PART ONE -INTRODUCTION
Ian D. Rutherford
One of the challenges of sustainable development indicator work is the requirement, on the one hand, to determine the direction the whole system is moving in order to understand at the macro level whether it is sustainable or not and hence to set macro policies to correct the situation and, on the other hand, to provide adequate information for decision making at the micro level, where action really counts. Since the ecosphere is clearly more than the sum of its many parts, it is necessary to try to understand things holistically. It is also clear that the evolution of the ecosphere, including humans, will be the result of millions of individual decisions made at the individual and community levels, at the level of individual firms and agencies, and within various economic and social sectors. The struggle to find meaningful whole system level indicators is partly about trying to find indicators that are more than just a suitably weighted summation of many lower level ones. Moreover, there is considerable value in trying to understand some of the individual pieces of the puzzle through lower level indicators. As in any area of science, understanding usually requires both analysis and synthesis.
As opposed to dissection and reintegration, another way of building up an understanding of how a complicated system functions is to look at it as a whole from several different perspectives. The more perspectives we take, even though they may overlap, the more information and understanding we gain. This is rather like viewing the earth from a satellite, from several different points in space and in several different wavelengths. Just by looking at the same scene through different filters and from different angles, much can be learned without actually examining it close up, piece by piece. In the context of trying to understand whether the struggle of human beings to improve their lot and their consequent interaction with the ecosphere is sustainable or not, there is probably value in examining the question from as many points of view as possible. The main discipline areas (environmental, economic and social) that have struggled with the concepts of sustainable development have a particular perspective and set of methodologies. Rather than restrict those perspectives and methodologies to their 'home' domains, it is necessary to see what new insights might result if each is applied to the system as a whole. Many of the papers in this chapter illustrate this principle.
SUSTAINABILITY FROM AN ENVIRONMENTAL PERSPECTIVE
Environmentalists tend to focus on the environmental impact of human activities and to worry about the limits of this impact. They are concerned about preserving what economists would call natural capital. They are much more conscious of the fact that every living thing on this earth depends ultimately on the primary productivity of plants. They are convinced that maintenance of the net primary productivity of the earth and its plant life is critical and that there is a limit to human beings' expropriation of it. Many environmentalists believe that we are already perilously close to the limit. Not knowing exactly where the limit lies, they urge caution. They worry that if we go over the brink we may not be able to draw back. They know that ecosystems are complex systems capable of catastrophic flips from one quasi-stable state to another. In their world, the biggest source of surprise is nature. Environmentalists tend to be more impressed by human stupidity than by human ingenuity. They worry that we may be too arrogant to recognize the limits of our ingenuity. It is environmentalists who formulated the pressure-state-response model for environmental indicators and who advocate it for indicators in the other areas.
The paper in Box 3A illustrates the approach taken in the developed countries (the OECD) towards defining indicators that might be useful for measuring environmental performance. The indicators are designed to be applied at the country level. Many of the developed countries follow a similar model for their own environmental indicators.
Although the OECD framework includes pressure, state and response indicators for each of the environmental issues of concern, the focus is really on measuring progress and hence on the changes of the pressure and state indicators. Many of the issues causing concern extend beyond the boundaries of a single country so that only a country's pressure indicator is relevant as a measure of that country's contribution to the broader problem. For other issues, e.g. acid rain, the problem revealed by a state indicator may be due largely to some other country upstream, in which case the pressure and response indicators for the upstream country may be more relevant.
Given these difficulties of linking pressure, state and response within a single country, many analysts have concluded that it is best to focus just on the pressure indicators. They are often the easiest to obtain, being readily calculated from economic statistics already available. For those problems which transcend the boundaries of a single country, it is natural to think in terms of aggregating the pressure indicators for a number of countries within a region or even for the whole globe. For a single country, it may be possible to aggregate pressure indicators for different issues to come up with something that measures a country's overall environmental pressure. The paper by Moldan in Box 3B proposes a system for classifying pressure indices in a two dimensional matrix wherein one dimension is the type of pressure (input pressure for resource uses and output pressure for pollution production) and the other is related to whether the pressure arises from the use and transport of resources, measured in mass units, the use of energy, measured in energy units, or the use of land, measured in area units. He proposes the use of 'quality coefficients' to express the relative impact of each pressure. These would reflect not only scientific considerations but political and social ones as well. They could be used as weights for aggregation.
