the word “sustainability” has been used to describe everything from keeping our air and water clean, to finding new economic activity for towns whose old industries are gone, to ensuring that people in small African villages can retain their traditional way of life. We hear of the three “pillars” of sustainability – economic, environmental, and social – and the need for all of them to be sustainable in order for the system as a whole to be sustainable.

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For the purpose of this article the word “indicator” refers to a simple measure of a single parameter, and “index” refers to a measure that combines a number of parameters into a single value using some mathematical formula to do so, except in the case of the Genuine Progress Indicator.

If our consumption patterns cause people to become ill. If our social system leads to great dissent and people kill each other off. While this interpretation of social sustainability has some appeal. Freedom of choice may not be compatible with social sustainability in these cases. it could not be considered sustainable. While the dictionary wasn’t written with late twentieth century environmental politics in mind. with only gradual evolution of species or the niches they occupy. it nevertheless offers a useful starting point. It can mean that the residents of company towns where the company leaves – mining towns. If our technology and consumption patterns rapidly deplete the ecosystems on which we depend and we cannot develop alternatives. however. we might consider an ecosystem sustainable if we are sure it will continue providing us with services such as clean water and air. A sustainable economy is one in which the ability to generate income is maintained. they are not affected by the impacts of other societies (negative. and they are not forced by the failure of the traditional economic system to leave the village and move to the city. This has a reasonably clear interpretation in the field of economics. then. watershed protection. they are unsustainable. Life in an African village is very hard. but that isn’t important for our purposes). Other aspects of social sustainability are harder to fit into this concept. such as pollution. due to pollution or unhealthy food for example.2 What does this have to do with the meaning of the word “sustainable” in ordinary English. Some sustainability advocates understand the concept to mean that communities may continue to operate as they have in “the past” (an undefined time span.” So something that is sustainable is something that can be kept in existence – presumably more or less independently. This might mean that the social structure of an African or Amazon village is unchanged. food. for example – will find another way to survive economically as a community. or enticing. A sustainable society. people moving to the city may do so for an easier life. without continuous infusion of outside support or influence.” of which the most relevant is “to keep in existence. might be one that will continue to exist in its current form. From a human perspective. before it became a term of art? The American Heritage dictionary offers nine definitions of the verb “to sustain. others are eager to get a broader perspective on the world and consider other ways to make living. In some respects. then the social system cannot be considered sustainable because it doesn’t allow people to survive. such as television). rather than dispersing as young people move elsewhere in search of work. A population might be considered sustainable if it can continue to exist within its ecosystem at reasonably uniform levels over time. not because they are pushed out by the failure of their economic system. social sustainability can be understood in an analogous way. This usually implies that assets retain their value. While some youngsters in rural America might like to live their lives as their parents did. Sustainability also seems to have a reasonably clear meaning in biology – though natural scientists might consider that a glib assessment on the part of a social scientist! An ecosystem might be considered sustainable if at some level the species within it continue to exist and interact with each other. . it is hard to reconcile with the fact that these social changes may be considered desirable by the residents of the communities involved. for that matter. or carbon sequestration. because income is the payment made in return for use of an asset.

