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A Scientific Assessment
By Tomá? Hák, Bedrich Moldan, Arthur Lyon Dahl
ISLAND PRESSCopyright © 2007 Scientific Committee on Problems of the Environment (SCOPE)
All rights reserved.
Challenges to Sustainability Indicators
Bedrich Moldan and Arthur Lyon Dahl
The most difficult challenge facing policymakers is deciding the future directions of society and the economy in the face of often conflicting requirements for short-term political success, economic growth, social progress, and environmental sustainability. The wrong decisions can carry heavy consequences, increase human suffering, and even precipitate crises. Improving the basis for sound decision making, integrating many complex issues while providing simple signals that a busy decision maker can understand, is a high priority. At a time when modern information technologies increase the flow of information but not our ability to absorb it, we need information tools that condense and digest information for rapid assimilation while making it possible to explore issues further as needed. This is the goal of indicators.
Indicators are symbolic representations (e.g., numbers, symbols, graphics, colors) designed to communicate a property or trend in a complex system or entity. Traditionally, most indicators for decision makers have been numbers calculated by statistical services, including complex indices such as the gross national product (GNP) or percentages such as the unemployment rate.
Chapter 40 of Agenda 21 acknowledges that "commonly used indicators such as GNP and measurement of individual source or pollution flows do not provide adequate indications of sustainability" and states that "indicators of sustainable development need to be developed to provide solid bases for decision-making at all levels and to contribute to a self-regulating sustainability of integrated environment and development systems" (UNCED 1992: paragraph 40.4). Although 12 years later much progress has been made in refining the concept of sustainable development, the challenge of Agenda 21 has not been met in a satisfactory way. Many indicator sets have been assembled, but none has been widely implemented, and their integration to support self-regulating sustainability is still a major challenge. The development of indicators is still seen as one of the major topics within sustainable development projects and programs (OECD 2004).
This book focuses primarily on the assessment of existing indicators in order to assist those who need to apply indicators now and to shed some light on the way ahead. The successes and failures are analyzed, gaps in knowledge exposed, and research needs identified. In addition, some new approaches are proposed. Progress in sustainability indicator development is reviewed in this book in the following three domains: conceptual challenges, methodological frontiers, and policy relevance. The review focuses on indicators broadly concerned with sustainable development, including its economic, social, and environmental dimensions and other relevant perspectives, largely as used at the national and international levels. Although many of the issues raised apply equally to indicators used at the local level, there are too many interesting initiatives at that level to include them in this review.
Probably the only generalization one can make about indicators or indices used or proposed is that there is no ideal indicator that fully encompasses all the desired qualities. There are always trade-offs, and the goal is not to eliminate the trade-offs completely but to make them transparent and to identify and avoid major constraints. Thus there is no one recommended indicator set but different approaches that may be appropriate for particular uses.
Conceptual Challenges of Sustainability
Assuming that indicators are intended to report on sustainability, the most important and difficult definition is that of sustainability itself. Sustainability is the capacity of any system or process to maintain itself indefinitely. Sustainable development thus is the development of a human, social, and economic system able to maintain itself indefinitely in harmony with the biophysical systems of the planet. Sustainable development is perhaps the most challenging policy concept ever developed. Its core objective—a kind of ethical imperative—is to provide to everybody everywhere and at any time the opportunity to lead a dignified life in his or her respective society. It is essentially an anthropocentric concept of sustained intergenerational and intragenerational justice (Grunwald et al. 2001), claiming for humans the right to a dignified life (Littig 2001). This demand for a high quality of life is assumed to include a decent standard of living, social cohesion, full participation, and a healthy environment (WCED 1987).
Sustainable development, as elaborated in Agenda 21 and confirmed at the World Summit on Sustainable Development, has three explicit dimensions, domains, or pillars: social, economic, and environmental. A fourth pillar, institutional, was included in the system of sustainability indicators adopted by the UN Commission on Sustainable Development (CSD), although very few institutional indicators were identified. More often, institutions are seen as providing the underlying enabling framework for action and change. Other approaches may recognize only human or social and natural or environmental dimensions or may subsume all compartmentalization into a more integrated and dynamic framework. Wherever such subdivisions are used for conceptual convenience or to make the concept more accessible and policy relevant, they immediately raise the challenge of integration across the subdivisions.
