Are the goals really ‘sustainable’?
The idea of Inclusive wealth has gained much prominence in the last decade with the joint efforts of eminent economists and ecologists, which has led to further mainstreaming of environmental economics as a subject to being included in graduate school (Dasgupta, 2008, 2011; Díaz et al., 1994). Inclusive wealth remains a keystone idea in ecological/environmental economics as it integrates the concept of wealth, belonging from both the natural world and the human-made world in economic terms. With UN Environment Programme (UNEP) publishing three Inclusive wealth reports of 140 countries in the last decade, the idea of ‘Inclusive wealth accounting’ is a significant indicator of the wellbeing of nature and humans in the Anthropocene era (Managi & Kumar, 2018).
Though UNEP has been publishing data since the last decade, the idea of Inclusive wealth accounting remains under-focused due to the biased popularity of GDP and HDI among politicians and policymakers. Since orthodox economic thinking still goes by the idea that nature is an externality with infinite resources, it ought to be a luxurious amenity rather than a capital stock, which is the primary source of significant economic activity. Therefore, in those orthodox thinking, GDP — captures economic activity and HDI — captures human wealth; thus, there is no need to accept Inclusive wealth accounting by accounting for natural wealth, thus enforcing more policymakers’ burdens.
Such heedless orthodox thinking is evident in the UNEP Inclusive wealth report. The reports show growth in the Inclusive wealth of 60% countries among the listed 140. However, when the data is sliced open, it is very well showed the development is mostly in produced capital (GDP), human capital (HDI), and harmful in case of natural capital (Managi & Kumar, 2018). Therefore, the shrinkage of natural capital will lead to distortion and upsetting the productive base, thus negatively influencing future generations’ wellbeing.
The degree of shrinkage in natural capital depicted in the inclusive wealth report is artificial to some extent since it is well established that natural capital accounting still needs to be mainstreamed. Most of the world’s bio-diverse regions are sadly inside the developing nations’ political boundaries, which still have a vulnerable economy. Subsequently, there is more focus on boosting economic activity rather than enforcing natural capital accounting and measuring. Therefore the primary concern is to understand the data-deficiency; as the aphorism says, ‘we measure, what we manage’ so we need to manage and measure natural capital stocks, just like the produced capital stocks.
If the natural capital is not getting accounted for, there is no clue to understanding the total shrinkage or rate of shrinkage of natural capital, thus influencing its inclusive wealth. It will be a hefty task to accomplish the conservation and management of natural capital, the ecosystems, and biodiversity without measure. The accounting should be mainstreamed with a bottom-up approach and must be assessed periodically, like other growth indicators.
With more than 1 million species at the risk of extinction, the threat of more than 1.7 million more zoonotic diseases, and the dependency of 50% global GDP on the natural resources, it is well established we are embedded into the biological system (Brulliard, 2020; Daily & Ehrlich, 1996; IPBES, 2019; Khatri & Waughray, 2020). Henceforth only accounting for GDP, Human capital will not alone suffice the wellbeing of the future and current generations.
However, then another question arises — has not been the policymakers not accounting for wellbeing? Well, they are. Sustainable Development Goals are being tried to follow by the nations and are maintained yearly to assess the goal (UNDP, 2015). Yes, ‘The goal.’ The problem with the plans is that they are definite at times, based on assumptions and assessments on a decade or century’s forecasted situation. Therefore, it will be harming ourselves if we set goal-based achievements to be the indicators of wellbeing. We cannot decide on specific pre-decided numbers for the wellbeing of the future when our inclusive wealth is shaken up by various social, political, and ecological perturbations daily at multiple scales. The Sustainable Development goals can be, though, as a criterion to fulfill the minimum requirement for humans’ wellbeing and environment.
To put all of the discussion into context, let take an example — India, one of the megadiverse countries in terms of biodiversity and an emerging economy. According to India’s recent SDG report (2019), the country has achieved 60% of its overall SDG targets. In a similar period, GDP growth has been near about 5%, while IW reports published in 2018 by UNEP have seen a growth of 2 points in the Inclusive wealth of the country. As per all these assessments, things seemed to be pretty well. However, is it so? The recent report by the UN Office for Disaster Risk Reduction (UNDRR) have reported almost doubling in the number of disasters in the past 20 years (2000–2019) in comparison to previously accounted 1980–1999. In the past two decades, India has recorded more than 300-plus climatic disasters affecting the country’s 1/3rd population directly. A similar negative trend has been of notice in the Inclusive Wealth report. However, it has shown positive growth, but when looked upon closely, the positive trend is attributed due to produced and human capital, whereas there has been a significant negative trend in the case of natural capital (Government of India & Niti Aayog, 2019; Managi & Kumar, 2018; Thakur, 2020).
The argument can be — when there is a positive trend shown in the indicator/index, so the worrisome negative trend might be a myopic scenario, which may not be of such significant importance. To counter the argument, natural capital is the primary resource of input for the other capitals, so a decline in minute scale for an acute period might have a prolonged chronic effect on the other capitals, thus influencing the productive base on which human wellbeing is thriving. Therefore, it is strongly opinionated while assessing the inclusive wealth of a state or nation. A higher degree of emphasis is being argued upon while accounting for the percentage of natural capital compared to other capitals dependent on the natural capital input.
It is well evident now that natural capital accounting requires mainstreaming. As it provides more involvement of various stakeholders with an enhanced interest in protecting and conserving biodiversity and ecosystems for their wellbeing. Few countries have already started having accounts of their natural capital, like the UK, China, Costa Rica, and India. Few initiatives have been taken from the Indian government and research organizations to have natural capital accounts locally and regionally (Bawa et al., 2020; Government of India (MoSPI), 2020; Verma et al., 2017).