measuring genuine well-being: the genuine progress indicator system of sustainable well-being...

Measuring Genuine Well-being: The Genuine Progress Indicator

System of Sustainable Well-being Accounts for Alberta

Atkinson Foundation MeetingToronto

October 1, 2001

Mark Anielski, Director, Sustainability Measurement, Pembina Institute

Senior Fellow, Redefining Progress, Oakland CA

“The welfare of a nation can scarcely be inferred

from a measurement of national income as defined by the GDP…goals for ‘more’ growth should specify of what

and for what”

Simon Küznets

Pembina Institute

“The Gross National Product includes air pollution and advertising for cigarettes, and ambulance to clear our highways of carnage. It counts special locks for our doors, and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missiles and nuclear warheads. And if GNP includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials. GNP measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.”

Robert F. KennedyMarch 18, 1968

Redefining Economics

Economics

Oiko nomikus

Household Management

sustainable “living capital” stewardship

Wealth (Capital)

Weal th

Well-Being Condition of

U.S. GPI.. declining economic welfare

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995

US

$ p

er c

apit

a, 1

992

chai

ned

do

llars

Source: Data derived from spreadsheets from the U.S. Genuine Progress Indicator (GPI) for 1999. Redefining Progress, Oakland, CA. www.rprogress.org

U.S. GDP per capita

U.S. GPI per capita

U.S. …making money, growing poor

U.S. Debt, Stock Markets, Economic Growth (GDP) vs. Genuine Progress Indicator (GPI) and Environmental Depreciation

(in current US $)

(4,000)

1,000

6,000

11,000

16,000

21,000

26,000

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

$ b

illio

ns

US

(cu

rren

t d

olla

rs)

U.S. Stock Market Capitalization Value(NYSE/ASE/NASDQ)

Total US Debt

Currency Govenrment Notes

U.S. GDP

U.S. Genuine Progress Indicator (GPI)

Value of Environmental Degradation &Resource Depletion

U.S. vs. Canada GPI per capita

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

U.S

. GP

I pe

r ca

pita

(19

92 U

S d

olla

rs)

5000

6000

7000

8000

9000

10000

11000

Can

ada

GP

I pe

r ca

pita

(19

86 C

dn. d

olla

rs)

US Per Capita GPI US $ 1992 constant Canada Per Capita GPI Cdn. $ 1986 constant

US GPI

Canada's GPI

Canada….better economic well-being?

Societal and Personal

Well-Being

EconomicWell-Being

GenuineProgress IndicatorsAccount

EnvironmentalWell-Being

Genuine Progress Indicators (GPI) Sustainable Well-being Accounting System

Spiritual Well-Being

Quality of LifeValues

Key determinants of well-being

Quality of life needs and prioritiesbased on citizen input and dialogue

CPRN’s Quality of LifeDialogue with Canadians

51 Indicators of Well-being

Social Accounts

-Human Capital-Social Capital

EconomicAccounts

- Economic Output - Produced Capital- Financial Capital

GenuineProgress Indicator Account

EnvironmentalAccounts

-Natural Capital- Ecosystem Services

Full Cost & Benefit Accounts ($$)

Condition of Well-Being Accounts

(qualitative/quantitative)

GPI Sustainable IncomeStatement

GPI Balance Sheet

(GPI) Sustainable Well-being Accounting System:GPI Accounts

Elements of Well-being

SocietalSocietalWell-BeingWell-Being

AccountAccount

EconomicEconomicWell-BeingWell-Being

AccountAccount

EnvironmentalEnvironmentalWell-BeingWell-Being

AccountAccount•Economic Growth•Economic Diversity•Trade•Disposable Income•Personal Expenditures•Taxes•Debt•Savings Rate•Household Infrastructure•Public Infrastructure•Income Inequality

•Poverty•Paid Work Time•Unemployment•Underemployment•Parenting and Eldercare•Leisure Time•Volunteerism•Commuting Time•Family Breakdown•Crime•Democracy•Intellectual Capital•Life Expectancy•Infant Mortality•Premature Mortality•Disease•Obesity•Suicide•Substance Abuse•Auto Crashes•Gambling

•Ecological Footprint•Ecosystem Health•Carbon Budget•Energy Efficiency•Oil and Gas Reserve Life•Agriculture Sustainability• Timber Sustainability•Wetlands-Peatlands•Fish & Wildlife•Air Quality•Water Quality•Toxic Waste•Landfill Waste

