ripple effect
ripple effect
so many perverse incentives ...
Friday, 21 November 2008
People and organisations with a little bit of creativity have ways of solving problems when standard practice just won’t do justice to what you’re trying to achieve. Finding what techie folk call a ‘workaround’ can be vital.
You will have your own examples, whether it’s bypassing standard procurement procedures because these are so costly in terms of your time and you simply have to crack on with commissioning that project or advice, or getting on with a pilot project by not treating it as a ‘project’ and thereby bypassing some of the process that stops you testing new ideas.
For some things, however, there is no workaround, because it governs how we think. And I’ve been worrying about one such example recently.
What’s bothering me is GDP and the measure that’s used on a regional basis, GVA. In the Government’s own words, this “measures the contribution to the economy of each individual producer, industry or sector in the United Kingdom”. A perfectly good measure of economic activity and, therefore, indicator of growth.
Where it is a problem is that regional strategies are being written under the auspices of a Review of Sub-National Economic Development and Regeneration (SNR) that majors on economic growth as measured by GVA as a sign of success.
Low carbon - or ‘sustainable’ - regional strategies are, rightly, all the rage. But, if we are even halfway serious about the emissions reduction in the Climate Change Bill, we have to recognise that chasing growth is a thing of the past. And that surely can’t be done if strategy is driven by current metrics.
Why? Because a RTA (road traffic accident) looks like it is good for the economy - all that power consumed, all those jobs maintained. Because not adapting to the impacts of climate change is good for growth in GVA terms - the buildings are too hot, so the aircon is whacked up and the cost of the energy consumed contributes to growth. Because improvements in our environmental capital (the planet’s ability to sustain us by, for example, resisting soil erosion) do not count as positives, never mind improvements in social capital or wellbeing.
So many perverse incentives, so little time. And you don’t have to be an economist or climate scientist to realise that we need new metrics to reflect a new understanding of prosperity, no longer measured by growth in the classic sense.
Can RDAs and others work around the use of GVA? I hope so.