Instead. this is much easier said than done. But inequitable and dictatorial societies have been sustained very effectively for millennia. Identifying economic. and demand for gas-guzzling support utility vehicles. like “holistic thinking. it is relatively straightforward to observe the impacts of an increase in gasoline prices on miles driven. and enjoy the luxury of a private car. in social terms the kinds of societies that have been sustained in the past may not be the ones we want to live in. food and transportation choices.” or at least as many people wish to continue living? Is it even possible to 2 Diamond 2005. environmental. economic.” while others were willing to adapt their consumption patterns or cultural norms in order to survive environmentally and economically. technology.3 Many sustainability advocates argue that to be sustainable. Whereas there is an intrinsic meaning to “sustainability” in economics and nature that we can’t override. This approach to social sustainability is illustrated by Jared Diamond’s work on why societies collapse. and perhaps even social implications of marginal changes is easy.” which it resembles. participatory. For example. rather than dealing with each concern independently. but has people living in high-rise buildings that cost more per square foot than single-family homes and requires energy consumption and safety considerations not needed in the old housing forms? If most Americans prefer single-family homes with large lawns. it suggests that if we wish our society to be sustainable. we need to sustain our economy. Another approach to social sustainability might mean that our social practices – consumption. an alternate concept may be useful. greenhouse gas emissions. To achieve sustainability. The Whole is Greater than the Sum of its Parts The value added of the concept of sustainability. participation. and achieve our social goals – ideally without trading off one goal for another. So the third pillar of sustainability could involve deciding what we want to sustain – values such as equity. . economic. this concept of social sustainability fails the dictionary test. and environmental concerns. recreation – can be sustained in environmental and economic terms. This does not mean that we can maintain any practices we like. is that it forces us to recognize links and trade-offs. protect our environment. a society must be equitable. However. would living at greater density be socially acceptable? Would it be consistent with a concept of social sustainability that includes the idea of allowing communities to continue to operate as they have “traditionally. how people organize everyday activities requiring travel.2 in which he discusses how some societies destroyed their own resource bases and committed “social suicide. above and beyond the social. and democratic. But how could we quantify the changes involved in movement to a higher-density urban form that does not require use of cars and reduces impervious surface in roads. and environmental concerns that make it up. Instead. we may have to adapt our practices so that we are economically viable and do not destroy the resources on which we depend. Sustainability is a valuable concept precisely because it does require us to focus on the integration of social. and democracy – and searching for a way to achieve these in a system that is economically and biologically sustainable.

htm. environmental. they don’t tell us much about sustainability – as opposed to environmental quality. population.un. have developed sets of indicators with which they hope to measure their progress. most of the UN indicators tell us where we stand now but do not tell us whether our current position can be sustained in the future.3 Its social indicators provide information on life span. Sustainability Measures within a Single Arena Sometimes a single measure. or economic well-being. and they are clearly both complex and difficult. Washington to Jacksonville. The UN system. Among environmental indicators. within one of the three arenas of sustainability. and throughout the world. Clearly these indicators cover a range of issues that we care about. Moreover. The economic indicators include conventional measures such as GDP per capita. If savings are positive. Sustainability indicator systems have been developed at all levels of government. and child mortality. organizations including the United Nations. does not do this. education. If the value added from thinking in terms of sustainability is that it forces us to be holistic. Moreover. which is something like the “mother of all indicator systems. However.org/esa/sustdev/natlinfo/indicators/isd. if savings (in financial terms or more broadly including natural and human capital) are negative. how can our indicators do the same? The UN sustainability indicator system. so it is a very partial measure of sustainability. and social sustainability? All of these analyses would be merely a starting point for evaluating how a modern community in the United States could be sustainable. This is a 3 Details are available at http://www. however.” tracks fifty eight separate parameters. This single indicator only addresses environmental health. we don’t know whether other features of our economic system may nevertheless make it unsustainable. while both useful and influential. land use and land cover. In the United States. public health. environmental. the European Union. Similarly. though. air quality is one such measure. because it will lead to illness. Florida. we don’t know that we are sustainable. we can assume that our system is not sustainable. if we exceed the standard. any observation above that level must be unsustainable. If we know the ambient concentration of air pollutant that is safe to breathe. . and a number of other regional groups have developed sustainability indicators system that they recommend to their members. we know we are not sustainable. as well as measures of consumption and saving. states from New Jersey to Oregon and municipalities from Seattle. but if we fall within it. The environmental indicators look at ambient air and water quality. can by itself tell us something about whether our system is sustainable.4 identify all of the complex tradeoffs involved in a shift from suburban sprawl to dense urban living in terms of impacts on economic. Most of these sustainability indicator systems track progress within the economic. and species diversity. greenhouse gas emissions. Sustainability Indicator Systems This brings us back to the problem of measuring and tracking sustainability using indicators that might be able to simplify the problem. even within the three arenas. and social arenas separately. nutritional status. Internationally. in the economic arena.