Geobiosphere services are what economists would call environmental capital. One way of looking at environmental capital is to focus on the capital itself. There are many forms of environmental capital, both renewable and non-renewable and many problems of definition and valuation. A good deal of work has been done already on the evaluation of environmental stocks. In the context of environmental pressures, it is natural to consider the outflow of natural capital which can be related to the flows of material and energy associated with modern industrial activities. Such flows may result from the extraction and transport of raw materials and energy or the transport and eventual disposal of the semi-finished or finished products. They represent a drawing down of the capital (a using up of the resource) or a spoiling of its quality (resulting from pollution). The paper by Bringezu in Box 3C discusses indicators derived from material and energy flow accounting procedures corresponding to the first of Moldan's categories. Two indicators, Total Material Input (TMI) and Total Material Consumption (TMC), are defined and calculated for the German economy. Although the purpose is environmental, the methodology is drawn from economics.
It is significant that a large fraction of Total Material Input or Total Material Consumption is associated not with material actually incorporated in the final products but rather with material that is discarded at some point in the processing. This latter part is referred to as the ecological rucksack. TMI and TMC provide a link between consumption and potential environmental impact. They make explicit the fact that many of the products which are taken for granted by those living in developed countries and which are sought after by the rest of the world have associated with them a hidden and perhaps reducible burden. The Wuppertal Institute has suggested that a reduction by a factor of four to ten of TMI is required for sustainability if we are to maintain current levels of consumption in the developed world and satisfy the demand for greater consumption elsewhere. The paper in Box 3D provides a breakdown of TMI for various economic sectors of the German economy. By knowing which sectors are the biggest contributors, we can perhaps see where to concentrate efforts at the dematerialization of consumption. Similar approaches are used in Box 4J when characterizing the environmental performance of Austria.
Material and energy flows are important aspects of the modern industrial economy that have numerous but not very specific environmental ramifications. It seems obvious that reduction of these flows will reduce their impact, even though it is difficult to link material flows in their aggregate with specific environmental consequences. One of the most important attributes of natural capital to be maintained is the diversity of biological systems. Maintenance of diversity is important not only because of its potential to provide existing and yet undiscovered human benefits but also because biological diversity is the basis for the stability and resilience of ecological systems and their ability to deal with stresses. It is urgent to develop suitable indicators of biodiversity and to link them to specific human activities which have an impact. Box 3E provides an outline of the current state of development of such indicator which is not quite satisfactory. Much more work is needed especially in the context of the Global Convention on Biodiversity.
State indicators are only useful if we know the thresholds of states or their rates of change that reflect a potentially unsustainable human impact. Clearly, it is important to know the range of states and rates of change that could occur in the absence of human influence. That can be determined by studying what has happened in the past, especially before the development of high impact human activities. Berger, in Box 3F, provides a discussion of information available from the geological record of past natural changes which might provide a baseline for indicators based on more recent data. Such information can help provide a means of judging whether human activities are resulting in pressures outside the range of naturally occurring ones.
SUSTAINABILITY FROM AN ECONOMIC PERSPECTIVE
Economists tend to look at the world in terms of stocks and flows of capital. They are not just focused on conventional monetary or economic capital but are open to considering capital of different types, including natural or environmental capital and human and social capital. From their perspective, the problem of sustainability is one of preservation and maintenance of capital in all its forms. They talk naturally in terms of living only off the interest so that there will be something left to generate earnings for the next generation. They see a strong analogue between sustainable development and financial portfolio management, where the problem is to maximize returns and to preserve and even increase the underlying capital. They argue about the substitutability of one form of capital for another. They know from portfolio management that it is necessary to shift the emphasis from time to time from one type of capital to another. The idea of reinvestment of a part of earnings can be seen as applicable not just to the economy but to the environment and society as well. Economists tend to be optimistic about the ability of human beings to adapt to whatever circumstances present themselves and to solve whatever problems may arise through new technology and other forms of human ingenuity. In their world, the biggest source of surprise and unpredictability is the human race itself.
Environmentalists have frequently criticized the accounting system and statistical indicators developed by economists as incomplete and lacking proper consideration of the value of natural capital. Economists have responded by proposing the expansion of the system of national accounts to include natural values. Bartelmus in Box 3G describes the approach of the United Nations Statistical Division to 'greening' the national accounts, the UN System of Integrated Environmental and Economic Accounts (SSEA).