Most indicator sets for sustainable development have assembled indicators for each of the pillars while neglecting the links between them despite their key relevance for policy and planning. Development of interlinkage indicators is thus a particular challenge. The so-called decoupling indicators are highly relevant in this respect (OECD 2002), and other cross-cutting indices have been proposed.
Indicators of sustainability should measure characteristics or processes of the human–environmental system that ensure its continuity and functionality far into the future. Specifying the characteristics of the system or entity to be maintained can be very subjective and specific, and political, philosophical, and cultural differences may prevent any wide consensus. More effort is needed to apply the techniques of system science to this issue, developing more alternative models that reflect the diversity and complexity of human systems and cultures. These will help to explain the behavior of such complex nonlinear systems and their sensitivity, resilience, and capacity to switch between alternative steady states. The resulting understanding can contribute to more adaptive management, with indicators serving as monitoring and signaling mechanisms. The optimal sustainability indicators are those that capture the essential characteristics of the system and show a scientifically verifiable trajectory of maintenance or improvement in system functions. Science cannot always validate the goals set for the system, but it can validate the ability of the indicators chosen to measure the trajectory toward those goals or the reduction in damaging factors threatening the system's sustainability.
It is probably not possible or even desirable to arrive at one standard definition of sustainability. Such a dynamic concept must evolve and be refined as our experience and understanding develop. Rather than trying to resolve this issue, this review examines some of the basic underlying concepts and their relationship to indicators. The idea of carrying capacity, for instance, with the exception of the ultimate limits of life conditions on the planet, depends on political choices about an acceptable standard of living and thus is a very subjective and normative concept that cannot easily be captured in indicators. Resilience is a more useful aspect of sustainability that can be defined in terms of vulnerability, adaptability, and responsiveness or sensitivity. This allows a better understanding of the behavior of this system property integrating and clarifying synergies between various human economic, social, and cultural characteristics. The goal is to identify irreversible changes beyond which recovery is not possible. However, this entails defining how critical the loss is to overall system functions, whether substitutions are possible, what compensation may be needed, and the level of uncertainty that may necessitate the application of the precautionary approach.
The notions of weak and strong sustainable development have been debated in the recent literature, and a number of indicators or frameworks have been proposed to capture them. For weak sustainability, efforts have focused on whether the well-known macroeconomic indicators gross national product (GNP) and gross domestic product (GDP) can be transformed to produce an indicator of sustainable development. For strong sustainability, the concept of critical natural capital (CNC) was introduced for the stocks of capital that cannot be substituted by other stocks of environmental or other capital to perform the same functions (Ekins et al. 2003).
The packaging of data into indicators is a way of simplifying complex and detailed information. Decision makers and the public lose interest rapidly if presented with more than a few indicators. It is therefore highly desirable to keep the number of indicators to a minimum while still representing the issues of sustainable development. The ultimate test of any indicator effort is its suitability for a specific use and the impact the indicators have on policies and public awareness. The issue of aggregation is very important in this respect because it can both generate useful information and facilitate its communication. Assessments that do not combine their indicators into a small set of indices are extremely hard to interpret, whereas those that do communicate their main findings instantly. When indicators are combined into indices, they provide a clear picture of the entire system, reveal key relationships between subsystems and between major components, and facilitate analysis of critical strengths and weaknesses. No information is lost if the constituent indicators and underlying data are available to be queried. However, there is a problem with the selection of indicators to be aggregated, which can intentionally or unintentionally introduce arbitrary weightings or other distortions.
Sustainability indicators generally are intended to target ongoing political processes, yet they often are developed with surprising political naïveté. Because such indicators are at the interface of science and politics, framing the issues in a policy-relevant way is particularly important and generally entails a participatory process. To be effective, indicators must be credible (scientifically valid), legitimate in the eyes of users and stakeholders, and salient or relevant to decision makers.
