The way the world thinks about nations’ economic development is out of date
In the 1990s, the world began to shift its understanding of countries’ development away from a purely economic one to something more “people-centred” with the UN’s introduction of an annual Human Development Report, which used health and education indicators in addition to national income in order to assess a country’s progress. That eventually evolved into the Human Development Index (HDI), a ranking of countries’ achievements across three basic markers – health, knowledge and standard of living – first published in 2010 and which is now used universally.
With the world more focused than ever on climate change, however, it seems logical that countries’ development should be assessed on the basis of their environmental practices, too. In its 2020 Human Development Report the UN Development Programme proposed a new, experimental index called the Planetary Pressures-adjusted Human Development Index (PHDI), which adjusts a given country’s HDI using two indicators: carbon dioxide emissions and material footprint, per capita.
In other words, it is an index that maps pressure on the planet as part of the development process, with material footprint being the amount of fossil fuels, metals and other resources consumed by a population. The recommendation to adopt this new metric came at a time when the UN warned that “scientists believe that for the first time, instead of the planet shaping humans, humans are knowingly shaping the planet”.
The PHDI offers a fresh perspective; for decades, the emphasis in improving people’s lives had been solely on economic growth, which often undermined the importance of the environment in well-being. With global temperatures rising, and more resources required to sustain population growth, deforestation and carbon emissions are exerting greater pressure on the planet than ever before.
The PHDI is a great step forward in development thinking, although it is not without limitations, for now. For example, giving such significant weight to carbon emissions could be unfair to developing countries. There are two bases on which a country’s carbon footprint could be calculated: production and consumption. By focusing heavily on emissions, the PHDI uses the former when it might be better to give more weight to the latter. Emphasising production can lead to scenarios where richer countries can technically be said to reduce their carbon emissions by de-industrialising, but without actually lowering their overall carbon consumption (i.e. they may still be importing large amounts of carbon resources from poorer countries, whose people may be consuming much less).
How to best assess carbon footprints is an ongoing debate within the international community. But there are other challenges that could hinder countries’ adoption of the PHDI as a new global standard. There is still a lack of awareness and comprehension of the index’s implications among many governments and policymakers. The novelty of the concept necessitates global education and the development of clearly defined implementation strategies.
Governments, moreover, may be reluctant to embrace new indices or modify existing ones due to concerns about the impact that may have on their place in rankings. Notably, in 2021, the adjustment to PHDI caused the US to drop by 45 places in the human development rankings, and Australia and Norway to drop by 72 and 15, respectively.
Furthermore, devising a standardised and universally accepted way of calculating planetary pressures poses challenges of its own. Each country has unique abilities and constraints when it comes to collecting, analysing and interpreting data on this subject. Economic and environmental indicators have been established and refined by academics and governments over decades, but putting the two together to make judgments on human development is a relatively new field. Widespread adoption requires significant improvements in data collection and reporting mechanisms in many countries.
Notably, the PHDI suffers from the same issues that all international discussions on climate change suffer from these days: deep disagreement about countries’ historical or current responsibilities, concerns about fairness and the difficulty of securing international consensus on the best approach. The lack of collaboration and consensus among countries remains a significant obstacle to the PHDI replacing the HDI.
As with many countries in other regions, rich countries in the Middle East will find that the transition from HDI to PHDI results in a decline in their rankings. But this ought to provide them with motivation to address the observed discrepancy and consider the integration of the PHDI into their national development assessments. And that should only be done after careful assessment by local social welfare authorities and environment agencies.
But a greater understanding, refinement and adoption of the principles of the PHDI here in the region would ultimately align with countries’ net zero strategies and contribute to what is an increasingly common understanding in this part of the world: that promoting a holistic view of sustainability is vital to protecting the planet – and its people – in the longer term.
It seems logical that countries’ development should be assessed on the basis of their environmental practices