GDP as an indicator, or not

GDP has had its share of ups and downs recently, both in real terms and as an indicator. If economy was the only thing worth measuring, then a case can be made for GDP, but it’s not.

The World Economic Forum takes a good look at this in their article from November:

GDP is no longer an accurate measure of economic progress. Here’s why

You see, GDP does not account for losses in natural capital, the part of nature that keeps us alive and provides numerous and valuable natural benefits.

If, for example, a river becomes polluted by an industry and a city must build infrastructure to clean that water, GDP rises (huh?!?) because more money is being spent in the economy to remedy what was a ‘free’ resource. I know this sounds simplistic, but that’s the way GDP works. So, the economy could be booming in the short term, as measured by GDP, even if the very foundations of the economy are being undermined.

It’s why economists must hate ‘land banks’ like national parks, provincial parks and nature conservancies. They don’t contribute to the economy in a meaningful way. Going for a hike through the forests and mountains only generates GDP for the clothes you wear, the boots on your feet and your daypack. But mow down the trees and build a golf course and ski hills – now you have GDP!

Another example: if a storm ruins a dozen houses, GDP rises because money is being spent in the economy to repair them – hiring tradespeople, purchasing building supplies. Sadly, it’s also why war increases the GDP of countries supplying arms. GDP is blind to all the other losses, provided the economy gains. Sickening, isn’t it?

Read the article linked above as it has a few excellent alternatives, one of which is being developed and used by Statistics Canada, “one of the finest statistical organizations in the world“.

There is also an excellent series of articles about the Future of GDP at the WEForum website: Agenda in Focus: Beyond GDP


Comparing population densities across Europe in a more meaningful way

Have a look at the work of Alasdair Rae via ’The Conversation’  on teasing apart the nuances of population density to allow more meaningful comparisons:

Air Pollution and Life Expectancy

Air pollution results in 7,700 premature deaths in Canada each year, report says (and costs Canadians $36 billion annually) (CBC)

Polluted air causes 5.5 million deaths a year new research says (BBC)

Imagine if a war caused between 5.5 million and 6.5 million deaths each and every year. Wouldn’t it become one of the priorities of government, business, industry and social action groups? Of course it would!

So why isn’t there more being done about air pollution?

To be fair, many jurisdictions around the world are working towards decreasing air pollution. In Ontario, where I live, air pollution has decreased significantly in the last 10 years. But it always seems to be the environmental action groups and governments who are forcing actions to clean up the air. Businesses and industries must be dragged kicking and screaming to do their part

What’s strange for me is that air pollution has been a topic de jour since I was a kid. First it was Acid Rain (acid deposition), then it became Smog, then Ozone Depletion, and most recently, Greenhouse Gas Emissions. These battle fronts all have the same culprit behind them: a laissez-faire, free market economy that allows industries and businesses to do as they please to earn a profit, even if it means additional health costs, environmental costs and premature deaths. It’s only when citizen groups begin complaining that something is done – and even then those citizen groups are written off as “environmentalists” or “liberals”. Yet, everyone is affected by this.

Personally, I just don’t understand this line of thinking. Sadly, as a society, “we” have become so enraptured with maintaining the relatively lower costs of goods and services that we scream when prices are higher due to balancing out some of those environmental and health costs that have not typically been included in the point-of-purchase cost of items – even when those low prices are killing us! I know, that sounds overly dramatic, but the clear link is there.

Recently, we’ve seen this irrational complaint of rising prices here in Ontario with electricity. We have shut down all our coal-fired generating stations and are now promoting clean energy. But this has driven up our electricity costs. To be fair, nuclear power has been hugely over-budget, but at least part of the rise in rates can be attributed to paying the true cost of electricity generation. (See Globe and Mail: Why does Ontario’s electricity cost so much? A reality check)

What brought this to mind is an excellent world map produced by the University of Chicago depicting the change in Life Expectancy caused by air pollution: Air Quality to Life Index (AQLI). Perhaps not surprisingly, there is only a negligible change in “the West”. After all, we have the tax revenue and (somewhat) independentgovernments who have thepolitical strength and will to enact the necessary legislation, although even that doesn’t go far enough.

Parts of Africa, India and China, on the other hand are being greatly affected by air pollution.

See: NY Times: Air so dirty, your head hurts (India) and Reuters: Northern China air pollution worsens January to July.

This nexus of air pollution, industry and health deservesgreater study and the U of Chicago AQLI website is a great place to start.