Policy has a life cycle, from the realization that there is a need for a policy instrument to tackle a certain issue, to the design of the policy and its implementation, evaluation, and adaptation, and finally to its phasing out or integration into another policy instrument. Indicators must meet different information needs at various stages of the policy life cycle. One function would be early warning, raising awareness of an unfavorable trend that may be evidence of a new and emerging issue or signaling a policy gap for an existing issue. Other indicators are used in impact assessments or outlooks, when new policy proposals are being developed, and still others contribute to the mid-term to long-term monitoring of policy implementation.
The policy life cycle for the design of indicator sets necessitates flexibility. Some indicators designed for monitoring will remain policy relevant for a long time, whereas others in the indicator set may need to change for maximum policy relevance. However, flexibility must be offset against the risk of losing familiarity and continuity in the indicators, which are both key elements in their adoption and use.
Indicators often are distinguished from raw data and statistics in that they contain reference values such as benchmarks, thresholds, baselines, and targets. Such values have various functions, but the most important is to transform meaningless data into information. A reference might be a target (distance to target), a baseline (distance to a certain meaningful state), a threshold value (distance to a collapse), a reference year (change in time), or a benchmark (difference with another country). All these reference points lend meaning and political weight to data and are used mostly in the interpretation of indicators. There are still many indicators for which reference values or baselines have yet to be established.
Distance-to-target indicators measure performance in reaching policy goals. Three distinct types of targets can be identified: political or hard targets; soft targets, such as those for sustainability reference values, minimum viable populations, and thresholds; and benchmarks.
Hard targets are set through political processes and can be very useful in producing effective indicators. Where hard targets are vague or qualitative and need clarification or definition, the indicator community can highlight this. Indicator producers can also draw attention to the lack of targets.
Indicators for soft targets, despite their uncertainty, can use ranges transparently, especially when such scientific targets highlight the inadequacy of political targets derived through a consensus process.
Benchmarking adds context to indicators, for instance by ranking countries. The comparison should be acceptable and relevant. However, if all countries are doing badly on a measure, benchmarking against the average will not encourage sustainability. Generally, peer pressure is a good thing among partners in any community, be they scientists, enterprises, or countries. National-level indicators therefore should be developed to allow intercountry comparison. The comparability should be as direct, simple, and evident as possible.
In a world of great differences between countries, it is not easy to select indicators that provide a completely objective assessment of sustainable development. Those living within the Western economic paradigm naturally will choose indicators that reflect their conception of development. Data also are more available in industrialized countries. Developing countries may have different perspectives and priorities. For example, traditional economic indicators may overlook the informal economy and subsistence sector. Designers of indicators for use at the global level must accept a plurality of legitimate perspectives reflecting economic, cultural, environmental, and other differences, with particular attention to a better balance of indicators relevant to different stages of development. Any biases or value assumptions should be acknowledged.
Cultural differences may be expressed in the choice of indicators or in the levels or targets that are seen as sustainable. Because most indicator work has been done in the North, one of the present challenges is to look again at the various indicator sets dealing with sustainable development, such as the Millennium Development Goals (MDGs), the United Nations Environment Programme (UNEP) Global Environment Outlook, and the indicators of the CSD and others, from different cultural perspectives and see whether significant cultural biases can be identified and, if possible, repaired. Cultures probably differ most in social needs such as freedom, acceptance, respect, equity, participation, and gender issues. Nevertheless, a common foundation of values is expressed in UN declarations and conventions on human rights, child labor, and others that identify specific issues (the indicator) and minimum levels. There is a need to distinguish the objective and normative components of indicators and to develop indicators for dimensions such as equity and participation.
Excerpted from Sustainability Indicators by Tomá? Hák, Bedrich Moldan, Arthur Lyon Dahl. Copyright © 2007 Scientific Committee on Problems of the Environment (SCOPE). Excerpted by permission of ISLAND PRESS.
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