What is an Indicator of Sustainability?

Reposted from Sustainable Measures.


Maureen Hart

An indicator is something that helps you understand where you are, which way you are going and how far you are from where you want to be. A good indicator alerts you to a problem before it gets too bad and helps you recognize what needs to be done to fix the problem. Indicators of a sustainable community point to areas where the links between the economy, environment and society are weak. They allow you to see where the problem areas are and help show the way to fix those problems.

Indicators of sustainability are different from traditional indicators of economic, social, and environmental progress. Traditional indicators—such as stockholder profits, asthma rates, and water quality—measure changes in one part of a community as if they were entirely independent of the other parts. Sustainability indicators reflect the reality that the three different segments are very tightly interconnected, as shown in the figure below:

As this figure illustrates, the natural resource base provides the materials for production on which jobs and stockholder profits depend. Jobs affect the poverty rate and the poverty rate is related to crime. Air quality, water quality and materials used for production have an effect on health. They may also have an effect on stockholder profits: if a process requires clean water as an input, cleaning up poor quality water prior to processing is an extra expense, which reduces profits. Likewise, health problems, whether due to general air quality problems or exposure to toxic materials, have an effect on worker productivity and contribute to the rising costs of health insurance.

Sustainability requires this type of integrated view of the world—it requires multidimensional indicators that show the links among a community’s economy, environment, and society. For example, the Gross Domestic Product (GDP), a well-publicized traditional indicator, measures the amount of money being spent in a country. It is generally reported as a measure of the country’s economic well-being: the more money being spent, the higher the GDP and the better the overall economic well-being is assumed to be. However, because GDP reflects only the amount of economic activity, regardless of the effect of that activity on the community’s social and environmental health, GDP can go up when overall community health goes down. For example, when there is a ten-car pileup on the highway, the GDP goes up because of the money spent on medical fees and repair costs. On the other hand, if ten people decide not to buy cars and instead walk to work, their health and wealth may increase but the GDP goes down.

“Trying to run a complex society on a single indicator like the Gross National product is like trying to fly a 747 with only one gauge on the instrument panel … imagine if your doctor, when giving you a checkup, did no more than check your blood pressure.”

Hazel Henderson,
Paradigms of Progress

In contrast, a comparable sustainability indicator is the Index of Sustainable Economic Welfare. In order to get a more complete picture of what is economic progress, the ISEW subtracts from the GDP corrections for harmful bases or consequences of economic activity and adds to the GDP corrections for significant activities such as unpaid domestic labor. For instance, the ISEW accounts for air pollution by estimating the cost of damage per ton of five key air pollutants. It accounts for depletion of resources by estimating the cost to replace a barrel of oil equivalent with the same amount of energy from a renewable source. It estimates the cost of climate change due to greenhouse gas emissions per ton of emissions. The cost of ozone depletion is also calculated per ton of ozone depleting substance produced. Additionally, adjustments are made to reflect concern about unequal income distribution. The correction for unpaid domestic labor is based on the average domestic pay rate. Some health expenses are considered as not contributing to welfare, as well as some education expenses. (See Indicator Spotlight for more on the ISEW as a sustainability indicator.)

Like the GDP, the ISEW bundles together in one index tremendous amounts of information, but the key difference is that the information takes into account the links between environment, economy and society.

Indicators of sustainable community are useful to different communities for different reasons. For a healthy, vibrant community, indicators help monitor that health so that negative trends are caught and dealt with before they become a problem. For communities with economic, social, or environmental problems, indicators can point the way to a better future. For all communities, indicators can generate discussion among people with different backgrounds and viewpoints, and, in the process, help create a shared vision of what the community should be.

Traditional Versus Sustainability Indicators

The tables below compare traditional indicators with sustainable community indicators.

Economic Indicators
Traditional Indicators Sustainability Indicators Emphasis of Sustainability Indicators
Median income

Per capita income relative to the U.S. average

 

Number of hours of paid employment at the average wage required to support basic needs

 

What wage can buy

Defines basic needs in terms of sustainable consumption

Unemployment rate

Number of companies

Number of jobs

Diversity and vitality of local job base

Number and variability in size of companies

Number and variability of industry types

Variability of skill levels required for jobs

Resilience of the job market

Ability of the job market to be flexible in times of economic change

Size of the economy as measured by GNP and GDP

 

Wages paid in the local economy that are spent in the local economy

Dollars spent in the local economy which pay for local labor and local natural resources

Percent of local economy based on renewable local resources

 

Local financial resilience

 

Environmental Indicators
Traditional Indicators Sustainability Indicators Emphasis of
Sustainability Indicators
Ambient levels of pollution in air and water Use and generation of toxic materials (both in production and by end user)

Vehicle miles traveled

Measuring activities causing pollution
Tons of solid waste generated Percent of products produced which are durable, repairable, or readily recyclable or compostable Conservative and cyclical use of materials
Cost of fuel Total energy used from all sources

Ratio of renewable energy used at renewable rate compared to nonrenewable energy

Use of resources at sustainable rate
Social Indicators
Traditional Indicators Sustainability Indicators Emphasis of
Sustainability Indicators
SAT and other standardized test scores Number of students trained for jobs that are available in the local economy

Number of students who go to college and come back to the community

Matching job skills and training to needs of the local economy
Number of registered voters Number of voters who vote in elections

Number of voters who attend town meetings

Participation in democratic process

Ability to participate in the democratic process

Characteristics of Effective Indicators

An indicator is something that points to an issue or condition. Its purpose is to show you how well a system is working. If there is a problem, an indicator can help you determine what direction to take to address the issue. Indicators are as varied as the types of systems they monitor. However, there are certain characteristics that effective indicators have in common:

  • Effective indicators are relevant; they show you something about the system that you need to know.
  • Effective indicators are easy to understand, even by people who are not experts.
  • Effective indicators are reliable; you can trust the information that the indicator is providing.
  • Lastly, effective indicators are based on accessible data; the information is available or can be gathered while there is still time to act.

