Since the industrial era, it is evident that our contemporary society has expanded in numerous aspects. However, a concerning global mental health crisis, alongside climate change, leads us to the realisation that our current economic system that aspires to endless growth, is counterproductive for human and/or planetary wellbeing. This post will then explore the extent to which the obsession with GDP-growth in which the economy operates is failing to deliver this purpose, while exploring alternative economic models and metrics that have started to be adopted worldwide, such as the Happy Planet Index (HPI) and the implementation of wellbeing economic principles in Scotland.

In 1972, the Club of Rome published the ground-breaking book “Limits to Growth”, concluding that the natural resources available are finite. Humans cannot continue with the current pace of consumption, particularly since technology will be unable to solve climate change (The Club of Rome 1972); the latest IPCC report warns us that delayed climate action will result on an unliveable future. Additionally, 2009 was recorded as the only year when GHG emissions reduced and in which global economy did not grow (Grist 2015).

A remarkable proposal is therefore to decline the current economic system by exploring alternative pathways to measure progress going beyond GDP. Elements such as sense of belonging or access to nature are gaining recognition, and similarly, metrics like The Happy Planet Index (HPI) are presenting challenges to the mainstream capitalist standards. Being the leading measure of ‘sustainable wellbeing’, the HPI measures ‘efficiency’ by three key indicators: Wellbeing, Life Expectancy and Ecological footprint.

WEF https://www.weforum.org/agenda/2016/07/greenest-happiest-country-in-the-world/

Costa Rica is the country that leads the highest HPI score, and interestingly, it surpasses Western economies on sustainable wellbeing. In 2021, Central and South America countries dominated the top 10 rank. To break free from the general obsession with GDP growth, societies thriving on higher wellbeing lifestyles and lower ecological footprints should be the point of aspiration. Using the minimum natural resources, countries such as Costa Rica get to generate the maximum ‘outputs’ of long, happy lives. The HPI website offers a tool  that compares the results from different countries… if we take Costa Rica and the U.S., the figures speak by themselves.

As a nation whose GDP per capita is below half of the U.S.’s, Costa Rica, outperforms on life expectancy, wellbeing, and environmental sustainability. The U.S. was the lower scoring G7 nation, the Wellbeing Economy Alliance (WEAll) (2022) suggests.

From this observation, we see that both human and ecological wellbeing are attainable; however, to what extent are countries able to implement alternative economic measures within policy? To answer this question, let’s look at the case of Scotland, a country that since 2018 is part of the “WEGo” (Wellbeing Economy Governments) partnership, alongside Iceland, Finland, New Zealand, and Wales.  A Wellbeing Economy “delivers social justice on a healthy planet”, and it is based on the following five key aspects required for collective wellbeing: Dignity, Participation, Fairness, Purpose and Nature at the core.

WEAll Scotland (2022)

Only a year after joining the WEGo group, Sturgeon herself gave a TED talk on “why governments should prioritise wellbeing”. As a country with some of the most ambitious climate change targets, and Councils in agreement of supporting this narrative, the Scottish Government is openly committed to an economic transformation aiming at “delivering a just transition to a net zero, nature-positive economy based on the principles of equality, prosperity and resilience”.

As Trebeck (2020) noted, in a wellbeing economy there are certain industries such as the oil sector, will not be as prominent (that is, if they exist at all), reason why a transition towards greener jobs through the transferring of skills is a feasible opportunity, as well as moving towards circular economic initiatives. In fact, the Scottish Government recently opened a consultation around circular economic practices. There were significant improvements in waste management and recycling systems; however, WEAll Scotland (2022) points that nature restoration initiatives are still missed, since “the extraction, consumption and waste of materials is deeply embedded in our current economic system”. Another signal that despite significant efforts, the nation is rooted on a wider, dominant system that prioritises economic growth. The taxation scenario equally contributes to greater inequalities. Trebeck (2020) also suggests that community wealth building (this is, budling economies from the community up by guaranteeing more local spending and local ownership) as way for businesses to deliver for its communities, and ultimately a wellbeing economy would be requiring less redistribution because the poverty gap would be smaller.

Another crucial element is a healthy work-life balance, and we know that Scotland has committed to testing how a four-day working week might look like in the nation as it has been proved to improve employee’s satisfaction and productivity. Research from the New Economic Foundation showed that shorter working weeks give people more control over their time and autonomy (Flexibility Works 2021).

The recent pandemic showed us that we as a society, are vulnerable. Governments have the capacity to transform the status quo and building a path for system change. By adopting new indicators to measure progress and models like the wellbeing economy, countries around the globe are beginning to write a new narrative. For this reason, it is crucial that decisionmakers are elected for their concerns on ecological and wellbeing issues. We need leaders that are conscious enough to prioritise these aspects beyond GDP, and a supportive framework by which they can implement these. Even though there is a long way left to go, Scotland is an example that this is possible.

Reference list

1. Understanding “The Limits of Growth”: A clear warning and message of hope (1972)
2. https://www.gov.scot/publications/wellbeing-economy-toolkit-supporting-place-based-economic-strategy-policy-development/pages/3/ Scotland WEllb ec
3. Quick, A (2020) https://neweconomics.org/2020/10/wellbeing-and-gdp-explained
4. WEAll Scotland Briefing – April 2022
5. Michaelson et al. 2009 The Happy Planet Index 2.0 https://neweconomics.org/2009/06/happy-planet-index-2-0
6. WEAll (2022) https://weall.org/the-latest-happy-planet-index-costa-rica-tops-the-list-beating-western-economies-on-sustainable-wellbeing
7. Trebeck, K. (2020) WEAll Ideas: Little Summaries of Big Issues – A wellbeing economy for Scotland; Extract from position paper prepared for Citizens Assembly of Scotland. Available: https://www.weallscotland.org/_files/ugd/d7012c_feae0c2c89f34741b62831a15c78a43c.pdf?index=true