If there are only a few key indicators. Per capita income 80% 60% 40% 20% 0% -20% -40% -60% Open space % in poverty HS grad rate Beach Closings GHG emissions/capita Series1 Series2 A graphic like this can give a quick visual check of whether the overall system is becoming better or worse.5 The development of environmental accounts arose for a For the full technical reference on the SEEA system. If any one value lags behind. see Hecht. they are sometimes presented in a visual form like the diagram below. as do GHG emissions in this example. or SEEA. if it becomes worse it moves in. then the two polygons will overlap. it can be easy to determine that we are not sustainable. Environmental Accounting and “Green GDP” Many systems for tracking sustainability have gone beyond simple indicators to build full sets of accounts. Moreover. see UN et al. 4 It builds on the System of National Accounts (SNA. but very hard to determine that we are. 2005. however. more formally referred to as the System of Integrated Economic and Environmental Accounting. 2003. respectively). Indicator Suites To emphasize the importance of making progress on all of the key indicators together. It is useful only for a simple snapshot of a small set of indicators over two time periods. If we had a longer time series than two points. national indices. Thus if progress is being made over time the later polygon will enclose the earlier one. provides data on six indicators at two points in time (series 1 and series 2). 4 . One of the best known accounting systems is the environmental accounts. in which all must move in the right direction at once. some systems organize them into a simple “suite” of measures. or both. called a “radar chart” in Excel. If an indicator improves over time. For a non-accountant’s introduction to environmental accounting and the SEEA. but if one indicator lags.5 common quality of sustainability indicators. this kind of graphic would become impossible to follow visually. The darker colored inner polygon on the chart shows the first data point and the lighter colored outer ones show the second. or for patterns in which an increase in one indicator is consistently associated with a decrease in another. it moves outwards on the chart. 5 The national accounts are the national economic data systems used to calculate familiar macroeconomic indicators such as Gross National Product and Gross Domestic Product (GNP and GDP. or national income accounts) to integrate the data with information on the environmental impacts and dimensions of the economy. this approach to defining sustainability does not allow for tradeoffs among the indicators. the whole system is considered unsustainable. This graphic.

It is hard to put a monetary value on such environmental harm in an objective way. among them the recognition that the SNA did not capture the environmental externalities of economic activity. Both the SNA and the SEEA attempt to measure values that can be defined objectively and that do not vary from person to person.e. and the like – it does not deduct most of them from GDP or other aggregate measures. These priorities mean that the SEEA does not track some of the key issues that might be included in a green GDP measure. Parts of the system are being implemented in most OECD countries (the United States being the notable exception). and work is underway in several dozen developing countries. a welfare measure would differ from the conventional accounts in fundamental ways that would make environmental accounting data incompatible with the SNA and limit the ability to integrate the two data sets for analysis of links between economic change and environmental quality. and the SEEA does not try. i. the income we can continue to receive without harming any of the assets we use to generate it. Moreover. in practice it is hard to design a measure whose meaning is clear. whose primary purpose is to provide a framework for integrating data on the environment with the economic data in the national accounts. and so on. the SEEA has been designed through the coordination of the United Nations Statistics Division.. green GDP could be a measure of welfare. The SEEA has been designed largely by national income accountants. Like the SNA. clean-up costs.” While a green GDP sounds like a good idea. the SEEA emphasizes the accounts themselves rather than calculation of indices like “green GDP. so it is the closest thing to an official system for linking environmental and economic data. While the accounts do track the harm caused by pollution or resource overuse when it passes through the economy – medical expenditures. The development of a comprehensive set of environmental accounts is therefore an invaluable first step in the measurement and analysis of sustainability. Although criticisms of gross domestic product (GDP) and other aggregate economic indicators were a driving force in the development of environmental accounts. forest depletion. the data within the accounts are key components of many of the other indices discussed in this paper. since individual preferences differ. any measure of welfare is inherently subjective.6 number of reasons. Nevertheless. . The designers of the SEEA had no interest in creating a system that differed as thoroughly from the SNA as would a measure of welfare. Instead of measuring sustainable income. However. The SEEA is an accounting framework. However. the SEEA does not track harms that are not picked up in the economy – biodiversity loss. and they are essential for analyzing links between the economy and the environment for policy purposes. who are cautious about creating a system that significantly discards the internal structure and logic of the SNA. harm to other species if it does not have identifiable consequences for humans in the present. Moreover. there is no fundamental agreement on how to define or measure that income. as hoped by many critics of the conventional accounts. We might like it to be a measure of sustainable income. Thus the environmental accounts themselves will not provide a measure of sustainability. nor did it capture changes in natural or human capital.

