In 2012, the Legislature passed Act 113, which called for the establishment of a “Genuine Progress Indicator” (GPI) for the state.
GPI is a more nuanced spinoff of the gross state product (GSP), the accepted measurement for economic output. It looks at 25 factors, ranging from personal consumption to air pollution. Environmental and social costs, like the loss of leisure time or the cost of commuting, get subtracted from economic output.
Staff at the University of Vermont’s Gund Institute for Ecological Economics, who are setting up the GPI, have mapped the trends in Vermont’s scores, going back to 1960. They showed the results to the Government Accountability Committee at the Statehouse Tuesday.
The findings showed a 43 percent gap between the growth of GSP and GPI in 2010.
Environmental degradation is largely responsible for that discrepancy, according to Jon Erickson, a UVM professor who also works at the Gund Institute.
“The biggest thing is what we know, the cost of climate change and ozone depletion,” Erickson said. Erickson pointed out that Vermont doesn’t have much control over ozone depletion, which is calculated from national data. State-specific information is not available.
But the state does have control over other environmental factors like nonrenewable energy usage and water pollution, which tugged the state’s GPI score down quite a bit. Eighty-seven percent of the total acreage of ponds and lakes are considered degraded, Erickson said.
Vermont doesn’t have much to compare itself to at the moment. Maryland is the only other state that’s adopted the GPI, but Erickson said that could change soon — Massachusetts, Oregon and Hawaii are working to develop GPIs, and a handful of other states are considering it.
An aide confirmed that Sen. Bernie Sanders is also toying with the idea of introducing legislation at the national level.
Does the GPI have any value on a policy level?
Sen. Anthony Pollina, D/P-Washington, who spearheaded the effort to pass Act 113, thinks so. He envisions legislation, which is sometimes accompanied by a “fiscal note” outlining its price tag, also coming with a “GPI note” outlining the social and environmental costs.
Pollina said policymakers were pleased when they balanced the 2014 budget in part because they could overlook costs, such as the environmental price of choosing not to invest in weatherization efforts.
“We may still make the same decisions, but we’ll have a clear understanding of the impact,” Pollina said. Without those costs spelled out for them, “it allows politicians and policymakers to paint a rosy picture.”
Eric Zencey, a fellow at the Gund Institute, told lawmakers that the GPI does away with some of the counterintuitive quirks of the gross state product. If you look purely at economic output, Tropical Storm Irene was a boon to the state because it prompted more construction and personal consumption. GPI calculates the value of public infrastructure each year that it exists, Zencey explained, rather than only counting it during the year it was built.
One of the obvious benefits of GSP is that it’s a straightforward calculation drawn from readily available data. The same can’t be said for GPI, which takes into account things like “lost leisure time” and the “value of volunteer work” that is harder to quantify. Each of the 25 factors is also weighted and some of those values still need to be fine-tuned, Erickson said.
For a number of the indicators, there’s also paucity of state-level data, Zencey said, and one of the recommendations the Gund staff gave to lawmakers was to increase data collection.
The next steps for the project are to set up a “data advisory group” with the secretary of administration and then to explore the role that GPI can play in state policy analysis.