trends and future of sustainable development - TransEco

warming, growing environmental burden of economic activities, over exploitation of natural resources orimbalance of income distribution. Thus the GDP simply misguide the society to think that we were onthe right track.3.3 Basis of the Finnish ISEW and GPIThe compilation of the Finnish ISEW was based on the ideas presented by Daly and Cobb (1989).Methodology of Finnish ISEW calculation followed the original ideas very faithfully. The time-seriesfrom 1960 to 2000 of Finnish ISEW were first presented by Hoffrén (2001). Later they have beenupdated, converted to euros and the time-series was continued till 2010.The methodological basis for the compilation of the Finnish GPI was the U.S. GPI calculated inTalberth et. al. (2006). Though the methodology presented in Talberth et al.(2006) was followed quitefaithfully in the calculation of the Finnish GPI, on account of data limitations some changes were made.The variables Cost of Household Pollution Abatement and Cost of Ozone Depletion were left out due tolack of data. Also, instead of Value of Volunteer Work, Value of Participatory and OrganizationalActivities was included in Finnish GPI, and instead of Cost of Underemployment, Cost of Unemploymentwas calculated. Both changes were made due to lack of data on original U.S. variable. It can be alsoassumed that the lack of data is at least partly due to insignificance of the U.S. variable to the Finnishsociety, and that the included factors describe Finland better. (e.g. see Rättö 2009.) The Finnish GPI wasfirst presented by Rättö (2009), whose time-series covered years from 1960 to 2007. Later they havebeen updated and the time-series have been continued by Jukka Hoffrén till 2010.4. Analysis of the Finnish ISEW and GPIThe largest differences between Finnish GPI and ISEW are related to the monetary pricing ofenvironmentally harmful impacts and the treatment of some social factors. In order to obtain the ISEWand GPI, factors such as unpaid household work and services obtained from consumer durables, areadded to weighted personal consumption, and several phenomena of environmental deterioration andwasteful activities are subtracted from it. GPI evaluates many environmental impacts, especially the oneswith long-term effects, higher than ISEW. The income index used in ISEW is on the other hand morereceptive to changes in income distribution, which makes ISEW faster to react to changes in incomedifferences. ISEW also accounts for some public expenditures that are absent in GPI. The progresses ofthe Finnish Gross Domestic Product (GDP), Index of Sustainable Economic Development (ISEW) andGenuine Progress Indicators (GPI) at real prices are depicted in Figure 1.308