and change in the value of human capital (the skills of educated people). The resulting measure captures key elements of sustainability as that concept is usually understood by economists. By summing the changes in value of different types of capital and seeing whether the outcome is positive or negative. go to http://www. and other environmental issues.” 6 . income is the return on assets. The word “weak” here means that different income sources can be traded off against each other. environmental accounts fall under the purview of the organization responsible for constructing the national income accounts. 6 Although this index was developed and largely implemented by the World Bank rather than by the accountants designing the SEEA. it has been integrated into the SEEA and can be calculated based on SEEA data. environmental protection expenditures. While some environmentalists may feel that no tradeoffs are acceptable between environmental and other assets. as in most countries. making it a measure of weak sustainability. can grow back in a relatively modest time frame. ambient environmental quality. as mentioned above. Some natural resources.org and use the search option at the upper right to locate “adjusted net savings. Genuine Saving Genuine saving is the one exception to the observation that the SEEA does not focus on aggregate indices. Genuine saving is a measure of sustainability rooted in economic principles and based on the national income accounts and the resource use data in the SEEA. A positive saving rate therefore means that income should be sustainable. Changes in all three types of capital—manufactured. objective databases on pollutant emissions. In the SNA. in the Department of Commerce. national saving is a measure of change in the value of manufactured assets. strong sustainability means that each income source must be protected and tradeoffs are not acceptable. but EPA’s role probably should not extend to developing them in BEA’s place. most analysts fall somewhere in the middle. and values for most countries worldwide. which can then be used by anyone interested in analyzing sustainability issues or constructing indices. The development and maintenance of reliable. so it is acceptable to sell them off in order to Hamilton and Clemens 1999. if assets do not decline in value. In contrast. Since. is an appropriate role for a national environmental agency. (now formally called “adjusted net savings”). and some economists may feel that all tradeoffs are acceptable. genuine saving implicitly assumes that different kinds of capital are fully exchangeable.worldbank. income will be sustainable. such as plantation forests. natural. In the US. Genuine saving modifies national saving to incorporate change in natural assets.7 In the United States. BEA is not currently building environmental accounts. this is the Bureau of Economic Analysis (BEA). and human—are valued in monetary terms and added together to estimate a more comprehensive saving figure for the nation than is calculated in the SNA. For the World Bank’s most current information on Genuine Saving. it should involve collection of the primary data needed to construct the accounts. EPA is well placed to be a provider of basic uniform data. then as long as the rate of return also does not decline. Like the Bureau of the Census. or at a minimum natural capital cannot be reduced. Rather. estimates of some harm due to pollution. resource use.

