trends and future of sustainable development - TransEco

1999). In this analysis the Finnish ISEW has been presented and applied on the basis of Daly’s andCobb’s original proposition (e.g. see Daly and Cobb 1989).The Genuine Progress Indicator (GPI) is a further derivative of ISEW. In addition to U.S. (see e.g.Talberth et al. 2006), GPI has been calculated at least for Australia (Hamilton 1997), Scotland (Hanley etal. 1999) and France (Nourry 2008). In this article the Finnish GPI has been calculated according to themethodology presented by Talberth et. al. (2006).2. Indicators of sustainable social progressHanley et al. (1999, 57) have classified the indicators of sustainable development into three majorgroups, namely: 1. economic, 2. ecological (environmental) and 3. socio-political. The first groupincludes such measures as Genuine Savings (GS). GS aims to estimate nations net investments to manmade,human and ecological capital. The second group of indicators includes among others EcologicalFootprints (EF). It aims to estimate the quantities of biosphere available to mankind in physicalmeasures and has no linkages to economic values. Purely ecological indicators have the advantage oftaking the carrying capacity of biosphere into account. Their problem however is that pure quantitymeasures turn poorly to the languages of economic and social systems. These indicators are also oftenheavily determined by the size of population.The third group of indicators contains for example Index of Sustainable Economic Welfare (ISEW),Genuine Progress Indicator (GPI) and Human Development Index (HDI). These indicators attempt tointegrate into the basic economic data the essential environmental and/or social factors. Thus they haveboarder perspective to economic development than the conventional GDP measure. Theseapproximations of welfare in society give additional information about the aggregate welfare in society.As such indicators of this group all try to describe improvement in the quality of life. Opschoor (2000,365) states that, from the theoretical economics side, a much more promising approach is to go formulti-dimensional indicators.The Index of Sustainable Economic Welfare (ISEW) and Genuine Progress Indicator (GPI) give abetter picture of people’s actual well-being. However, they require the “right” pricing of environmentalhazards in order to function properly. The successor of the ISEW, the Genuine Progress Indicator (GPI)was first presented by Cobb, Halstead and Rowe (1995) in 1994 and later developed by Talberth et al.(2006) in the organisation Redefining Progress. The Genuine Progress Indicator takes from the GDP thefinancial transactions that are relevant to well-being, namely personal consumption adjusted for incomeinequality. The adjustments include further economic dimensions of development, most of themexternalities. The major difference of GPI compared to the ISEW is the inclusion of externalities such ascrime levels and costs of underemployment. The GPI also tries to include larger share of the non-marketproduction, by way of accounting for e.g. voluntary community work.306