Increases in gross domestic product (GDP) beyond a threshold of basic needs do not lead to further increases in well-being – this is widely supported by research. We also know that indefinite economic growth is impossible in a finite world. Yet conventional economic growth driven by escalating material consumption remains a primary goal of government policy around the world.
If we want to see well-being and health improve, policies that promote a greener economy should be pursued. Redefining what we think of as prosperity, encouraging the consumption of green goods and services – and moving away from an emphasis on material consumption – could save governments money, as well as lead to better lives for its citizens.
Well-being and GDP
GDP growth has brought with it substantial improvements on a number of fronts – from medical services to crime detection, better transport and housing and, increasingly, the adoption of renewable sources of energy. This has helped average life expectancy to rise significantly and under-five mortality rates to fall. But well-being and life satisfaction seem to peak at low GDP, and do not increase as GDP grows.
As the graph shows, there is a sharp consumption cliff at low GDP, but after a threshold the affluent uplands bring no further increases in life satisfaction.
We wanted to understand why this is the case and work out how we can improve society’s health and well-being alongside GDP growth. Our findings were recently published in the International Journal of Environmental Health Research. They show that material consumption brings with it unintended and costly side-effects. This means that growth that’s focused on improving health and well-being must be pursued, instead of just growth for its own sake.
Health costs of living longer
The irony of increased GDP and living longer is that new health problems and associated costs have accompanied this. We have calculated the costs to health care systems and the economy that arise from modern lifestyles in the UK.
The direct cost of mental ill-health, dementias, obesity, physical inactivity, diabetes, loneliness and cardio-vascular disease (including strokes) is £60 billion each year. The full cost to the whole economy is approximately £180 billion annually (18.6% of GDP). The revenue expenditure of the 248 NHS Trusts in 2011-12 was £102 billion.
Clearly there are huge health savings to be made by reducing the prevalence of these conditions. Prevention is key, instead of waiting to treat conditions and diseases when they occur. This is something Britain’s chief medical officer has emphasised. She estimates that there is a 6-10% annual rate of return on investments made in early life interventions.
Getting policy right
In affluent countries, some efforts have been made to shift individual behaviour toward greater well-being. But generally these have been limited in number, for example legislating for unleaded petrol and smoking bans. Or they only affect small subsets of the population such as recommendations for regular physical activity and daily consumption of fruit and vegetables.
Policymakers face a dilemma: reducing material consumption to save the planet undermines an economy founded on continuing consumption. Yet continuing material consumption at current rates to sustain the economy is clearly costly and is destroying the planet.
Our research shows, however, that a substantial financial dividend could be released by a greener and healthier economy. Instead of encouraging material growth and consumption, we should consume in a way that is environmentally sustainable. This will not only benefit the planet, but our health and well-being too.
A different type of consumption
The UN Environment Programme defines a green economy as “resulting in human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. There are clear health and financial benefits to promoting this.
Encouraging environmentally sustainable consumption instead of all material consumption is an important aspect of creating a green economy. This centres on activities that produces greater well-being such as healthy food, regular engagement with nature, regular physical activity, the use of the power of thought and contemplation, enhancing social bonds and increasing attachment to possessions and places.
We know that social and physical environments can promote good health, and there is growing evidence showing that behaviour at the individual level can make significant contributions to well-being. For example, regular physical activity such as walking pushes back the onset of dementia and volunteers live longer than non-volunteers. Loneliness has been calculated to be as bad for our health as smoking 15 cigarettes a day, while eating one more fruit or vegetable a day improves health.
It is now clear that health and social inequalities prevent many people from leading healthy lives. We now need to prioritise improving well-being for all members of society by encouraging healthy lifestyles, active travel, creating liveable environments for people to enjoy and increasing social capital for all. A greener economy is a better economy. It might help save the planet too.
This article is part of an ongoing series, Beyond GDP, which looks at the dominance of GDP in economic thinking and how that might change. Read more here