Related to the greening of national accounts is the problem of realistically estimating overall wealth and contributions to that wealth, genuine savings. Recently the World Bank has come up with some new approaches to both of these issues. In Box 3H, O'Connor discusses the methods reported on in the World Bank's Monitoring Environmental Progress, 1995 and 1996.Economic indicators have focused mainly on the growth in gross domestic product (GDP). This linear focus, however, has undermined quality of life. Hence, the New Economic Foundation has developed a new set of indicators to track the progress of society and to show how sustainable welfare changes over time. Recently, the Index of Sustainable Economic Welfare (ISEW) for the United Kingdom was published (Box 3W).
Both ecologists and economists deal with complex non-linear systems which are continually evolving but which sometimes maintain a quasi-stable configuration for a considerable length of time, separated by periods of relatively rapid transition to a new configuration. Sometimes these changes are part of the natural evolution of the system. Sometimes they are a response to an outside stress. Human beings make value judgements about the desirability of the states and the transitions between them. Ecologists talk about the integrity of an ecosystem to maintain its state or at least its natural evolutionary path in the face of imposed stress. They refer to this as ecological integrity. Economists talk about the vulnerability of an economy to outside forces. In Box 3I, there is a discussion of a Vulnerability Index proposed to measure the ability of states, particularly small island states, to maintain their economic prosperity in the face of uncontrollable outside forces. This is certainly an important aspect of economic sustainability. There may be analogues for ecological systems and their sustainability.
The most important part of the human economy, both for the creation of human- made capital and for the impact on natural resources and the environment in general, is industry. For the most part, the flows of energy and materials discussed earlier are the result of industrial activity. If we are to de-materialize our economy, the action must occur in industry. Yet industry is not just the source of resource depletion and environmental degradation; it is an essential part of the development equation from the point of view of wealth creation. Industry is also a prominent actor on the social stage. Industries require human labour and human brains, as well as natural resources. Since industry cannot always go to where these human resources are available, the siting of industry can have a profound influence on where and how people live and communities grow. How industries treat their employees, whether they provide jobs that are meaningful in human terms, whether they provide continuous training, whether they become involved in community affairs and a host of other questions link them with another set of questions that can be raised about the viability of the communities in which they operate. In Box 3J, Forstner discusses potential indicators to capture industry's role in social, economic and environmental sustainability.
In the environmental view of the world, it is natural to develop indicators around the notion of environmental issues because these are the problems that must be addressed. These issues become one dimension of most of the frameworks that have been developed from an environmental perspective. From an economic perspective, it is more natural to view the world in terms of economic sectors and to develop indicators for them. This is, at least, partly because each sector wishes to highlight indicators of its contribution to human welfare. Three economic sectors that have addressed questions of sustainability, from both points of view, are agriculture, forestry and transportation. In Box 3K, Tschirley discusses indicators for agriculture and sustainable rural development. In Box 3L, Zentilli outlines the process and criteria for the development of indicators for sustainable forest management and, in Box 3M, the OECD approach to transportation sector indicators is discussed. All of these illustrate the interplay between an environmental pressure-state-response approach and an economic sectoral benefit approach.
SUSTAINABILITY FROM A SOCIAL PERSPECTIVE
Sociologists, like economists, focus on the human component of the ecosphere. Their concerns are about human well-being in all its facets and about the conditions necessary to improve it. They are concerned about human and social capital and are convinced that raising the level of both will pay dividends. In fact, they may be crucial in terms of both improved economic productivity and environmental protection. On the chicken and egg question of which comes first, improved economic welfare or improved social welfare, sociologists are firmly in the latter camp. Their colleagues, the economists, are mostly in the former. They know that human affairs are strongly influenced by human perception of conditions and events, by feelings and fashion, superstition, expectation and predisposition. They are accustomed to the use of systems concepts such as the determination of group behaviour and the macro characteristics of society by the micro-level characteristics of individuals and their interaction with one another. If anyone can figure out what needs to be changed in order to influence human behaviour in sustainable directions, it is probably the sociologists.
Human well-being is not an easily defined concept. Nor is it easy to define how much of it is adequate. Questions of wealth and of income are certainly important but they are far from the whole story. Access to basic services such as clean air and water, adequate shelter, medical services and education, etc. is certainly important and may or may not be related to income or wealth. The Human Development Index of UNDP tries to capture the essential elements of the human dimension of sustainable development (Box 3N).