Others understand it to mean that the country is ensuring the future availability of technologies or assets that will meet the same needs as are now met by subsoil assets. as they are not renewable in a time frame relevant to contemporary society. the most current information about it may be found at http://www. income inequality. and so on. This leads to a single monetary measure that can be tracked over time to assess how the society is changing. so they can be added to or subtracted from the economic measures. The methodological discussion in this paper is based on Anielski and Rowe. Thus a measure that adds “biodiversity capital” to manufactured capital and tracks total asset value will not measure sustainability. but decreases in their value are included in genuine saving. we must realize that they are more effective as a flag that something is wrong than as an assurance that everything is okay. They both adjust personal consumption figures from the accounts to factor in harm to the environment (pollution and resource depletion). to make a case that GDP presents society as better off than in fact it is. though they do take into consideration all three components of sustainability. 1998. This is a problem with all sustainability indices. Some people take it to mean that the country possessing them invests in other assets to provide equivalent income once the subsoil assets have been depleted.rprogress. These measures express social and environmental elements in monetary terms. GPI was developed by the California-based nonprofit Redefining Progress. this is clearly a more restrictive concept of sustainability in use of non-renewables. The concept of sustainability as applied to non-renewables is understood in several ways. Minerals. and other subsoil assets are not renewable. They make further adjustments to capture what they consider undesirable social problems. divorce. such as biodiversity. but if we use them. and the value of non-marketed household labor (based on the cost of hiring someone to do the work). It does not invalidate them entirely. we can never be sure that we are sustainable. But other resources. ISEW and GPI The Index of Social and Economic Welfare (ISEW) and the Genuine Progress Indicator (GPI) are measures of welfare. because the indicator only incorporates some components of weak sustainability. cannot be replaced once they are lost.org/projects. The trend in ISEW or GPI over time is typically compared with the trend in GDP. However a positive saving rate does not guarantee that we are sustainable in the full sense of the term. Genuine saving can show us when we are unsustainable. but as with the air quality example discussed above. crime. The basic principles of ISEW were set out in Daly and Cobb. expenditures on education (investment in human capital).7 They take data from the national income accounts as a point of departure. 1994. petroleum. 7 .8 invest in human or manufactured capital if those are more valuable to the society. The most restrictive strong sustainability would permit no use of subsoil assets. Neither ISEW nor GPI claims to be a measure of sustainable income. and adjust them to capture a range of social and environmental measures. A negative genuine saving rate clearly means that in aggregate we are depleting our assets faster than they are renewed.

they place significant emphasis on developing macro indicators and less on 8 9 Hecht 2002. and adjusts the index based on differences from that level.44 per person-hour of television watched.8 Both measures weight consumption by poor people more heavily than consumption by rich people. This choice of baseline pushes the resulting index downwards. their adjustments for social problems are unavoidably subjective. Matthews et al.10 In contrast with the SEEA. the treatment of leisure time can be a very large portion of the final index. Because ISEW and GPI are measures of welfare. 2000 . the choice of the inequity weights is necessarily determined by beliefs rather than objective analytical criteria. The choice of how to value leisure – at minimum vs. The GPI. or whether a worse environment with lower crime might be preferable. it is precisely because they are measures of welfare that it would not be appropriate for EPA to calculate these indices. using average prevailing wage rates to value leisure. and a few intellectuals might consider all television watching to impose social costs. 1997.9 These measures raise the same tradeoff concerns as Genuine Saving.S.000 per child of divorce. While conservative Christians might believe that all divorces are bad. clearly people escaping from abusive marriages or relaxing in front of the tube after a hard day may feel quite differently! It is because they are measures of welfare that ISEW and GPI appeal to many environmentalists and critics of conventional economic measures. whereas use of a different baseline could have led to a much higher welfare measure. such as the Measure of Economic Welfare9). 10 Adriaanse et al. average wage rates – and how much non-working time should be allocated to leisure can determine whether welfare is observed to rise or drop over time. While many people may agree that income distribution is a concern. The GPI also deducts for other items whose value is clearly in the eye of the beholder. Nordhaus and Tobin 1973. Material Flow Accounting Material flow accounts use a framework somewhat similar to the SEEA to track the physical movement of materials in the economy. residents had the highest amount of leisure time on record in 1969. they may not agree about how much social welfare is reduced by inequity. However. Now it happens that U. This is an unavoidable consequence of any aggregate index of sustainability or welfare. government agencies should not use value judgments like those embedded in ISEW and GPI to track national progress. and did not impute any value for leisure time. and $0. measuring all flows by weight. say. however. While EPA does have an important role to play in providing the environmental portion of the data underlying them. on the other hand. takes the 1969 level of leisure as a baseline. The designers of the ISEW chose to avoid the issue altogether. They don’t allow us explicitly to consider whether it is better. In all welfare measures (including earlier purely economic ones. It subtracts all of the legal costs engendered by divorce. an arbitrary amount of about $10. Several other components of these indicators also raise flags about subjectivity. to improve the environment (increasing the index) while also increasing crime (decreasing the index). so GPI systematically deducts for the loss of leisure both before and after that year.

