The article in the url below looks like an interesting experiment. It is a reaction against the idea of GDP as a meaningful measure of a country's economic output; in particular, because it does such a poor job of accounting for "the full economic costs of depleting America's natural assets":
"[Last summer] the White House unveiled a 15-year plan for an ambitious—albeit wonkish—environmental initiative. Its Office of Science and Technology Policy and a dozen other government agencies aim to develop natural-capital accounts that record changes in America's stock of natural resources, and quantify losses. Armed with new data, they plan to create a single statistic, alongside GDP, that rates how the country's resources are faring."
This project is starting immediately ("the first numbers are expected as early as [2023]") and will continue to evolve, with a deadline of 2036 for these measures to "become core statistics." The name for the new over-arching measure will be "Change in Natural Asset Wealth," and is quite the undertaking:
"Scientists must first measure ecological changes such as water pollution (typically tallied in parts per million for a specific pollutant), soil erosion (counting the amount of soil lost, say) and the degradation of wetlands (the area reduced). Economists must then attempt to determine prices."
The range of potential metrics seems endless, as suggested by the limited data currently being collected by the World Bank. Between 2010 and 2018, for example:
"… the value of forests and mangroves in America declined by 10%. That of ten minerals—among them copper and iron—dropped by 51%. Beekeepers have lost one-third of their colonies a year since 2006, according to Bee Informed Partnership, a non-profit group, and renewal rates fail to keep bee populations steady."
These assets are essential to the economic health of the nation (e.g., "Making electric vehicles and wind turbines would be impossible without copper"), but that does not mean assigning prices is easy. Current methods seem less than satisfactory:
"Some, like timber, are traded in cash markets, which allows researchers to set their worth as the dollar amount people pay for them. For more complicated [assets], like rivers or mountain ranges, economists survey people to gauge how much they are willing to spend to preserve them, or how far they will travel to access them."
Nevertheless, this is essential work that is already being pursued globally – e.g., the UN Environment Programme "now tracks broad measures of natural capital in 163 countries," and the article also notes that previous administrations in the U.S. attempted something similar, although political ideology with changes in administrations derailed those earlier efforts – shifts that have already proven costly:
"Eli Fenichel, an assistant director at the Office of Science and Technology Policy, who helps organize the initiative, believes that climate change would not have grown to the current crisis level had the cost of the carbon externality been tracked in official natural environmental-economic accounts early on."
Take care
David
David Chandler
© Sage Publications, 2023
The Biden administration aims to quantify the costs of ecological decay
September 17, 2022
The Economist
Late Edition – Final
28-29