Food for the mind and the spirit, as well as the body, are also important. Perhaps well-being should be defined in terms of freedom from want and deprivation of all kinds. Perhaps it would be better to measure the degree of want and deprivation at the bottom of a society rather than the average availability of the services judged necessary. Is it possible to define a minimum availability of important services to ensure sustainability? Some of these questions are explored by McKinley in Box 3O.
Human capital describes the sum of the capacities, abilities and knowledge, etc. possessed by the individuals of a society. Yet there is something else which reflects the fact that the whole can be more than the sum of the parts. A human society, like any complex system, functions more effectively when its individual parts work together, than when they do not. This quality, which is a quality of the group but which reflects the effectiveness of the interactions between the members of the group, can be called social capital. More and more analysts are discovering that one of the most important factors in the productivity or the effectiveness of human societies is this ability to work efficiently and effectively as a team. In Box 3P, MacGillivray examines two candidates for indicators of this kind of social development.
The participation of youth in the development of indicators is an important initiative (see Box 3Q). It empowers young people and gives them the opportunity to help form a sustainable future. Youth have their own particular factors which need to be addressed. They are the ones who will benefit the most from the developments and initiatives forged today towards ensuring sustainability.
The social aspects of sustainability are closely related to institutions. Until now, there have been very few attempts to capture the institutional dimension of sustainability. Box 3R presents an attempt to do so at both national and international levels.
International treaties and conventions more and more often rely on indicators to help secure both compliance of the parties to the treaty/convention and the effectiveness of the policies and actions. A pioneering and indeed, landmark convention in this respect was the UN ECE Convention on Long-range Transboundary Pollution (Geneva Convention, 1979). Within the context of the many activities conducted under this Convention, the concept of critical loads and critical thresholds was developed (Box 3S). More recently, the UN Framework Convention on Climate Change and the UN Convention on Biodiversity are in acute need for appropriate indicators. Although these are currently being developed, nothing concrete can be reported so far.
One of the prerequisites for human well-being is good health and one of the conditions necessary for good health is the absence of toxic agents, especially human-made ones, in the environment. The medical profession refers to health conditions induced by environmental agents, or for which environmental agents are a contributing factor, as 'environmental health'. This is quite different from the use of the term by ecologists, although the factors in the environment which make human beings sick may also be making the environment sick as well. The concept of environmental health links both environmental issues and human health issues in several ways. Environmentalists, though not ecologists, are fond of using the analogy of human health for the health of ecosystems. A better analogy for ecosystems might be human public health, which refers to the health of populations as a whole, rather than the health of individuals. Human health, or at least the potential for negative human health effects, may be best monitored by environmental indicators rather than human health indicators, as discussed in Box 3T by Corvalán et al.
Most of the world's people live in cities and the problem of sustainability of human welfare is largely related to the well-being of cities. Many world cities are using their own sets of indictors that are published on a regular basis. In Box 3U an example from the City of Prague, Czech Republic is presented.
Since 1988 UNCHS (Habitat) has been working on indicators of housing and more recently, indicators of sustainable urban development in the broader sense. The indicators that have been developed cover not just housing issues but run the full gamut of social, environmental and economic issues, typical of urban areas. In the housing area alone, there are 53 indicators but these have been combined into one index composed of six sub-indices. The Habitat programme is discussed in Box 3V by Auclair.
CONCLUSIONS
The material in this chapter illustrates the variety of environmental, economic and sociological approaches that have been taken to developing indicators of sustainable development. Although the starting points and perspectives may be quite different, these approaches nearly all reflect a recognition of the interconnection of the environment, the economy and society. They nearly all face the reality that the best indicators conceptually may not be available in practice, either because basic data is not collected or because the methodology to turn available data into indicators of the desired type is unavailable. They all point to a similar problem: the completion of a logical framework of indicators requires filling many such gaps. On the other hand, it may not prove necessary to fill these gaps because, in the final analysis, indicators that really do catch the attention of policy and decisions-makers will be chosen not by those who advocate logical frameworks but rather by the decision-makers themselves because they are perceived to be useful for monitoring something that is important. The best indicators are those that are almost instantly recognized as being really relevant to an important policy goal. Whether they are highly aggregated indices or single variables, it does not really matter. Inevitably, the recognized set of important indicators will be few in number at anyone time, although the composition of the set will certainly vary with time, as attention to particular issues waxes and wanes.