Inclusive Wealth Report 2023: Measuring Sustainability and Equity

by Edward B. Barbier, Shuning Chen, Barbara M. Fraumeni

For keeping track of sustainability of the economy and well-being of people, we need to move beyond just a flow (GDP) approach to use a stock approach to measure wealth -- one that considers the aggregate value of all capital assets-- to take our use of natural capital into account, along with human and produced capital. This view is echoed by the United Nations Secretary General, who’s Common Agenda clearly outlines the need to move beyond GDP as the central measure of national progress. Tracking a country’s GDP over time does not tell us whether the development path being pursued is sustainable. The IWR 2023 undertakes a comprehensive global assessment of the inclusive wealth of 163 countries for 1990–2019. The IWR 2023 adds an explicit focus on the nexus between inequalities and natural assets, highlighting that the loss of nature negatively impacts rural and poor communities in developing countries most directly and most acutely. The report highlights how inclusive wealth—incorporating natural, human and produced capital—is a sophisticated yet streamlined measure for assessing national and global development and economic progress. The Inclusive Wealth Report 2023 is the fourth iteration of the Inclusive Wealth series. The Inclusive Wealth paradigm demonstrates that future economic possibilities depend on the current management of all forms of wealth. Focus on inclusive wealth and estimation are the building blocks for achieving the Sustainable Development Goals. The inclusive wealth index measures the wealth of nations by carrying out a comprehensive analysis of a country’s productive base including the assets from which human well-being is derived, - manufactured, human and natural capital. Thus, the IWI measures a nation’s capacity to create and maintain human well-being over time.

ebook

Published January 1, 2023

Reviews

[Brian Cham · Rating 4 out of 5]

Excellent and in-depth overview of an alternative measure to GDP that considers a holistic view of different priorities that an advanced society ought to pursue for sustainable development, while acknowledging that these are a form of "wealth" in themselves. The Inclusive Wealth Index is lesser known than other measures of development like the HDI, which is a shame considering that the IWI directly incorporates environmental health. In my opinion, the environmental aspects don't even go far enough because the costs of climate change and fossil fuels are underrated. Also, as far as the report itself goes, the diagram graphics were very bad quality and not very catchy, making them less useful as punchy infographics of the type necessary in today's digital age.