Regrettable Societal Costs and Benefits **• Value of housework• Value of parenting and eldercare• Value of volunteer work• Value of free time• Cost of unemployment and

underemployment• Cost of auto crashes• Cost of commuting• Cost of crime• Cost of family breakdown• Cost of suicide• Cost of gambling• Cost of obesity and unhealthy lifestyles• Cost of gambling• “Cost” of income inequality (GDP

adjusted by the Gini coefficient for income inequality)

Societal Well-being Indicators Account

Societal and Personal

Well-Being Account

EconomicWell-being

Account

GenuineProgress

Indicators

EnvironmentalWell-being

Account

Societal and Personal Well-being Indicators

• Poverty (% living below LICO and a Living Wage);

• Income distribution (Gini coefficient)

• Unemployment rate• Underemployment rate• Paid work (time use)• Household work (time use)• Parenting and eldercare (time use)• Free (leisure) time• Volunteer time• Commuting time• Life expectancy• Premature mortality• Infant mortality• Obesity• Suicide• Youth drug use• Auto crashes• Divorce and family breakdown• Crime• Problem gambling• Voter participation• Educational attainment

* Indicators are expressed in non-monetary units or normalized qualitative indices.

** All values are expressed in monetary units which can be used to generate the GPI Net Sustainable Income statement adjusting GDP for unaccounted benefits and costs.

Regrettable Environmental and Natural Capital Depreciation Costs**

• Cost of public and private environmental clean-up

• Cost of toxic waste management• Cost of household/business waste

management and pollution control costs

• Deprecation cost of nonrenewable resource use

• Cost of long-term environmental damage from fossil fuel use

• Cost of unsustainable forest resource use

• Cost of loss of farmland• Cost of loss of wetlands and

peatlands• Cost of loss of wildlife and

fisheries• Cost of loss of ecosystem services• Cost of air pollution• Cost of water pollution

Environmental Well-being Accounts

SocietalSocietalWell-beingWell-being

AccountAccount

EnvironmentalWell-being

Account

Environmental Well-being Indicators*

• Conventional crude oil and natural gas reserve life

• Oilsands reserve life• Energy use• Agriculture sustainability

(composite index)• Timber sustainability index• Forest fragmentation• Parks and wilderness• Fish and wildlife population

health• Wetlands• Peatland• Water quality• Air quality• Greenhouse gas emissions• Carbon budget deficit• Hazardous waste• Landfill waste• Ecological footprint


* Indicators are expressed in non-monetary Units or normalized qualitative indices.

EconomicEconomicWell-beingWell-being

AccountAccount

Genuine Progress Indicators

Full costs and benefits of economic output, produced, and financial capital

• Gross Domestic Product (GDP)

• Personal Consumption Expenditures (PCE)

• PCE adjusted for income inequality/distribution (“cost” of inequality)

• Non-defensive government expenditures

• Value of services of consumer durables

• Cost of consumer durables (regrettable depreciation)

• Value of public infrastructure services

• Net capital investment• Cost of household and

personal debt servicing• (see also, Societal costs)

Economic Well-being Accounts

SocietalSocietalWell-beingWell-being

AccountAccount

Economic-Well-being

Account

Economic Well-being Indicators

• Economic growth (real GDP per capita)

• Economic diversity (distribution of GDP by sector)

• Trade balance (exports less imports)

• Real disposable income• Real weekly wages• Personal consumption

expenditures• Transportation expenditures• Taxes (real $ per capita)• Household and personal debt

per capita• Savings rate• Public infrastructure (value

of services)• Household infrastructure

(value of services)

EnvironmentalEnvironmentalWell-beingWell-being

AccountAccount

GenuineProgress Indicators

* Indicators are expressed in non-monetary units or normalized qualitative indices.