particularly in Europe. and TMR in particular. Despite this obvious limitation. The calculation of TMR involves comparing and summing tons of soil or rocks with tons of highly toxic materials that occur in much smaller quantities. Like GDP. Time series data on such indicators as TMR can be used to track national progress in achieving “Factor 4” or “Factor 10” goals of reducing overall material flows through the economy by a factor of 4 or 10. there has been considerable international interest in MFAs. across sectors and materials to calculate the total material requirement (TMR) of the economy.) Moreover. National material flow accounts (MFAs) track the weight of several kinds of flows: ƒ inputs into production. Like other measures. MFAs. including the rucksack. The significance and policy implications of national indicators such as TMR are not clear. Geological Survey. even if it has exported the impacts by importing finished goods rather than manufacturing them at home. in this case encapsulating all the flows of physical materials within the economy. a decrease might mean that all flows dropped by the same amount or that quarrying and strip mining were replaced with discharges of lead and mercury. though compilation of the accounts themselves will probably continue to be the task of non-governmental organizations. so government agencies are likely to be more willing to construct them than ISEW or GPI. the volumes of waste and materials moved in the countries from which imported goods are purchased (sometimes termed the “rucksack”). EPA may be interested in considering work on MFAs. this results in a single number. however. For these reasons. ƒ outputs produced during production. such as mining overburden or soil excavated during construction. (Of course the “factor x” measures will suffer from the same limitations as TMR. EPA may want to collaborate with other agencies to collect the data needed to build U.S. because it measures the full environmental impact of a consuming society. Adherence to this so-called “ton ideology” is a major criticism of MFAs in general. ƒ ancillary materials that are filtered out during the production process and become waste (or residuals). They include the hidden flows generated during the production of imports. MFAs do not involve the value judgments inherent in welfare measures. This is an important item. whose collection falls within the mandate of EPA and other government agencies such as the U.10 building comprehensive data systems that can be linked to the monetary accounts. The last two bulleted items are termed hidden flows in material flow accounting terminology. and ƒ materials moved within the environment in order to access natural resources. .S. it provides a more comprehensive measure than does an indicator of domestic output. The MFAs sum all four of these flows. MFAs depend on availability of a wide range of underlying data. i. and may be meaningful only if they pertain to specific rather than aggregate material flows. The tracking of these hidden flows is one of the key structural differences between MFAs and the conventional accounts. This makes it difficult to understand the meaning of a change in TMR.e. Because it includes both domestic and international hidden flows.

