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Beyond GDP Indicators in Europe

Beyond GDP Indicators in Europe

7 September 2011

The Ecologic Institute hosted a dinner dialogue on the 7 September 2011, featuring a discussion of the ongoing process of developing alternative welfare indicators in Europe and its inherent challenges and rewards. Klaus Rennings of the Centre for European Economic Research (ZEW) and Oliver Zwirner from DG Environment of the European Commission provided introductions into the subject and kick started a lively discussion on indicators and their development.

The development of alternative welfare indicators aims at making sustainability measurable to ensure that sustainability concerns are taken account of in policy making. This process is sometimes called Beyond GDP, as to often GDP is used as the only available indicator for societal welfare.

Oliver Zwirner focused in his introduction on how indicators can be useful in policy making. He stressed the importance of completeness and timeliness of indicators in the European context as indicators have to enable policy makers to compare different member states and compare the situation over time. For that matter the data deliveries of the member states are crucial for the European Commission, as the commission is not able to collect data themselves. The assessment of the member states whether a dataset is robust enough for publication has to be seen in this context as the Commission does not look for perfect but for the "best available" information.

Klaus Rennings introduced the work of IN-STREAM to the audience, focusing on the FEEM sustainability indicator that was developed during the project and has shown important lessons about how to use composite indicators. Although composite indicators always remain subjective in their choice of indicators and their weighting, they can highlight the inherent value judgments in the indicator and with that give important lessons to policy makers.

The following discussion, led by R. Andreas Kraemer, Director of the Ecologic institute, focused on the practicalities of indicator development and the inherent trade offs that have to be done between robustness and completeness of indicators.