-

10

20

30

40

50

60

70

80

90

100Economic growth

Economic diversityTradeDisposable income

Weekly wage rate

Personal expenditures

Transportation expenditures

Taxes

Savings rate

Household debt

Public infrastructure

Household infrastructure

Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work

Parenting and eldercare

Free time

Volunteerism

Commuting time

Life expectancyPremature mortality

Infant mortalityObesitySuicideDrug use (youth)Auto crashes

Family breakdown

Crime

Problem gambling

Voter participation

Educational attainment

Oil and gas reserve life

Oilsands reserve life

Energy use

Agricultural sustainability

Timber sustainability

Forest fragmentation

Parks and wilderness

Fish and wildlife

Wetlands

Peatlands

Water quality

Air quality

GHG emissions

Carbon budget deficitHazardous waste

Landfill wasteEcological footprint

A Portrait of Alberta’s Condition of Well-being (GPI Balance Sheet) Diagnosis 1999

-

10

20

30

40

50

60

70

80

90

100Economic growth

Economic diversity

Trade

Disposable income

Weekly wage rate



Taxes

Savings rate

Household debt



-

10

20

30

40

50

60

70

80

90

100Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

Volunteerism

Commuting time

Life expectancy

Premature mortality

Infant mortality

Obesity

Suicide

Drug use (youth)

Auto crashes

Family breakdown

Crime

Problem gambling

Voter participation


-

10

20

30

40

50

60

70

80

90

100Oil and gas reserve life


Energy use





Fish and wildlife

Wetlands Peatlands

Water quality

Air quality

GHG emissions

Carbon budget deficit

Hazardous waste

Landfill waste

Ecological footprint

EnvironmentalWell-being Conditions

Societal and Personal Health

Conditions

EconomicWell-being Conditions

Alberta’s Condition of Well-being Diagnosis for 1999:The GPI Sustainability Circle Index

-

10

20

30

40

50

60

70

80

90

100Economic growth


Weekly wage rate



Taxes

Savings rate

Household debt



Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

Volunteerism

Commuting time



Family breakdown

Crime

Problem gambling

Voter participation




Energy use





Fish and wildlife

Wetlands

Peatlands

Water quality

Air quality

GHG emissions



Historical Portraits of Well-being

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Economic growthEconomic diversityTrade

Disposable incomeWeekly wage rate



Taxes

Savings rate

Household debt



Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

Volunteerism

Commuting time



Family breakdown

Crime

Problem gambling

Voter participation




Energy use





Fish and wildlife

Wetlands

Peatlands

Water quality

Air quality

GHG emissions



Note: 51 of 51 indicators

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00Economic growth

Disposable incomeWeekly wage rate



Taxes

Savings rate

Household debt



Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

VolunteerismCommuting time


SuicideAuto crashes

Family breakdown

Crime

Problem gambling

Voter participation




Energy use




Fish and wildlife

Wetlands

Peatlands

Air quality

GHG emissionsCarbon budget deficit


Note: 42 of 51 indicators

-

10

20

30

40

50

60

70

80

90

100Economic growth


Weekly wage rate



Taxes

Savings rate

Household debt



Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

Volunteerism

Commuting time



Family breakdown

Crime

Problem gambling

Voter participation




Energy use





Fish and wildlife

Wetlands

Peatlands

Water quality

Air quality

GHG emissions



1999

1961

1998

The best

The worst

Alberta Economic Growth vs. Genuine Progress Index

-

10

20

30

40

50

60

70

80

90

100Economic growth


Weekly wage rate



Taxes

Savings rate

Household debt



Poverty

Income distribution

Unemployment

Underemployment

Paid work time

Household work


Free time

Volunteerism

Commuting time



Family breakdown

Crime

Problem gambling

Voter participation




Energy use





Fish and wildlife

Wetlands

Peatlands

Water quality

Air quality

GHG emissions



40.0

50.0

60.0

70.0

80.0

90.0

100.0

1961 1966 1971 1976 1981 1986 1991 1996

Ind

ex

(wh

ere

10

0=

be

st)

GDP Growth IndexBest year: 1999

Worst year: 1961

GPI Well-Being IndexBest year: 1961

Worst year: 1998

Source: Alberta GPI Accounts 1961-1999

1999

The GPI Sustainable Income statementGDP – personal consumption expenditures

• adjust for income inequality+ value of unpaid work (housework, parenting, volunteerism)+ value of the household and public infrastructure- cost of household debt servicing - value of the loss of human and social capital:

- loss of leisure time- cost of underemployment and unemployment- cost of divorce, suicide, auto crashes, divorce, gambling

-value of natural capital depreciation: - nonrenewable natural capital (minerals, oil, gas, coal)- unsustainable renewable natural capital (forests, agriculture)

-cost of loss of ecosystem services:- (carbon sequestration, air pollution,water pollution, forests, wetlands, and peatlands)

= Net Sustainable Income (output)

Alberta GDP versus Sustainable Economic Welfare

-1,500

3,500

8,500

13,500

18,500

23,500

28,500

33,500

38,500

1961 1966 1971 1976 1981 1986 1991 1996

1998

dol

lars

per

cap

ita

Alberta GDP

Alberta GPI(net sustainable income)

Source: Alberta GPI Accounts, GPI income statements, 1961-1999

1999

Pembina Institute

Total environmental costs and natural capital depreciation is

estimated at $26.4 billion (1998$) or 24.0% of Alberta’s

GDP.

