I blogged last year about the inappropriateness of GDP as the sole indicator – and therefore driver – of local, regional and national economic policies. As I pointed out then, “… improvements in our environmental capital do not count as positives in the way we currently measure our success, never mind improvements in social capital or wellbeing”.

I’m pleased to say that greater minds than I have been at work on this issue, and I’ve finally found time to read the recent Stiglitz Commission report, prepared for the French Government to look into how we measure economic performance and social progress. It’s an eye-opener, and a call to arms.

In their recommendations, they seek to balance the social, environmental and economic. For example, on economic wellbeing, the Commission recommends measuring household consumption and income, accounting for current stocks of physical, natural, human and social capital. It will be, of course, very challenging to find internationally recognised measures of all of these aspects; but that doesn’t detract from the power of such a bold attempt to get us to understand ‘wealth’ in a much more rounded way. Measuring our wealth like this, we are assessing the stocks which are fundamental to our quality of life, and to that of future generations.

This proposal responds in part to one of the many killer findings in the report – that ‘monetizing’ human activity – where a market is established for something that happened before but for which no money changed hands – increases GDP without increasing wealth.

If this all seems rather arid and academic, I beg to differ. What we measure influences how we act. The science and language of politics and of economic development is on the turn. New behaviours will follow.

Neil McInroy of CLES also blogs regularly on this site about the need to act very differently from established approaches in developing local economies. Neil and I will be jointly running a seminar next month on how local economic development can be done in a way that anticipates a low carbon future. We have more questions than answers, and the session aims to give participants the space to generate ideas on how economic development policy and practice can develop over the next few years.

In practice, of course, we don’t have time to wait for a global agreement on how to measure wealth and wellbeing, but I hope that knowing that there is so much intellectual weight behind new measurement will give some economic development decision-makers the confidence to move faster towards adapting their strategic approach to take account of the low-carbon future signalled by the UK’s carbon budgets.

GDP is dead, long live its replacement, whatever it turns out to be.