thus consumption of fish is translated into water areas. then the region is depending on the flows from land of other regions (or countries).11 It focuses on natural resources and the environment and is rooted in ecological considerations. pasture. but also intermediate inputs such as energy. Like the MFAs. To use the footprint as a measure of sustainability. or other unit of scale must keep its footprint within its boundaries. international trade 11 12 Wackernagel and Rees. In an effort to bring more rigor to the calculation of ecological footprints worldwide. Per capita ecological footprints have been calculated for all countries with populations greater than one million. its designers have expanded it from calculation of aggregate indices to a footprint accounting system that can be constructed for (if not in) all countries in the same way.13 The ecological footprint provides a simple flag with which to compare the consumption patterns of very different countries. gardens. it is a weighted sum of the six surface area classes based on the average productivity of each type of land worldwide. for which they estimate the forested land area that would be required to sequester all of the carbon emissions resulting from production of that energy. a country’s footprint is based on the environmental impact of the production required to satisfy its consumption. the conversion of all environmental impacts to a single physical unit raises some questions. How useful it is for analytical purposes or assessing sustainability is debatable. region. consume. forest. Available land is not simply the total spatial area. The system converts all consumption into the surface area in each of six classes—cropland. expressing consumption in terms of the area of land or water required to produce. if it is lower. from the individual to the city to the nation to the world as a whole. and welfare measures integrate all three arenas. irrespective of where that production occurs. it is compared with the land area of the region concerned. An area’s footprint may be divided by its population to measure per capita footprint. The different land and water requirements of each type of consumption are summed to arrive at the total appropriated area of the region. This includes not only final consumption. or dispose of the goods or services.11 Ecological Footprints and Footprint Accounting The ecological footprint is a measure of strong sustainability. It includes both land and water areas. and urban—required to produce a particular product or to manage the wastes resulting from its manufacture or consumption. coastal waters. ecological footprints use land as the common unit of measure. or its ecological footprint. however. If the footprint is greater than the amount of available land. The footprint can be calculated at any scale. Whereas material flow accounts convert economic flows to the weight of material moving through the economy. and the results compared with global per capita available land. May 2005 13 WWF 2004 . whereas genuine saving is based on economics. 1996 Wackernagel et al. To meet a sustainability standard by which each country.12 The accounting system follows that of the SEEA to some extent. then the region is supplying flows from land to other parts of the world. but like the MFAs.

and the resulting scores are aggregated to form the index. in that it has several levels of hierarchy in grouping the component variables rather than using a simple sum. but they may wish to hold off on more substantial involvement in building the footprints. however each one is placed on a scale of one to 100. Now consider three different ways to construct an index. rated on a scale of one to ten. This concept of sustainability does not recognize any benefit from trade. 14 Yale 2005 . but that each subunit within it must also be strongly sustainable. Environmental Sustainability Index14 The ESI is a complex index that. particularly because. As with the MFAs. This makes it possible to compare “apples and oranges” without grappling with the problems of converting them all to a uniform numeraire. the aggregation of all impacts into a single unit creates problems in this system which leave the results open to question. The first method has only one hierarchical step. as shown in the column headed “No grouping. as shown in the table below. the six indices are simply averaged. each individual would have to be totally self-sufficient on a discrete plot of land.83. land.” This gives a value of 3. aims to measure the sustainability of human use of the environment. as a very simple numerical example will show. which are combined to form 21 indicators. The ESI differs from the other indices described here. It is based on 76 individual measurements. Like the MFAs. this is a very extreme version of strong sustainability. Hierarchical indices are highly subject to how the underlying variables are grouped. even if one region is suited only to agriculture while another excels in fishing or has a highly skilled labor supply. however. This concept in essence says not that the world as a whole must be strongly sustainable. The ESI is a simple unweighted average of the 21 indicators. it allocates the full impacts of consumption to the country engaging in that consumption.12 would be quite limited. or tons. The footprint accounting structure is interesting. and cities would not be allowed to depend on their hinterlands. Suppose we have six variables. EPA can play a useful role in collaborating with other organizations to provide the underlying data with which to construct footprint accounts. Rather than converting all of the underlying components into money. a through f. although they are also grouped into five categories that capture different elements of environmental impact. At the extreme. like the ecological footprint and the material flow accounts. like the material flow accounts.