The value of unpaid work is estimated at $38.8 billion

(1998$) or 35.4% of Alberta’s GDP in 1999.

The social and human capital costs are estimated at $23.4 billion (1998$) or 21.3% of

Alberta’s GDP.

Pictures at the Exhibition:The Story of Alberta’s Well-

being and Sustainability

The Cost of House-hold Debt in Alberta: What is included? The cost of household debt servic-

ing is based on an estimate of the interest payments on chartered bank consumer loans.

We estimate the cost of household debt servicing in 1999 at $6.6 billion on roughly $64 billion (1998$) in total outstanding household debt. This expenditure is roughly 6% of Alberta’s 1999 GDP.

Financial debt burdens individuals, households, students, businesses, farmers, and government. Debt financing fuels economic growth, investment and consumption by households, business and even governments. Genuine progress is made if the levels of debt do not become excessive in relation to disposable income and spending power. At the household and personal level, debt is soaring even as the

Alberta Government eliminates its debt. For our analysis, we used Statistics Canada data for personal and household debt at the national level and estimated Albertans’ share of this debt. Our analysis shows that household debt rose from $5,204 per Albertan (1998$) in 1961 to $21,172 (1998$) in 1999—a 307% increase. Real disposable income increased only 113% over the same period. The average

household debt per Albertan has increased from 57% to 109% of real disposable income from 1961 to 1999. When we add Albertans’ share of outstanding federal government debt, Alberta Government Debt, municipal government debt, and business debt, the average total debt per Albertan in 1999 was $60,441 (1998$), or 322% of average real disposable income.

$-

$5,000

$10,000

$15,000

$20,000

$25,000

1961 1966 1971 1976 1981 1986 1991 1996

1998

$ pe

r ca

pita

Source: Debt figures estimated for Alberta from Statistics Canada, Table 378-0003 , National balance sheet, credit market summary; Expenditures and Disposable Income figures from Alberta Economic Accounts 1999

Household Debt

Disposable Income

Personal ConsumptionExpenditures

Debt in Alberta: How Much? Noteworthy: Real household debt per cap-

ita grew by 3.8% per annum from 1961 to 1999, surpassing the 2.1% per annum growth in real disposable income and the 2.2% per annum growth in real GDP per capita.

Albertans are financially stressed with 23% reporting in a 1999 national survey that they would not have enough savings to last one month.

We estimate the total of all debt (household, business, farm, and all government) per Albertan in 1999 at $60,441 (1998$); it has increased 355% since 1961, which represents 163% of GDP .

While real per capita house-hold debt grew at a rate of 11.3% per annum, real dispos-able income only grew at 2.1% per annum.

