heaeder-trees1

GENUINE PROGRESS INDICATOR FOR MARYLAND
News Release, February 3, 2010

With the development of the Maryland Genuine Progress Indicator, CIER is leading efforts to move beyond the simplistic GDP (Gross Domestic Product) currently used to measure growth with an alternative set of indicators that measures environmental impacts and social wellbeing. The Maryland Governor announced the tool in February 2010.

Moving Beyond GDP

The Gross Domestic Product, or the Gross State Product, was never intended to fully capture the progress and prosperity of a nation or a state. It only measures economic output, on markets that can be easily measured..

But social activities like housework or volunteering are not included, and environmental and social impacts on well-being are ignored. Meanwhile, regrettable expenditures on crime prevention or commuting are counted as a positive. Despite all those shortcomings, the GDP (or GSP) is generally used as the key indicator of the (economic) success of a state or a nation.

CIER is working with Office for a Sustainable Future at the Maryland Department of Natural Resources to develop alternative measurement tools. This work has led to the creation of a working group across various state agencies, which is now, under the scientific direction of CIER, near completing the first Maryland Genuine Progress Indicator (GPI).

CIER has also created a dynamic model capturing the effect of various policy options on the development of the GPI. The main result will be a website, currently under review with the Governors Office, providing extensive information on each element of the composite GPI index, including the methodologies used, policy implications and connections with other Maryland initiatives.

Both the GPI index and the dynamic model will be refined and updated on an annual level, to provide a meaningful measure to the progress of the State of Maryland.

For Additional Information:

CIER staff involved in this project include:

  • Hans Haake
  • Daria Karetnikov
  • Emma Roach
  • Pranav Vaidya
  • Matthias Ruth

What's in the GPI?

The Genuine Progress Indicator has its starting point with the GDP and its many shortcomings. The intention is to only count parts of GDP that actually contribute to human well-being, and make corrections for benefits not captured by GDP.

The GPI Formula improves the accuracy of GDP by adding or subtracting the following factors:


- Cost of Consumer Durables
+Services of Consumer Durables
- Cost of Underemployment
+ Net Capital Investment
- Cost of Water Pollution
- Cost of Air Pollution
- Cost of Noise Pollution
- Cost of Net Wetland Change
- Cost of Net Farmland Change
- Cost of Net Forest Cover Change
- Cost of Climate Change
- Cost of Ozone Depletion
- Cost of Nonrenewable Resource Depletion
+ Value of Housework
- Cost of Family Breakdown
- Cost of Crime
- Cost of Personal Pollution Abatement
+ Value of Volunteer Time
- Loss of Leisure Time
+ Value of Higher Education
+ Services of Highways and Streets
- Cost of Commuting
- Cost of Automobile Accidents
= Genuine Progress Indicator