An example of an indicator is the gas gauge in your car. The gas gauge shows you how much gasoline is left in your car. If the gauge shows the tank is almost empty, you know it’s time to fill up. Another example of an indicator is a midterm report card. It shows you whether a student is doing well enough to go to the next grade or if extra help is needed. Both of these indicators provide information to help prevent or solve problems, hopefully before they become too severe.

Indicators can be useful as proxies or substitutes for measuring conditions that are so complex that there is no direct measurement. For instance, it is hard to measure the ‘quality of life in my town’ because there are many different things that make up quality of life and people may have different opinions on which conditions count most. A very simple substitute indicator is ‘Number of people moving into the town compared to the number moving out.’

Examples of familiar measurements used as indicators in everyday life include:

  • Wave height and wind speed are indicators of storm severity
  • Barometric pressure and wind direction are indicators of upcoming weather changes
  • Won-lost record is an indicator of player skills
  • Credit-card debt is an indicator of money-management skills
  • Pulse and blood pressure are indicators of fitness

Note that these are all numeric measurements. Indicators are quantifiable. An indicator is not the same thing as an indication, which is generally not quantifiable, but just a vague clue. In addition to being quantifiable, effective indicators have the four basic characteristics noted above. These characteristics are:

Relevant
An indicator must be relevant, that is, it must fit the purpose for measuring. As indicators, the gas gauge and the report card both measure facts that are relevant. If, instead of measuring the amount of gas in the tank, the gas gauge showed the octane rating of the gasoline, it would not help you decide when to refill the tank. Likewise, a report card that measured the number of pencils used by the student would be a poor indicator of academic performance.

Understandable
An indicator must be understandable. You need to know what it is telling you. There are many different types of gas gauges. Some gauges have a lever that moves between ‘full’ and ’empty’ marks. Other gauges use lights to achieve the same effect. Some gauges show the number of gallons of gasoline left in the tank. Although different, each gauge is understandable to the driver. Similarly, with the report card, different schools have different ways of reporting academic progress. Some schools have letter grades A through F. Other schools use numbers from 100 to 0. Still other schools use written comments. Like the gas gauge, these different measures all express the student’s progress or lack of progress in a way that is understandable to the person reading the report card.

On the other hand, a gas gauge that showed the number of BTU’s left in the tank would probably not be very useful to you in deciding when to fill up the tank. Likewise, a report card that gave grades in ancient Greek script would be a mystery to most people. In order for you to know when action is needed, you must be able to understand what an indicator is telling you.

Reliable
An indicator must be reliable. You must trust what the indicator shows. A good gas gauge and an accurate report card give information that can be relied on. A gas gauge that shows the tank is empty when in fact it is half full would make you stop for gasoline before it is needed. A gas gauge that shows the tank is half full when in fact it is empty would cause you to run out of gas in an inconvenient place. Similarly, if a student’s grade were reported wrong, an honors student could be sent for remedial work and a student who needs help would not get it. An indicator is only useful if you know you can believe what it is showing you.

Reliability is not the same as precision. When your gas gauge registers empty, you know there is still a gallon or so of gasoline left as a reserve. The gas gauge reliably under-reports the amount of gasoline. An indicator does not necessarily need to be precise; it just needs to give a reliable picture of the system it is measuring.

Accessible Data
Indicators must provide timely information. They must give you information while there is time to act. For example, imagine a gas gauge that only gave you the amount of gasoline in the tank when the engine was started. After you have been driving for several hours, that reading is no longer useful. You need to know how much gasoline is in the tank at each moment. Similarly, a report card distributed a week before graduation arrives too late to give a student remedial help. In order for an indicator to be useful in preventing or solving a problem, it must give you the information while there is still time to correct the problem.

One of the biggest problems with developing indicators of sustainability is that frequently the best indicators are those for which there is no data, while the indicators for which there is data are the least able to measure sustainability. This has led many communities to choose traditional data sources and measures for indicators. There are several advantages to traditional indicators. First, the data is readily available and can be used to compare communities. Second, traditional indicators can help to define problem areas. Third, traditional indicators can be combined to create sustainability indicators.

However, there is a real danger that traditional data sources and traditional indicators will focus attention on the traditional solutions that created an unsustainable community in the first place. It may be tempting to keep measuring ‘number of jobs,’ but measuring ‘number of jobs that pay a livable wage and include benefits’ will lead to better solutions. Discussions that include the phrase ‘but you can’t get that data’ are not going to lead to indicators of sustainability. In fact, if you define a list of indicators and find that the data is readily available for every one of them, you probably have not thought hard enough about sustainability. Try to define the best indicators and only settle for less as an interim step while developing data sources for better indicators.


More at Sustainable Measures.