Figure 3 The Index of
Sustainable Economic
Welfare (ISEW), ISEW*
and Gross National
Product (GNP) per capita
in (a) the UK and (b)
Sweden between 1950 and
1990. The shaded area
represents per capita costs
of defensive expenditure.
The higher ISEW* does
not include the costs of
depletion of non-renewable
resources and
environmental damage; (a)
redrawn from ref. 4; (b)
redrawn from ref. 5
represent the costs of positive action taken to protect society from some or all of
the adverse effects of economic development. These may be used to ‘adjust’ Gross
National Product (GNP) as an indicator of development (and welfare) to take
account of elements of environmental degradation, such as pollution. In fact,
GNP includes defensive expenditures (such as the costs of air pollution control)
which thus increase the GNP value. Measures of social and economic welfare
should rather subtract expenditure necessary to defend the population from the
unwanted side-effects of production from GNP.
T. Jackson and N. Marks, Measuring Sustainable Economic Welfare — a Pilot Index 1950—1990,
Stockholm Environment Institute, Stockholm and New Economics Foundation, London, 1994.
T. Jackson and S. Stymne, Sustainable Economic Welfare in Sweden — 1950—1992. Stockholm
Environment Institute, Stockholm, 1996.
H. Daly and J. Cobb, For the Common Good — Redirecting the Economy Towards Community,
Environment and a Sustainable Future, Beacon, Boston, MA, 1989.
A Perspective on Global Air Pollution Problems
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