In 2020, the UNDP published a new metric that for the first time seeks officially to adjust the Human Development Index (HDI) for ecological pressure, accounting for countries’ carbon emissions and resource use on a per capita basis. This is an important step forward; I support the effort and I applaud the work of those who are involved. But the new metric, known as the Planetary pressures-adjusted HDI (or PHDI), also suffers from several significant limitations, and in the end does not tell us very much about sustainability.
If you look at the PHDI ranking, you’ll notice some rather odd results right away. Ireland and Switzerland sit at the top of the pile, for example, with scores of 0.83 (putting them in the “very high” category). This is odd because Ireland’s emissions are still dangerously high, even according to the territorial data that the UNDP uses, at 7.7 tons of CO2 per capita (several times in excess of what would be compatible with safe carbon budgets), and Switzerland’s resource use, at 32 tons of material footprint per capita, is nearly five times higher than what industrial ecologists consider to be the maximum sustainable level.
In other words, these countries are among the most ecologically destructive countries in the world. If the whole population were to consume and emit like Ireland and Switzerland, we would be living on a dead planet right now. And yet they are given a pass on the PHDI, along with many other rich countries: Germany, Sweden and Belgium are next in the ranking, and all of them have extremely high levels of resource use and emissions. Even the United States fares pretty well on the PHDI, despite having resource use and emissions that rank among the world’s worst.
The reason for this has to do with how the PHDI formula is structured. It works by multiplying the normal HDI by an “adjustment” factor, A, which is the average of two indexes: one for emissions and the other for resource use. The indexes are normalized according to the following formula:
The “observed value” here is a nation’s resource use (tons of Material Footprint per capita) or emissions (tons of CO2 per capita), the “maximum” is the highest value recorded for any nation in any year, and the “minimum” is zero. The result is an index between 0 and 1. The formula is structured so that nations with high resource use and emissions have an A value closer to zero, which adjusts their HDI downward, while nations with lower resource use and emissions have an A value closer to 1, and their HDI stays more intact.
The problem is that the adjustment factor is highly sensitive to the maximum values chosen for CO2 and MF. And the UNDP has chosen very, very high values: 70 tons of CO2 per capita, and a staggering 153 tons of material footprint per capita. These figures are several times higher than what most high-income countries consume (and are probably data outliers). The upshot is that even very high levels of resource use and emissions show up as only moderately bad on the adjustment index, even if they are vastly in excess of sustainable levels. This is clearly not a reasonable approach.
One way to mitigate this problem is to reduce the maximum values. For example, if we reduce the resource use threshold to 48 tons and the emissions threshold to 38 tons (the highest recorded values once we remove probable data outliers), the results change quite a lot. Ireland goes from 0.83 down to 0.64 on the index, and Switzerland goes from 0.83 down to 0.58. All the other rich countries drop, too, and the countries that rise to the top are middle-income countries that manage to achieve relatively high levels of human development with low levels of resource use and emissions: Costa Rica, Sri Lanka, Panama, Georgia, Cuba and Albania. As it happens, the top performers turn out to be very similar to those identified in the Sustainable Development Index.
But this still leaves us with a problem. Setting the max value at the highest observed figure means that if one country ramps up its resource use and emissions the max value goes up, which would make everyone else's sustainability position “improve” in the index, even though no improvement is happening in reality. This is not an acceptable function, from the perspective of ecology.
The best way to solve this problem is to set a firm boundary for the maximum values, ideally with reference to ecologically sustainable thresholds. We use this approach in the Sustainable Development Index, and it can be modified to fit the logic of the PHDI. One option is to formulate the adjustment index so countries with emissions and resource use less than the sustainable threshold have an A of 1 or very close to 1. Then, as overshoot increases, the index declines progressively down to an inflection point at some multiple of the max threshold, and additional resource use beyond this point brings A down asymptotically toward 0.
The UNDP has taken an important step in moving to adjust the HDI for ecological pressure. But it still needs some work. It is imperative that we develop a PHDI that takes planetary boundaries seriously. Rich countries may not fare well under such a metric, but that’s okay. We should have the courage to describe reality as it is. Our analysis should be informed by science, not by politics.