PCEC: A New Metric to Measure Human Development

What could be achieved by updating our focus on GDP


In today’s blog, we analyze the potential benefits of swapping out Gross Domestic Product (GDP) for Per Capita Energy Consumption (PCEC) as a measure of human well-being and advancement. 

Although only a theoretical proposal at this point, one primary benefit would be to update what is essentially a 20th Century metric powered by growth over sustainability and regeneration–the two governing metrics of the 21st Century. This is because GDP growth doesn’t necessarily correlate with environmental health. PCEC however focuses on energy consumption, which in turn is directly linked to environmental impacts such as carbon emissions and resource depletion. 

By emphasizing PCEC at both a government and corporate level, there could be a greater policy focus on pursuing sustainable energy sources and reducing overall energy consumption. PCEC also takes into account the efficiency of resource utilization: Higher energy consumption per capita could indicate inefficiency in resource usage, while lower consumption could suggest more efficient utilization of energy resources. 

Such a shift in focus could in turn encourage industries and individuals to optimize their energy use, leading to improved quality of life at both the human and more broader ecological level. PCEC can assist here by providing insights into the energy accessibility and affordability for individuals–a metric that can also be optimized to target equality. This would address one of the limitations of GDP, in that, as a metric, it can mask disparities in wealth distribution among different segments of society or between different countries. 

Technological and Fiscal Innovation 

Shifting the focus to PCEC could also stimulate innovation in energy-efficient technologies and renewable energy sources. Businesses, governments, households and research institutions may be incentivized, either via shareholder or societal cue-points, to invest more resources into developing technologies that reduce energy consumption while maintaining or improving productivity. 

One effective method for increasing adoption of per capita energy consumption is through community-based tax-breaks that reward and promote sustainable practices based on the size of the entity being assessed. Leaders in the fields can be tracked through online platforms or community boards powered by data that is channeled to calculate the PCEC.

This is not to say PCEC is a perfect model. Far from it. It is not designed to calculate aspects of biodiversity directly, for example. Other metrics can be considered or developed in the future that are more integrative. Viewed as a transitional tool to a more comprehensive social metric, however, it could be a modernizing step away from the 20th Century’s GDP, which, for all the gains it has provided humanity, has also helped to cause a great deal of ecological harm. 

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Tags :
climate adaptation,conservation efforts,data,Gross Domestic Product,human development,Per Capital Energy Consumption
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