Moving Beyond GDP and Achieving Our Common Agenda with Natural Capital Accounting

The world has changed enormously over the past 80 years—we are richer and more interconnected than ever before, yet we also face unprecedented challenges, notably the climate and biodiversity crises. The Earth is hotter than it has ever been, with the warmest seven years occurring since 2015. The state of biodiversity is doing no better, with roughly a quarter of species assessed facing a high risk of extinction in the near future. Despite the brave new world that humanity now faces, one thing has remained steadfast over these past 80 years—our use of gross domestic product (GDP) in decision making. Gross domestic product is perhaps the most well-known and used statistic in the world. Virtually all countries compile GDP, which is derived from the System of National Accounts (SNA). However, over time GDP has been wrongly interpreted as a proxy for overall wellbeing and welfare rather than what it is—that is, a summary figure for economic activity. Unfortunately, this misuse of GDP has been at great peril, particularly to the environment.