More on the Happy Planet Index

As promised, here's more on the Happy Planet Index. This is from their map of Europe (note that it uses a different scale than the world map for the sake of intra-regional comparison):



Note that the European HPI is calculated differently than the world HPI: the Euro version uses carbon footprint as the denominator in the index, whereas the global HPI uses overal ecological footprint (details here). (And can I make a modest suggestion to the folks at the New Economics Foundation? If you have two indexes - one for Europe and another for the world - that don't use the same variables, perhaps you shouldn't use the same name for those two indexes.) As is just about always the case, the Scandinavians lead the way, followed by Italy, Spain, and a few others. (Presumably they aren't leaders in a global sense, though; Europe, though thriftier than the US, still consumes a lot by global standards.)

Now back to the global HPI. As I mentioned in the previous post, I like the concept behind this index. As with the Human Development Index, it seeks to take a broader measure of well-being than can be obtained by simply looking at cumulative economic activity. In particular, it assigns a value to ecosystems and the life of the planet which, being that which sustains us, is of some importance. Another way to put this is that the HPI is an economic indicator which incorporates certain external costs - the costs of economic activity which are not paid by those directly involved in a given transaction. Economists - especially those legions that have come out of the University of Chicago - for some reason tend to be incredibly myopic about such things. I don't know why; I guess they find mathematical models more elegant than the real world, with all its knotty complications, but those models don't do so well at taking into account the big picture - the social and environmental consequences of economic activity.

So I appreciate the effort here. But at first glance some of the results seemed counter-intuitive, e.g., the "happiest planet" countries being located in Central America. As a commenter said in the previous post, "The real question is Mexico. American companies move to Mexico to avoid our environmental laws, most Mexicans are quite poor, and while the government isn't necessarily mistreating them, drug cartels evidently are, but Mexico is ecologically efficient?" My concerns were along similar lines - it seems that these countries are subject to considerable ecological exploitation. But actually, the HPI accounts for this in their measure of ecological footprint:

The ecological footprint measures how much land area is required to sustain a given population at present levels of consumption, technological development and resource efficiency, and is expressed in global-average hectares (gha). The largest component elements of Footprint are the land used to grow food, trees and biofuels, areas of ocean used for fishing, and ­ most importantly ­ the land required to support the plant life needed to absorb and sequester CO2 emissions from fossil fuels.

Footprint takes account of the fact that in a global economy people consume resources and ecological services from all over the world. Therefore, a Chiquita plantation in Costa Rica will not count towards Costa Rica’s Footprint, but rather towards the Footprint of those countries where the bananas are consumed. For this reason, a country’s Footprint can be significantly larger than its actual biocapacity. The Footprint of a country is thus best understood as a measure of its consumption, and its worldwide environmental impact.

That seems sensible. And it helps to explain the situation for countries like Mexico, where the ecological costs of a lot of industrial and agricultural activity are borne by the US and Canada (as far as the HPI is concerned, at least!), Mexico's NAFTA buddies which are the destination for the lion's share of Mexican goods. But this means that the maps of HPI aren't reflective of the ecological health or sustainability of practices in a country; they're more like a measure of countries' responsibility for ecological costs (which in the real world may often be borne in countries with some of the highest HPI scores).

And for all that, most of the low-consuming countries of Africa still score very low on the HPI:



Not only do they not consume much, their consumption contributes disproportionately little to their life expectancy and well-being.

Wealth II

Here's more on wealth since 1500, from Visualizing Economics:



You can pretty clearly see that the story of the global economy from like 1750 to 1950 was really all about a redistribution of wealth from India and China to Western Europe and the US. Other regions of the world just didn't change that much one way or the other.

But it's also interesting how many trends have reversed themselves since ca. 1950. The dominance of the US and Western Europe has receded somewhat. Japan has about doubled its historical share of global wealth. China and India have halted their long slides (though they still have a long way to go to recoup their historical norms).

We'll check in in another 500 years and see how things are coming along.

UPDATE: I am told that - this being The Map Scroll rather than The Chart Scroll - good form demands that this post include a map. So, here is a moderately relevant map animation showing the changing map of Europe from 1519 CE to the present.