performance according to this index.83 4.S. The developers of the ESI are very much aware of these problems. As the table shows. EPA may also wish to use it as a flag to call attention to U. as it focuses only on environment.5 In the second and third methods. environmental issues or compare . we introduce an additional element of subjectivity with each level in the index hierarchy. and because it is a quite simple measure which has received a fair bit of press attention. and an individual indicator—e in this case. This means that in addition to subjectivity in our choice of underlying indicators. and do not average the five indicator groups.S. it is neither a measure of overall sustainability.13 Variable name A B C D E F Value of X Value of Y Overall Index Variable value 2 4 1 3 9 4 No grouping Group assignment 1 X X X X Y Y 2. the index is constructed in two steps. than as a policy tool for decision-making within the government. However. Then the sub-indices are averaged to get the overall index. following a well-documented and consistent methodology. X and Y. how we assign indicators to groups will significantly affect the value of the index.5 6. First the separate indicators are grouped together and sub-indices are calculated.625 3.S. Within each group the indicators are averaged to get the sub-index. as well as to allow individual countries to tailor the index to better reflect their own environmental concerns. The way in which the 76 underlying measures are combined to form the 21 indicators may still create problems. the index’s developers are planning to create an interactive version of the calculation system with which individual users can vary the weights and create new indices. which environmental groups can use in calls for greater government commitment to environmental protection. since it is an outlier—has more impact on the overall result if it is in a small group than if it is in a big one. as the ecological footprint does. Its utility in the U. Here we have two groups.5 Group assignment 2 X X Y Y Y Y 3 4. it is easy for EPA to track U. which is why they calculate a simple average of the 21 composite indicators. may be more as a political tool. For this reason. The ESI is being calculated annually Yale’s Center for Environmental Law and Policy and Columbia’s Center for International Earth Science Information Network (CIESIN).25 3. nor even an attempt to actually account for strong sustainability. To address these concerns.

And the data that EPA can provide to other organizations will be invaluable both within the agency and outside of it. As the primary federal agency responsible for environment. Conclusions While much discussion and effort has gone into sustainability indicators. Resource Flows: The Material Basis of Industrial Economies. however. 1999. Allan Hammond. New York: Viking Penguin. Diamond. More often. . Albert. none of the resulting systems clearly tells us whether our society is sustainable. they simply draw our attention to the existence of problems. References Adriaanse. even though none of the measures will provide a definitive measure of sustainability.14 our performance as protectors of the environment with others around the world. Jared. or that our current activities are not sustainable. Yuichi Moriguchi.: World Resources Institute. Available through http://www. Stefan Bringezu. other organizations can easily step in to construct indices and accounting systems using the information. Washington. 2005. Donald Rogich. even though it may not be appropriate for it to construct those measures itself. D. However it will not help EPA to introduce sustainability as a benchmark for evaluating national progress. Eric Rodenburg. These limitations suggest that EPA should not be directly engaged in constructing any of these indicator systems.C. Anielski. while the subjectivity of welfare measures suggests that they should be constructed outside of the federal government. No non-governmental organization has either the mandate or the resources to play this role. EPA itself is likely to make use of measures constructed based on its own data. EPA is. well suited to developing the primary data on which all of these systems depend.rprogress. for focused analytical work and for broad assessment of progress towards social goals. and Helmut Schütz. the EPA has the authority to collect primary data about the country. Measures of welfare embody subjective assumptions about what is good and bad for us as a society. When such data are collected by a respected federal agency and made readily accessible to the public. The Genuine Progress Indicator: 1998 Update. and the institutional structure to maintain data collection institutions that will continue over time. The results may be of considerable importance both for policy analysis and for advocacy. they can tell us that we are heading in the wrong direction. In the case of the environmental accounts. the Bureau of Economic Analysis has explicit responsibility for building them. San Francisco: Redefining Progress. Although they can provide a useful basis for debate about societal values and conflicting interpretations of welfare. these are clearly open to debate and will certainly elicit considerable disagreement if they are understood.org. they do not offer us an objective way to assess our activities or progress. At best. 1997. Collapse: How Societies Choose to Fail or Succeed. doing little to tell us the origin of those problems and nothing to tell us how to solve them. Mark and Jonathan Rowe.

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