Alberta Household Debt vs. Disposable Income and Consumption Spending

Household Debt

-

20

40

60

80

100Economic growth

Economic diversity

Trade

Disposable income

Weekly wage rate



Taxes

Savings rate

Household debt



Indicator # 10, HOUSEHOLD DEBT

-

10

20

30

40

50

60

70

80

90

100

1961 1966 1971 1976 1981 1986 1991 1996

GD

P In

de

x, b

en

chm

ark

ye

ar

=1

00

-

10

20

30

40

50

60

70

80

90

100

De

bt I

nd

ex,

be

nch

ma

rk y

ea

r =

10

0

Economic Growth

Debt

Less Debt

More Debt

Pembina Institute for Appropriate Development, January 2001

So What? The GDP counts expenditures on debt servicing as additions to economic growth. In most cases, debt is a regrettable financial burden that diminishes the economic well-being of households, businesses and governments. The figure at the upper right shows that while GDP (as an index) continues to rise, the amount of household indebtedness (as an index) is also increasing. Do increasing levels of financial debt feed economic growth? Economists such as Herman Daly have identified that a basic growth bias is built into the economy by the nature of our debt-based money creation system, with total debt growing forever and being fundamentally unrepayable from current earnings. Since money creation (through debt) is a synthetic process that encourages making money from money, there is a fundamental need to address the long-term costs of this system to genuine well-being and sustained stewardship of “living” capital. The GPI accounts identify debt as detracting from genuine well-being. The figure at the lower right shows the real costs per capita of household debt servicing compared to real disposable income. Average real costs of household debt servicing in 1999 are estimated at $6.5 billion or $2,145 per Albertan (1998$). Total real debt servicing increased 330% from 1961 to 1999 while real disposable income per capita only rose 113% over the same period. Government debt servicing detracts from economic well-being by diverting monies that could have been spent on public programs and services to enhance well-being. For example, roughly 29 cents on every tax dollar paid to the federal government in 1999 went to service the federal debt. Genuine progress will be made when a) we begin to explore alternative money systems to replace fractional reserve banking and a debt-based money system, and b) we perhaps adopt a total capital and GPI system of well-being accounts that informs and guides national monetary policy and money creation.

Costs of Household Debt Servicing vs. Disposable Income, Alberta 1961-1999

$179.2Billion

Including household, farm, Alberta Government, and municipal government debt, as well as business debt in Alberta, and Alberta’s share of federal government debt, the total debt bill for 1999 was $179.2 billion (1998$). As an index, household (personal debt) per capita in Alberta in 1999 scored 24.6 on a scale of 0 to 100, where 100 is the lowest level of real household debt per capita that occurred between 1961 and 1999.

Alberta Debt Index: Where are we today?

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1961 1966 1971 1976 1981 1986 1991 1996

Hou

seho

ld d

eb s

ervi

cing

cos

ts, 1

998

$ pe

r ca

pita

$-

$5,000

$10,000

$15,000

$20,000

$25,000

Rea

l dis

posa

ble

inco

me

per

capi

ta, 1

998

$

Source: Debt servicing costs were estimated by the authors using the average consumer loan rate of Chartered Banks applied to total personal and household debt estimates for Alberta (based on Statistics Canada national data; Table 378-0003: National balance sheet, credit market summary.

Household debt servicing costs per capita, 1998 dollars

Per capita real disposable income

ENVIRONMENTAL WELL-BEING Genuine Progress Indicators (GPI)

GPI Condition

Index in 1999 (100 = best) (0 = worst)

Best Year Worst Year

*

Trend 1961-1999

Description of Trend

Conventional crude oil and natural gas reserve life

20 1966 1999*

Natural gas and conventional crude oil reserves continue to decline with replacements not keeping pace with extraction.

Oilsands reserve life 79 1979 1998*

Oilsands reserves are relatively constant given that there an estimated 300 billion barrels of economic reserves of oil that could last hundreds of years.

Energy use 44 1962 1999*

Total energy demand (intensity of use) continues to rise at a rate of 2.2% per annum, per capita, similar to the GDP per capita.

Agriculture sustainability

62 1999 1961*

The agriculture sustainability index (a composite index of yields, soil organic carbon, summer fallow, pesticide use and salinity) has increased somewhat in the 1980s and 90s. However, increasing farm debt, and fertilizer and pesticide use may become problematic.


79 1994 1998*

The Timber Sustainability Index (ratio of timber growth to all timber capital depletions) continues to decline falling below sustainable thresholds in 1998 and 1999.

Forest fragmentation 11 1961 1999*

The fragmentation of Alberta’s forests (due to industrial development) has risen so dramatically since the 60s that an estimated 90% of Alberta’s vast productive forest land base is now fragmented.

Parks and wilderness 33 1999 1995*

While the area of parks and wilderness under protection has increased slightly, not all landscape types are adequately represented.

Fish and wildlife 45 1980 1999*

Caribou populations are falling; grizzly bear populations are uncertain, and sport and commercial fishing are declining.

Wetlands 40 1961 1999*

Area of wetlands has declined at an estimated 0.6% per year since 1961.

Peatland 99 1961 1999*

The area and volume of peatland is largely unchanged.

Water quality

73 1999 1986*

Overall water quality (a composite index of pulp effluent, sewage treatment, water-related illness and river water quality) has improved. However, river water quality shows a slight decline and groundwater conditions are uncertain.

Condition of Well-being Report

GDP grows but to whose benefit?

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Pe

rso

na

l Dis

po

sab

le I

nco

me

Pe

r C

ap

ita (

19

98

$)

Economic growth

Disposable income

Despite increasing economic growth since

1981, average real disposable incomes have stagnated since

peaking in 1981.

In a 1999 national survey, 23% of Albertans (highest in Canada)

said they would not have enough savings to sustain themselves beyond one month’s salary.

