The problem with the Human Development Index in an era of ecological breakdown

 

If you haven’t come across the Global Footprint Network yet, check them out.   Based in Oakland, CA, they produce fantastic data on the Ecological Footprint (EF) of nations around the world.  EF is measured in units known as “global hectares” – an omnibus measure that includes resource use, waste and emissions.

The researchers at the Global Footprint Network calculate that our planet presently has enough biocapacity for each of us to consume about 1.8 global hectares per year.  Anything over this means a degree of resource consumption that the Earth cannot replenish, or waste that it cannot absorb, and contributes to ecological breakdown.  1.8 global hectares is roughly what the average person in Ghana or Guatemala consumes.   By contrast, Europeans consume 4.7 global hectares, while in the US and Canada the average person consumes about 8 – many times their fair share.

This data raises an important question.  What is the relationship between consumption (as measured by Ecological Footprint) and development?  Of course, we know that EF is tightly coupled to GDP.  But what about human development indicators?  What about well-being?  Is it possible for a nation to live within the threshold for biocapacity while at the same time having high standards of living?  Ghana and Guatemala are hardly exemplary in terms of their social indicators... are there better models out there?

The researchers at GFN have answered these questions with a fascinating chart that plots the Ecological Footprint of nations against their score in the Human Development Index (HDI).

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The results are striking.  They show that as HDI rises, so too does EF.  The two seem to be quite tightly coupled, such that achieving the higher levels of HDI generally means vastly outstripping biocapacity.  There are a few outliers: countries that achieve "high" HDI (above 0.7) while nonetheless remaining within biocapacity.  But all of the nations that achieve “very high” HDI (0.8) outstrip the biocapacity limit.  Depressingly, there are no nations that fit within the box for sustainable development at very high HDI, although one country – Cuba, represented in grey – comes very close.

This seems like a sensible approach, on the face of it.  And the goal, of course, is for each nation to become more efficient at converting ecological footprint into human well-being, finding ways to enhance human flourishing with minimal pressure on the planet.  But if that’s the objective, there are problems with using HDI. 

HDI is calculated as the average of three different indicators: life expectancy index, education index, and income (where 1 = GNI per capita of $75,000, on a logarithmic scale).  Of course, it makes perfect sense to compare life expectancy and education against EF.  But it does not make sense to compare income against EF.  The reason is because income, like GDP, is inextricably linked to EF.  While it is possible to achieve enormous gains in life expectancy and education with relatively little EF, it is not possible to grow average income up to $75,000 without vastly outstripping biocapacity.  Sure, we can achieve some relative decoupling of GNI from EF (with rapid technological innovation and aggressive taxes on carbon and resource extraction) but not absolute decoupling.  Income cannot go up to $75,000 while EF goes down to 1.8.  It is a physical impossibility. 

So the HDI approach is self-defeating.  As long as income counts as 33% of HDI, achieving very high HDI by definition requires growth to the point of outstripping biocapacity.  If all nations in the world were to pursue the highest HDI (which is of course presently the plan), we would “develop” ourselves into ecological collapse.

We need a better measure, one better suited for the Anthropocene.  As I see it, the income component of HDI is underjustified.  Average income does not tell us very much about well-being. There are a number of countries with relatively low income that nonetheless have high levels of human well-being.  Costa Rica, for example, has a higher life expectancy than the US and happiness indicators that rival those of Scandinavian nations.  But its average income is only $11,000, less than one-fifth that of the US.

If you take income out of HDI, then Costa Rica qualifies as having “very high” human development.  And its EF (2.8) fits well under the biocapacity line of 1961.  Many other countries are also in the very high category with even lower EF, including Serbia, Romania, Albania.  Cuba qualifies as very high, with an EF of only 1.95, extremely close to today’s biocapacity limit.  And Georgia qualifies as very high with an EF of only 1.58. 

The problem with HDI is that it is an unreformed indicator; it still has a strong element of the old GDP-focused development mindset in it, and so is not fit for purpose when it comes to pursuing truly sustainable development.  Indeed, some middle-income nations – like the ones listed above – excel at human development and yet are punished in the HDI rankings for having lower income.  Why punish them thus?  Shouldn’t we instead look at them as models to emulate, and build on, as we try to reverse ecological breakdown?

Of course, income may contribute to well-being in ways that health and education indicators cannot capture.  But there may be other indicators that we could include to get at this, such as happiness or life satisfaction.  Or, alternatively, we could put a “cap” on the income component so that anything above, say, $15,000 counts as 1, rather than requiring nations to grow to excess in order to achieve that standing. 

Because HDI is lashed to income, it works against the possibility of a shift toward a post-growth economy.

Consider this thought experiment.  Let us say that rich nations choose to follow post-growth and de-growth principles, slowing down ecologically harmful and socially unnecessary economic activity (fracking, advertising, McMansion building, SUV production, beef farming, single-use plastics, food waste, planned obsolescence and so on) in order to reduce their ecological footprint.  At the same time, they introduce pro-human policies: increasing the minimum wage and improving labour laws so that workers claim a bigger share of total income, socializing healthcare and education, controlling house prices by regulating speculation, shortening the working week and introducing a job guarantee. 

In such a scenario, average income would go down, but there would theoretically be no drop in quality of life – indeed, quality of life might even improve.  People would likely be happier because they would have to work less, freeing them to spend more time with their loved ones and to engage in useful and creative pursuits. Assuming health and education indicators stayed the same (in reality they would probably improve), HDI would fall – but this would not be an accurate indicator of what is really going on.  Indeed, it would obscure the most important part of the story.

HDI was invented in 1990 as an antidote to the GDP-based conception of development.  It was considered progressive for its time, but it is clear now that it did not go quite far enough.  Nearly 30 years on, it’s time for a better measure – one that will aid rather than hinder us in our efforts to build a more ecological model of development.