Brilliant essay: This World is enough

John Quiggin, professor of Economics at the University of Queensland states, 

For the first time in history we could end poverty while protecting the global environment. But do we have the will?

This world is enough is a must-read essay from Aeon for every teacher and student of IB DP Geography, A Level Geography and Ontario’s World Issues (CGW-4U) course, not to mention many university courses on geography, economics and resources.

Quiggan covers every major topic in these courses, from population changes, Malthusian and anti-Malthusian views and disparity to changing resource consumption, industrial agriculture, GMOs, global climate change and basic economics. Students may need to have the article broken down into sections to fully understand all he is saying, but it is worth the time spent analyzing Quiggan’s arguments.

Should we continue to use the term “developing world”?

This post is in response to me being about two years behind the times as I just came across the World Bank’s article from 2015: Should we continue to use the term “developing world”?

In a word, No! But it’s a good question to ask.

Two decades ago, geographers ditched the term “Third World” due to its negative connotations. Unfortunately, people still use it; even my Grade 7s said their Grade 6 teacher had used it last year. Now it’s time to move on from “Developing World”.

But is this just “political correctness” as some claim? I hate that term. It instantly categorizes empathetic, inclusive clear-minded thinking as something from the fringe that we only use because we’re supposed to, like kissing Aunt Edna’s furry cheek against our wishes.  Speaking to people and writing about them in ways that are not offensive should be our default position, especially for educators. We’re trying to improve things, not simply revert to lowest common denominator wordsmithing.

So, now that “Developing World” is out, how do we refer to countries that are struggling with development? After all, terms such as “failed states” are still in use. I like the term “emerging” markets, but that’s a very economics-based descriptor. Or, perhaps this notion of dividing the world into discreet groups of countries is no longer valid. As the article points out, the now late Hans Rosling quite correctly argued that the world’s nations are now far more similar than they were 50 years ago when the world was “conveniently” divided into two or three worlds. Even then, “the North” and “the South” (or the Haves and Have Nots, the West and the Rest, etc.) seemed not only inappropriate, but completely artificial. Perhaps the time has come for us to stop tossing ¾s of the world into one bucket.

We’re dealing with a continuum now. There’s no room for the “us and them” attitude that pervades development geography. At the same time, perhaps we also need to look at re-branding at least some of the “most developed” countries as being “over-developed”. You see, we’ve always taken for granted that more development is better than less development. What about those “highly developed” nations that have obscenely high GNIs per capita, yet treat their people with indifference? Or the “developed” countries that have overweight and obesity rates of 30%?

I just had a look at the most recent data for HDI and I was struck (as I always am) by the last column: GNI per capita rank minus HDI rank. countries with low numbers rank about the same in GNI per capita and HDI, which is somewhat expected given the correlation between wealth and development. But countries with high positive numbers rank much better in HDI than they do in GNI per capita, meaning they are doing much better development-wise than their GNI would otherwise indicate – like making silk purses out of sow’s ears.

Australia, New Zealand and Iceland have either 19 or 20 which means they rank considerably higher in HDI than in GNI. I would argue that’s a good thing – it’s these countries that should be applauded. Look at Cuba: it has a difference of 48. That is truly significant! They are making greater strides in human development than their per capita GNI would indicate. At the same time, though, the UAE has a difference of –35, Qatar is –32 and Saudi Arabia is –26. So, who really is “developed”? Who most has their s—t together? Perhaps a bigger shift is needed in how we categorize development and how well governments really look after their people. But that’s for another post.

Shame on OAGEE!

I was shocked this morning to see the post by the Ontario Association of Geography and Environmental Educators (OAGEE) on the World Economic Forum’s take in population growth. It read, “The clock is ticking…” and showed a video sensationalizing the problem of population growth as if it is behind all the world’s troubles.

OAGEE should be ashamed!! This line of thinking is antiquated! I’ve been teaching World Issues since the early 1990s and back then it was old thinking. Blaming the world crises on population growth is attempt by us in the west to place the blame elsewhere.

We, here in the West, with our resource consumption, are the problem! We consume and pollute 10 to100x that of someone in an LEDC, making our relatively smaller population far more dangerous to Earth’s systems. That makes 35 million Canadians equivalent to 350 million to 3.5 billion people in LEDCs!

Interestingluy, if you actually click through to the WEF article, it is far more rational. Besides, population growth is declining!!

Ever heard of Hans Rosling? Have a look at “Don’t Panic!” at:

Of course, maybe, just maybe, OAGEE is only doing what I like doing in the classroom – throw out a red herring to stimulate discussion!