Measuring the Long Term
Dr. Jonas Salk, a pioneering medical researcher, once said that the most important question we can ask ourselves is, “Are we being good ancestors?” Looking out at the state of the current economic, social and environmental landscape today and envisaging some of the situations we are creating for future generations, it is hard to be optimistic about the answer to this question.
The world’s continued fixation with economic growth ignores a rapid and largely irreversible depletion of natural resources that will seriously harm future generations. Coupled with the increasing short-termism of modern politics and a general inability to look beyond our own self-interests, the result is a crisis of opportunity for unborn generations.
There are, of course, many positive initiatives to celebrate that offer a more positive legacy but system-wide change will not happen without better measures of progress that go beyond our current narrow view of economic progress. But how do we measure the effectiveness of long term planning? How best can we assess how decisions and choices made now are impacting on future generations?
Thankfully recent decades have seen a proliferation of methods and indicators that can both help governments with their long term planning and encourage businesses to look beyond the current quarterly reporting cycles. If used effectively these tools could bring issues such as greater intergenerational equality, higher levels of well-being or environmental sustainability to the centre of our decision making.
The Ecological Footprint (EF), for example, tracks the human demands on the biosphere against the regenerative capacity of the planet. Importantly the index can calculate global ecological overshoot, including the depletion of the planet’s life supporting biological capital and/or to an accumulation of carbon dioxide emissions, both of which will seriously impair the quality of life of future generations.
Sustainable Development Indicators (SDI), meanwhile, use a broad range of indicators to track progress on elements such as resource productivity, life expectancy, greenhouse gas emissions, good governance and the energy consumption of transport. These efforts frequently entail making choices between using resources to maximize current human wellbeing or preserving resources for use by future generations.
The good news is that many of these alternative indicators are starting to have some impact on policy by clearly showing decision makers how their current choices are impacting the welfare of current and future generations and pointing towards alternative pathways. The State of Vermont, for example, are using the Genuine Progress Indicator (GPI) to chart a significantly different strategy focusing on growth on sectors of the economy that provide local jobs but don’t deplete natural assets or the social fabric of the state – sectors like arts and culture, clean energy, education, financial services, food and forest products, and healthcare.
Other indices with the specific aim of tracking the long term wellbeing of future generations have also recently been proposed. For example, the Oxford Martin Commission for Future Generations has proposed the development of a ‘Long-Term Impact Index’. The index would rate the effectiveness of leaders of countries, companies and international organisations on key issues such as investing in appropriate infrastructure and decision-making processes that enhance longer-term resilience. It would aim to track key indicators such as median household income, biodiversity protection, open decision making and carbon neutrality.
Of course the most significant new international targets and indicators currently being negotiated by the United Nations are those associated with the Sustainable Development Goals (SDGs). It seems obvious, but in order to be intrinsically sustainable, these goals and targets should be beneficial for both present and future generations and not compromise the well-being or opportunities of either. Several key themes that could be judged to be missing from the SDGs in this regard include planetary boundaries and tipping points, international public goods and environment and natural capital. There are a number of key questions that need to be resolved if the SDGs are to be ‘future proof’ with regards to their long term impact on future generations: Are they consistent with moving beyond linear economic growth models towards a more circular economy? Are social and environmental costs of all economic activities taken into account? And is there a long term, multi-level mechanism for representing future generations within the political decision-making process?
These indicator examples reveal that while there is a wealth of diversity emerging in the alternative indicator scene several elements will be crucial if this shift is to have the necessary impact:
- The well-being of future generations is dependent on the resources (capital) current generations leave behind. A ‘future proof’ measurement system should therefore be able to clearly estimate and account for the current levels of capital.
- There are a number of critical domains that have consistently been identified as crucial to the long term wellbeing of future generations and a measurement system that serves this purpose should therefore also provide trend analysis on one or more of these.  For natural capital — energy resources, mineral resources, land, ecosystems and biodiversity, water, air quality and climate; For human capital — labour, education and health; For economic capital — physical capital, knowledge capital and financial capital; For social capital — trust and effective institutions.
- Policy relevant indicators for these domains are also vital so that decision-makers have the necessary tools to look at new policy options and judge the effectiveness of their policy interventions over time. These include indicators such as water abstractions, global CO2 concentrations, resource productivity, waste generation, energy resources, threatened species and physical capital stocks.
- New approaches to analysis and policy development are required to deal with the increased complexity of multiple long-term objectives and the trade-offs between them. Experimentation and innovation will be necessary, for example considering combinations of policies that have not been tried before and working more extensively across government departments.
- The identification of successful institutional innovations which could support these alternative measurement and policy frameworks will also be crucial. The Hungarian Commissioner for Future Generations, the UK’s What Works Centre for Wellbeing (just launched), or Korea’s successful commitment to wellbeing across a change of administration could all serve as models in this regard. These models all contain innovations in multi-disciplinary working, embedding a longer term horizon into policymaking that reinforces advocacy for the natural environment, human wellbeing and intergenerational justice. Work in advocating these best practices in other jurisdictions and contexts is also key.
- Finally, moving this long-term ‘alternative’ measurement revolution from the fringes to the mainstream is going to take commitment and cooperation to overcome years of entrenched resistance. The public must be fully engaged to define what really matters to them and how this can be measured, while the clear differences in policy outcomes that result from this shift must be demonstrated. The very education of future economists needs an overhaul to include voices that challenge the neoclassical economic model. These tasks are ambitious but not insurmountable and efforts are already underway. Recent polls show there is clear international public support for this shift towards longer term and wider measures of societal progress, and the positive outcomes for society resulting from such a shift are becoming abundantly clear.
This blog is based on a longer paper which can be viewed here
 See for example http://www.unece.org/fileadmin/DAM/stats/publications/2013/CES_SD_web.pdf
Posted by Future Justice on 6 January 2015
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