The Environmental Audit Committee has written to Rishi Sunak and National Statistician Sir Ian Diamond calling for the UK to adopt a more rounded definition of economic success
Estimates of greenhouse gas emissions should be published alongside GDP figures to make it clearer to policymakers and the public how economic growth and slashing emissions can be achieved together, the Environmental Audit Committee (EAC) has said.
The call has been made in letters sent today to Chancellor Rishi Sunak and the National Statistician, Sir Ian Diamond. The EAC acknowledged GDP is useful in offering a clear headline figure for economic performance, but the MPs argued that its narrow scope fails to acknowledge other indicators such as environmental impacts and social capital. It also fails to fully assess prosperity and societal wellbeing, they said, echoing a huge library of academic research that has long questioned the primacy of GDP in economic policymaking.
“GDP has been a useful indicator for decades, but it can play a more useful role in the next 30 years alongside greener metrics as the UK strives to meet net zero,” said EAC chair Philip Dunne. “Publishing estimates of environmental performance and greenhouse gas emissions alongside the quarterly release of GDP figures will enable the public to see whether we are achieving economic growth while slashing emissions and improving environmental performance. A new metric could offer a helpful stocktake to highlight whether the UK’s greening efforts are working, or whether they are merely greenwashing.”
The EAC said it recognised there had been some success in recent decades in decoupling the UK’s carbon dioxide emissions from its GDP growth, yet warned decarbonisation efforts needed to accelerate rapidly if the country is to meet its future carbon budgets on the path to achieving net zero emissions by 2050.
The letters point to a recent review by University of Cambridge economist Professor Sir Partha Dasgupta, which warned that because GDP does not currently account for the deprecation of natural assets, it encourages the pursuit of “unsustainable economic growth and development”.
To meet climate and nature goals, policy decisions on tax, spending, project appraisal, and financial regulation must all be made through a net zero and environmental sustainability lens, the committee’s letters note. But fears remain widespread in environmental circles that a fixation on GDP metrics that struggle to account for long term improvements in natural capital, human health, and risk reduction could result in green policies being sidelined.
“Ministers assure this committee and others at regular intervals that the whole of government is committed to net zero,” Dunne said. “We are concerned at the significant and worrying gap between ambition and implementation on climate polices. The UK is currently falling behind in meeting its future carbon budgets: we must pull out all the stops to ensure that economic policy is not viewed in isolation from climate and environment policy.”
A spokesperson for the Office for National Statistics (ONS) said the agency “already has a strong track record of providing valuable insights on our environment and how it’s changing”.
“That includes producing the UK’s environmental accounts, measuring the low carbon and renewable energy economy, estimating the value of nature to the UK economy and its people, and more recently working with analysts across government to develop and launch a new climate change statistics portal,” they added. “We are continuing to develop our approach in this area, ensuring it meets everyone’s needs. As part of that process we look forward to reflecting on and responding to the committee’s suggestions in due course.”
The Treasury was also contacted for comment.