Graduate School of Engineering
Kyushu University
Measuring progress towards sustainability, beyond GDP
■ Inclusive Wealth
Inclusive Wealth (IW) is an index to measure sustainability and human well-being. We face the limitation of GDP to evaluate welfare. Including Kenneth J. Arrow, who won Nobel Memorial Prize in Economic Sciences, 22 economists developed the idea of IW, beyond GDP. At the Rio summit, where SDGs are adopted, the UN published IW. To measure the human-wellbeing inclusively, IW consists of three main wealth: produced capital (PC), human capital (HC), and natural (NC).
IWR 2014
■ Measuring sustainability
IW evaluates stock (productive base), not flow (consumption and investment). Thus, the time trend of IW shows the sustainability. The merely way to ensure sustainability is investments. IW can visualize the required types of investment and its amount at macrolevel since IW makes other values, such as education and environmental preservation, comparable. In this way, IW allows us for evidence-based policy making and budget allocating.
IWR 2014
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