6.The inter-relationships between economic, environmental and social capital

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Given the significant differences in the measures of progress highlighted earlier, we should ask what are the likely consequences of our current approaches to measuring wellbeing and sustainability?

The absence of a clear conceptual understanding of 'progress' has led some to formulate their own interpretations of the concept, or to use a definition that reflects their own value judgments. The lack of a clear conceptual framework for measuring progress combined with a lack of understanding of the limitations of the alternative measures of progress has led certain groups to try to impose their sets of values on the rest of society. This has led to confusion around measures of current wellbeing and sustainability, and a polarised debate on the elements that should be considered when measuring them.

Just as using GDP as a measure of progress can be misleading because it only measures market production, using other indicators that focus on other specific elements of wellbeing or sustainability could also lead us astray. Measures that confuse current wellbeing with sustainability can mislead because they do not measure 'overconsumption'. This does not mean that these other indicators are not useful. It simply means that, if we are to use indicators to develop and assess policy, we need to be clear about what they measure and their limitations.

In the case of measures of sustainability, the polarised debate has resulted in sustainability often been taken as to mean outcomes that are 'environmentally desirable' (Pezzey and Toman 2002). This is clearly the case for measures based on the strong form of sustainability. As outlined in Treasury (2002), the key risk of such a polarised debate is that it can lead to the pursuit of policies that are not consistent with sustainable development. For example, policies to protect the environment that do not take into account economic and social consequences can clearly violate sustainable development principles, just as poor economic policies can lead to excessive environmental degradation. In addition, what is less appreciated is that policies pursued under the sustainable development banner may involve implicit trade-offs between different environmental pressures (Treasury 2002). For example, policies focused solely on addressing a particular environmental issue may lead to environmental problems elsewhere.