(Source: Canadian Council on Social Development)

Economic well-being at risk?

Pembina Institute

(200)

4,800

9,800

14,800

19,800

24,800

1960 1965 1970 1975 1980 1985 1990 1995

1998

dol

lars

per

Alb

erta

n

Taxes on persons

Sources: Alberta Treasury, Alberta Economic Accounts 1999; Statistics Canada, CANSIM Table 384-0035 and Table 384-0012 (92-99)

Savings

Personal and household debt

Disposable income

Personal consumptionexpenditures

1999

Another day older….

Pembina Institute

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

Pre

ma

ture

Mo

rta

lity

Economic growth

Premature mortality

Premature mortality from all causes has been declining steadily since 1980; the average life expectancy of Albertans (men and women) has

increased more than 7 years from 72.0 years in 1961 to 79.3 years in 1999.

…. and deeper in debt

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

(5,000)

5,000

15,000

25,000

35,000

45,000

55,000

De

bt

pe

r C

ap

ita (

19

98

$)

Economic growth

Household debt

Household debt servicing costs now exceed real disposable income for the first time in history. The average household debt per Albertan has almost doubled in 40 years from 57% of real disposable

income in 1961 to 109% in 1999

Pembina Institute

While real per capita household debt grew at a rate of 11.3% per annum, real disposable income grew by only 2.1%

per annum (1961-1999).

More GDP…more poverty?

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er C

apita

(19

98$)

-

5

10

15

20

25

30

Pov

erty

(%

of

all p

erso

ns li

ving

bel

ow t

he lo

w in

com

e cu

t-of

f)

Economic Growth

Poverty

Pembina Institute

Between 1961 and 1999, the level of poverty (LICO)

increased 37.1%; Alberta had Canada’s

third lowest poverty rate

We estimated roughly 20% of Albertans used the provinces 74 food

banks; 17.2% of households are estimated to live below a living wage

($24,332 per annum for family of four).

3.00

5.00

7.00

9.00

11.00

13.00

15.00

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

Rat

io o

f to

p 20

% o

f in

com

e gr

oup

to lo

wes

t 20

%

Source: Statistics Canada, "Income Inequality within provinces", Dimitri Sanga, Perspectives, Winter 2000, Catalogue No. 75-001-XPE, Table, p. 35

Market income inequality

Total income inequality(after Government transfers)

After-tax incomeinequality

GROWING GAP: Gap Between Alberta’s Rich (Top Income Quintile) and the Poor (Lowest Income Quintile) Comparing Incomes on a Before Government Transfers,

After Taxes, and Total Income Basis, 1981 to 1998

Hourly Income Comparisons, Alberta, 1998

$125.00

$70.42

$5.90

$6.16

$1,822.92

$7.75

$16.15

$23.48

$63.33

$7.60

$14.20

$17.19

$58.33

$52.34

$25.86

$448.96

$185.26

$123.96

$33,307.29

$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00 $35,000.00

Richest 8 Albertans (Average)

Average Salary of Top 100 Canadian CEOs

Average CEO Salary

Mary Cameron, President, Alberta WCB

Top Federal Government Bureaucrat

Sheila Weatherill, President, Capital Health Authority

Top Provincial Deputy Ministers

Premier Ralph Klein

Calgary Mayor Al Duerr

Edmonton Mayor Bill Smith

Teachers (Edmonton Public Schools)

Registered Nurses

Federal Public Servant

Average Canadian Worker

Average Personal Income of Albertans

Youth (15-24) Median Wage Earner

Poverty/Living Wage

Welfare Single Mom with two children

Minimum wage earner

Source: 2. "Who's worth what, Who's Paid What, Where the Money Goes", Special Report, National Post, April 22, 2000; Alberta Public Accounts 1999-2000

The top 20% income group of Albertans earned 14.5 times more than the lowest 20% almost double the ratio of 8.2 in

1980.

The eight wealthiest Albertans earned an estimated 5,645 times more per hour than an Albertan working full-time at

the minimum wage.

Jubilee?

Less time with the kids but more GDP

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

20

40

60

80

100

120

140

160

180

200

Pa

ren

ting

an

d E

lde

rca

re (

ho

urs

pe

r p

ers

on

15

ye

ars

an

d o

ver

pe

r ye

ar)

Economic growth


The value of unpaid work in Alberta in 1999is estimated at $38.8 billion (1998$) or 35.4%of Alberta’s GDP.

