Earth Day is not just a festive event to celebrate the Earth; it reminds us that every aspect of our lives -- from the water we drink to the price we pay at the gas pump -- is dependent on a healthy, abundant environment.
We all agree that we'd like our food to be pure, our water to be clean and our economy to remain immune to the price fluctuations of natural resources. Why is it, then, that the primary measure of our economic health -- the Gross Domestic Product -- actually considers environmental degradation an economic win?
In GDP terms, activities that create pollution are viewed as economic gains. Oil production -- pollution-intensive industry -- adds to the GDP; the cost of cleaning up oil spills or the health costs associated with treating air pollution-related illnesses increases the GDP; and intensive harvesting of forests or fisheries generates even more GDP-supported economic activity. Is this how we care to measure our future?
Though the GDP accounts for the depreciation of capital (land, machinery, etc.) throughout the economy, it fails to include the depreciation of natural capital: the loss of environmental services that are no longer available to us due to pollution, unsustainable use of renewable resources and intensive use of non-renewable resources.
Because our nation's progress cannot be separated from the well-being of the environment, it is imperative that we measure the depreciation of our natural capital. Redefining Progress, a national sustainability think tank, has developed the Genuine Progress Indicator (GPI) to provide a more accurate picture of the U.S. economy. By including in its accounting indicators such as changes in leisure time, income distribution and household and volunteer work, the GPI can uncover the breakdown of social structure masked by the GDP.
In addition, the GPI counts the depreciation of environmental assets and natural resources, including loss of farmland, wetlands and old-growth forests; reduction of stocks of natural resources, such as fossil fuels or other mineral deposits; and damaging effects of wastes and pollution. How did improper land use, poverty and pollution affect the booming '90s? According to the GPI, the cost of long-term environmental damage from 1990 to 2003 increased by 35 percent.
By applying the GPI, we can better understand the overall costs of natural capital depreciation and advocate for policies that ensure the viability of the Earth and what it provides us. Our current economic indicators fail to acknowledge the significant value of the environment and therefore misrepresent the wealth our economy holds, particularly when such services are lost.
Next time the new GDP figures are published, think about the story that is not being told. When we realize that a truly strong economy is dependent on securing a healthy environment rather than demolishing it, we will have a genuine reason to celebrate.
Calanit Saenger is a research associate with Redefining Progress, based in Oakland, Calif.