Environment and Development Economics

Policy Options

Measuring sustainable development: progress on indicators*

David Pearcea1, Kirk Hamiltona1 and Giles Atkinsona1

a1 Centre for Social and Economic Research on the Global Environment (CSERGE), University College London, 136 Gower Street, London, WC1E 6BT, UK


The search for sustainability indicators should be guided by a theory of sustainable development (SD). In this paper we investigate two such theoretical frameworks and the indicators that they suggest. Indicators associated with weak sustainability are characterized by aggregative indicators such as green national income. We conclude, however, that a more promising offshoot of green accounting is measures of genuine savings (i.e. savings adjusted for loss of assets). To achieve SD, genuine savings rates must not be persistently negative. Strong sustainability indicators accord a more central role to the conservation of critical natural assets within the broader goal of prudently managing a nation's portfolio of assets over time. We discuss two approaches—carrying capacity and resilience—and conclude that, while measures of resilience are potentially attractive, more research is required regarding the resilience–SD link. However, an important conclusion that we can make is that, even in an economy operating under a strong sustainability regime, genuine savings are still key indicators of SD and are complementary to measures of changes in stocks of critical natural assets.


* An earlier version of this paper was presented at the Resource Policy Consortium Symposium, Washington, DC, 12–13 June 1995. CSERGE is a designated research centre of the UK Economic and Social Research Council (ESRC). This paper is part of a research programme on environmental sustainability funded by Directorate General XII of the European Commission. We are grateful for the comments of two anonymous referees. All errors remain the responsibility of the authors.