Agricultural land, forest covers , high ranges and beaches are being lost to urbanization and development. This has a serious and direct impact on the global ecological balance. For example a recent study states that there is an increase in the atmospheric lightening over northern America due to global warming. Alarming indeed because lightening triggers forest fires. The great barrier reef that skirts the north eastern Australian coast has been reduced by 50% over the last three decades.Among others coastal development and climate change are cited as reasons. Ocean warming has robbed coral off its color. The great Himalayas, prehistoric Western Ghats, Amazonian forests and mighty rivers are also facing threats. Ecologists world over believe we stand to lose much of our natural heritage in our lifetime, if we don't take precautionary steps right away. While this may be a bit exaggerated, it is true that our natural wealth is being depleted. We need to assess the instrumental value of our natural assets and then incorporate this in the annual balance sheet- Just as the movable and immovable assets along with their depreciation show up in a company's balance sheet.
And therein lies the challenge. How do we compute a nation's wealth? In 2012 United Nations and World bank brought together several like-minded agencies (UN University –International Human Dimensions Programme (UNU-IHDP) and the UN Environment Programme (UNEP), in collaboration with the UNESCOMahatma Gandhi Institute of Education for Peace and Sustainable Development (UNESCO-MGIEP), ASCENT Africa Sustainability Centre, the Malaysian Industry-Government Group for High Technology (MIGHT), Science to Action (S2A), the Ministry of Environment – Government of Japan, the UN University – Institute for the Advanced Study of Sustainability (UNU-IAS), and endorsed by the Science and Technology Alliance for Global Sustainability) under one umbrella to crack this challenge- how to do national wealth accounting. The team collected extensive data and devised a method to calculate national wealth wherein natural wealth is a non-negotiabel term. The details of this exercise are contained in the Inclusive Wealth Report 2012. The report recognized three components of the National wealth as follows:
While this empirical formula might seem naive it incorporates several layers of complexity behind the facade. HC is computed taking into account education, skill-set, health etc.Computing PC will be the easiest since it has a direct bearing on the GDP and cover all products (industrial + agricultural, roads,buildings etc.) NC, Natural wealth itself is viewed from three different angles: the intrinsic value, use value and optional value and assessed among other things in terms of irreversible uses and substitution possibilities and renewable resources. Inclusive Wealth index (IWI) evaluated based on these premises falls below the GDP and HDI. IWR 2012 was also the first step towards sensitizing governments for the need for a cautious balance between growth rate and ecological integrity.
IWR 2014 report is significant is a jump forward from the 2012 report for several reasons. For example while The 2012 reported covered 20 countries, the present report covers 140 countries. Its focus is the human capital; a great national asset which could very easily turn into a liability. The Human capital computation with educational and health components as key changemakers has received stringent scrutiny. As Anantha Duraiappahin states in the Preface of IWR 2014 -
"We hope that policy-makers at the international, national, and state level will see the IWR 2014 as a useful tool, and as encouragement to take the steps necessary to close gaps in data and to utilize the inclusive wealth accounts presented in the report as guidance "
Here is a snippet from the voluminous data in the report. Since BRICS countries will have a strong influence on the fate of the world in years to come-by, I have just picked the details of the BRICS group and thrown in western Europe and the USA and world data for comparison. This for the 20 year period 1990-2010.
While the results could be viewed through several filters ( single or in combination), what stands out remarkable is way forward to reach a win-win situation.
Reference :
1.UNU-IHDP and UNEP (2014). Inclusive Wealth Report 2014. Measuring progress toward sustainability. Cambridge: Cambridge University Press.
2..UNU-IHDP and UNEP (2012). Inclusive Wealth Report 2014. Measuring progress toward sustainability. Cambridge: Cambridge University Press
And therein lies the challenge. How do we compute a nation's wealth? In 2012 United Nations and World bank brought together several like-minded agencies (UN University –International Human Dimensions Programme (UNU-IHDP) and the UN Environment Programme (UNEP), in collaboration with the UNESCOMahatma Gandhi Institute of Education for Peace and Sustainable Development (UNESCO-MGIEP), ASCENT Africa Sustainability Centre, the Malaysian Industry-Government Group for High Technology (MIGHT), Science to Action (S2A), the Ministry of Environment – Government of Japan, the UN University – Institute for the Advanced Study of Sustainability (UNU-IAS), and endorsed by the Science and Technology Alliance for Global Sustainability) under one umbrella to crack this challenge- how to do national wealth accounting. The team collected extensive data and devised a method to calculate national wealth wherein natural wealth is a non-negotiabel term. The details of this exercise are contained in the Inclusive Wealth Report 2012. The report recognized three components of the National wealth as follows:
Wealth = Human Capital(HC)+ Produced Capital(PC)+ Natural Capital (NC)
While this empirical formula might seem naive it incorporates several layers of complexity behind the facade. HC is computed taking into account education, skill-set, health etc.Computing PC will be the easiest since it has a direct bearing on the GDP and cover all products (industrial + agricultural, roads,buildings etc.) NC, Natural wealth itself is viewed from three different angles: the intrinsic value, use value and optional value and assessed among other things in terms of irreversible uses and substitution possibilities and renewable resources. Inclusive Wealth index (IWI) evaluated based on these premises falls below the GDP and HDI. IWR 2012 was also the first step towards sensitizing governments for the need for a cautious balance between growth rate and ecological integrity.
IWR 2014 report is significant is a jump forward from the 2012 report for several reasons. For example while The 2012 reported covered 20 countries, the present report covers 140 countries. Its focus is the human capital; a great national asset which could very easily turn into a liability. The Human capital computation with educational and health components as key changemakers has received stringent scrutiny. As Anantha Duraiappahin states in the Preface of IWR 2014 -
"We hope that policy-makers at the international, national, and state level will see the IWR 2014 as a useful tool, and as encouragement to take the steps necessary to close gaps in data and to utilize the inclusive wealth accounts presented in the report as guidance "
Here is a snippet from the voluminous data in the report. Since BRICS countries will have a strong influence on the fate of the world in years to come-by, I have just picked the details of the BRICS group and thrown in western Europe and the USA and world data for comparison. This for the 20 year period 1990-2010.
While the results could be viewed through several filters ( single or in combination), what stands out remarkable is way forward to reach a win-win situation.
Reference :
1.UNU-IHDP and UNEP (2014). Inclusive Wealth Report 2014. Measuring progress toward sustainability. Cambridge: Cambridge University Press.
2..UNU-IHDP and UNEP (2012). Inclusive Wealth Report 2014. Measuring progress toward sustainability. Cambridge: Cambridge University Press