Nearly 70% of full-time employed, married mothers feel rushed and stressed on a daily

basis

More divorces add to GDP growth

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-5%

5%

15%

25%

35%

45%

55%

Fa

mily

Bre

akd

ow

n (

% o

f m

arr

iag

es

tha

t e

nd

in d

ivo

rce

)

Economic growth

Family breakdown

Source: Statistics Canada, CANSIM special retrieval and Alberta Economic Accounts 1999

The estimated cost of divorce and familybreakdown in Alberta in 1999is estimated to contribute $148 million(1998$)to Alberta’s economic growth.

The rate of divorce rose 4.6% per annum

compared to real GDP growth of 4.4% per year, 1961 to 1999

Rising suicide adds to the GDP

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P p

er

cap

ita

(19

98

$)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Su

icid

e r

ate

pe

r 1

00

,00

0

GDP at market prices, expenditurebased (1998$ per capita)

Suicide rate for both sexes per100,000 population

Pembina Institute

Suicide is the leading cause of death amongst Calgary males aged 10-

49 years.

Health of democracy?

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

10

20

30

40

50

60

70

80

90

100

De

mo

cra

cy

(vo

ter

pa

rtic

ipa

tion

%)

Economic growth

Voter participation

Pembina Institute

Growing Ecological Deficits…

Pembina Institute

Alberta has the fourth largest ecological footprint in the world after the United Arab Emirates, Singapore and the United States of America.

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Eco

log

ica

l Fo

otp

rint

(he

cta

res

pe

r ca

pita

)

Economic growth


Alberta’s Footprint, fourth largest in the world….5 times the global ecological carrying capacity

Pembina Institute

0

1

2

3

4

5

6

7

8

9

10

11

12

13

% of global population

[ha/

cap

ita]

1.8 (per capita global biocapacity)

2.8 (per capita ecological footprint)

10% 54% 10% 3% 11% 3% 2% 5%0.8 ha

1.4 ha

2.5 ha

3.6 ha

5.2 ha

6.3 ha

7.4 ha

11.9 ha

Alberta10.7 ha

Global Biological Capacity

Depleting oil and gas capital…more GDP

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P p

er

cap

ita(

19

98

$)

0

5

10

15

20

25

30

35

40

45

Cru

de

Oil

an

d N

atu

ral G

as

Re

serv

e L

ife (

yea

rs r

em

ain

ing

)


Crude Oil and Natural Gas ReserveLife Average

There are less than 10 years of natural gasreserves remaining, based on current production and stocks. However, Alberta has more oil in the oil sands than Saudi Arabia’s official reserves, more than 300 years of production.

The estimated cost of depreciation of nonrenewable resources is estimated at $10.6 billion in 1999 or 9.7% of GDP.

Depleting timber capital…more GDP

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P p

er

cap

ita (

19

98

$)

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Tim

be

r S

ust

ain

ab

ility

In

de

x (r

atio

of

gro

wth

to

de

ple

tion

s)


Timber Sustainability Index, the ratioof annual increment (growth) dividedby total harvest, energy andagriculture depletions

More than 90% of Alberta’s forests are fragmented

Growing Carbon budget deficit…more GDP

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

1

2

3

4

5

Ca

rbo

n B

ud

ge

t

Economic growth


Pembina Institute

The estimated cost of Alberta’s carbon emissions to global warming in 1999 are estimated at $4.1 billion (1998$) or 3.7% of Alberta’s GDP.


Carbon budget surplus

Water quality improving but is it sustainable?

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1961 1966 1971 1976 1981 1986 1991 1996

GD

P P

er

Ca

pita

(1

99

8$

)

-

10

20

30

40

50

60

70

80

90

100

Wa

ter

Qu

alit

y In

de

x

Economic growth

Water quality

While surface (river) water quality has improved very little is known about the long-term sustainability of Alberta’s groundwater aquifers.

Next Steps….GPI Sustainability Accounting and Reporting

National GPI

Provincial/State GPI

Local GPI

Corporate GPIGlobal Reporting Initiative (GRI)

Quality of Life Indicators

GPI Accounts forOntario, Quebec, B.C., AlbertaMaritimes

National GPI Accounts:Canada, U.S.

Alberta GPI Balance Sheet (1960-2000)(physical and monetary stock accounts)

Pembina Institute

For additional information:

www.pembina.org

[email protected]

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