Monday, October 10, 2011

7. New economic indicators

“The economy is hurting!”

“How do you know?”

“Well, the Dow Jones is falling, GDP is below projections, and the number of new jobs didn’t pan out ...”

These are examples of economic indicators. They’re our measuring sticks, the way we determine whether (or how far) we’re moving in the right direction. Our conventional set of economic indicators -- which also includes things like shareholder profits, bottom-line, and sales volume -- measures economic growth and profit. Period.

Measurements of how much that multinational corporation contributed to global warming, or how many children are suffering from asthma in the neighborhood around the Torrance oil refineries, simply don’t figure into Wall Street calculations. In other words, the conventional indicators – the benchmarks, the landmarks of success – are horribly broken. Maximizing the old indicators has lead us very far astray.

As we attempt to assist businesses in setting a new direction into a new, post‑growth paradigm, new indicators will be essential. We will need to help businesses replace old indicators with new ways of measuring. We have to offer new targets to head towards.

Possible new indicators

Some creative people have set out to invent new “alternative” indicators which include such things as environmental impact, social justice, and life satisfaction or happiness. These include the Genuine Progress Indicator and the Happy Planet Index.

In the Transition Handbook (at pages 174-175) there was a sample list of "Resilience Indicators." These measure things like aspects of Relocalization, reduction of energy use, and sharing – the types of things that will help our local communities to survive the triple crisis and evolve into greater well-being.

“A resilience indicator is something that allows us to get a sense of whether or not the community is moving towards or away from resilience, and is something that can be returned to over time and checked to see if we are moving in the right direction” -- Shaun Chamberlin, The Transition Timeline

Here in L.A. in one session we began to adapt those Indicators for more local issues. Your community probably will too.

Your local indicators will be driven by local issues. For instance, here in L.A. water is very important (water didn’t even appear in the Transition Handbook list!). Decreasing L.A.’s dependence on the automobile is critical, thus bicycle- and pedestrian-defined indicators will become important.

David Holmgren offers us the Permaculture Flower diagram [bottom of this post] which lays out in a simple daisy the many spheres of human experience. The economic system of the future will have to develop resilience-building and more-sustainable practices in each of the petals. Thus each of the petals contains ideas for potential new indicators.

All of these indicators mean that you’ll need some ways of Measurement. Look around your local community – it may be that someone else is already measuring some of the right things. Perhaps you can pull water stats from the local water department, bicycle stats from the local advocacy group, and gardening stats from the local University Extension. It’s yet another reason to build strategic partnerships with like-minded organizations.

The long-term importance of Resilience Indicators

By creating, compiling, and publishing new resilience-oriented indicators, Transition initiatives have a lot to offer the wider community. Initially, the new indicators would serve as a guide, perhaps helping to raise awareness and helping to develop a different sense of what is valued within the community (The Great Revaluation).

As the community begins to establish an Energy Descent Action Plan – and perhaps gets local government to endorse it – Resilience Indicators can serve as benchmarks. They help people see that progress is being made toward the community’s long-term goals.

These Resilience Indicators could also begin to serve as informal policy. And as our local communities begin to experience Relocalization-driven decoupling, we can encourage our local scene to embrace the new indicators as the new measure of success.

next section

Sample Resilience Indicators

(compiled from Rob Hopkins, Transition Handbook; Shaun Chamberlin, The Transition Timeline; Transition in Action: Totnes Energy Descent Action Plan; and group work of Transition Los Angeles)

  • Cutting carbon emissions
  • % of local trade carried out in local currency
  • % of food consumed locally that was produced within a given radius
  • The ratio of car parking space to productive land use
  • Degree of engagement in practical Transition work by the local community
  • Decrease in volume of traffic on local roads
  • Number of businesses owned by local people
  • % of the community employed locally
  • % of essential goods manufactured within a given radius
  • % of local building materials used in new housing developments
  • % of energy consumed in the town that has been generated by local energy supply company
  • Amount of sixteen year-olds able to grow 10 different varieties of vegetables to a given degree of basic competency
  • % of medicines prescribed locally that have been produced within a given radius.
  • People’s level of optimism that change is possible
  • Number of people who are active members of car-share clubs
  • % of local society engaged in Transition-type projects and activities
  • % of new buildings which meet passive house standards; % of local homes that have been retrofitted to maximum possible standard
  • % of population who have trained in specific transition skills: academic, practical, personal development
  • Average amount of energy produced by buildings in local community
  • % of water use that was locally-captured rainwater
  • The ratio of non-permeable hardscape to surfaces adapted for rainwater capture and infiltration
  • The ratio of wastewater sent to sewer versus onsite greywater reclamation
  • Degree to which existing buildings are insulated and retrofitted for passive solar attributes
  • Number of local “inner work” professionals (mental health professionals, counselors, spiritual and religious leaders, etc.) who are prepared to work with the issues that arise as people cope with a radically new direction for the future
  • Amount (ideally decreasing) of trash sent to landfills and exported for “recycling” processing
  • % of households and businesses participating in local area composting and soil building
  • Number of members in LETSystems/Time Banks; number of transactions completed through LETSystems/Time Banks

Other Resilience Indicator ideas:

  • Genuine Progress Indicator
  • Happy Planet Index
  • Gross National Happiness