Western Finland on its way to becoming a European model region in sustainable development by the year 2030

Beyond GDP – Measuring progress, true wealth, and the well-being of nations and regions

In November 2007, the European Commission, the European Parliament, the Club of Rome, the OECD and the WWF hosted a high-level conference “Beyond GDP” with the objectives of clarifying the indices most appropriate to measure progress, and how these can best be integrated into the decision-making process and taken up by public debate. Economic indicators such as GDP were never designed to measure well-being comprehensively. Therefore, going beyond GDP means finding indicators that will take into account the environmental and social welfare of the citizens at the same time as the economic performance is being analyzed. This means that there is a strong need to pay more attention to the multidimensional way of monitoring changes in the state of sustainable development in the European nations and regions. (Beyond GDP: Measuring progress, true wealth and the well-being of nations. 19-20.11.2007, Conference Proceedings).

The region of Western Finland emphasizes that regional beyond GDP -indicators have an important role in the implementation of the cohesion policy in the EU. These indicators are essential in the context of the Europe 2020 -strategy, which is a growth strategy for the EU (becoming a smart, sustainable and inclusive economy). According to the pilot work in Western Finland, both single and composite indicators are needed. Single indicators are essential when certain narrow strategic goals are being measured in the region (single indicators show clearly whether the trend is positive or negative). Composite indicators, in turn, give a more holistic overview of the situation and with them it is easier to raise awareness about the central issues in the implementing of the sustainable development policies.

Regional beyond GDP indicators have been developed in Western Finland

The pilot work of the ERDF-funded project: “Western Finland to become a European model region by the year 2030” is presented here. In the project, new indicators have been created for the monitoring of the Western Finland environmental strategy. The project was carried out by the Centre for Economic Development, Transport and the Environment for Southern Ostrobothnia. The Joint Research Center (JRC) in Ispra, Italy has worked as an advisory board for the project, especially concerning the composite indicators. The contact persons have been Senior Researcher Michaela Saisana (Composite indicators) and Senior Researcher Jochen Jesinghaus (the Dashboard of Indicators program).

The indicators for the monitoring of Western Finland's environmental strategy

The following regional Beyond GDP -indicators are divided between five strategic themes in the strategy. The indicators are also divided in key indicators and other follow-up indicators inside these five themes. The indicators are primarily developed so that the values for counties (Ostrobothnia, Southern Ostrobothnia and Central Ostrobothnia) are displayed separately. In some cases it has been possible to display only one indicator value for the whole region of Western Finland.

The trend of each indicator is shown with symbols:

•  + positive trend
•  - negative trend
• +/-0 steady trend

Theme I) Water protection

• Key indicator: nitrogen and phosphorous load from industry and the community (+)
• Key indicator: Ecological status of the waters (+/-0)
• Key indicator: Gravel and rock take (+)
• Key indicator: Ground water areas belonging to voluntary protection programs (+)

Other follow-up indicators:

• The amount of burbot caught (-)
• PH-minimum of the most important rivers (+)
• The appearance of blue green alga (+)
• Total phosphorous and chlorophyll content in the large lakes (+/-0)
• The chemical status of the ground waters (+/-0)
• The throphic level of the seas (-)
• Water consumption (+)

Theme II) Protection of biodiversity

• Key indicator: The management of municipal waste (+)
• Keyindicator: The amount of protected area (+)
• Key indicator: The volume of dead wood (+)
• Key indicator: The volume of retention trees (+)

Other follow-up indicators:

• The amount of hazardous waste from industry (+)
• The peat production volume (+)
• The volume of protected areas in forestry (+)
• The number of organic farms (+)
• The percentage of succeeded nesting of the white-tailed eagle in the Kvarken archipelago (+)
• The forest age structure (-)
• The development of the forest bird population (-)
• The composition of tree species and the amount of common aspen (-)
• The amount of visitors in the national parks (-)

Theme III) Preserving the environment and local traditions of inhabited areas

• Key indicator: The length of pedestrian and bicycle lanes (+)
• Key indicator: The division between urban area and scattered settlement (+)
• Key indicator: Exceptional planning permissions in general planning in the coastal regions (+)
• Key indicator: The amount of approved city plans and general city plans (+)

Other follow-up indicators:

• The number of people shuttling to another municipality (-)
• The number of summer cottages (-)
• The number of agricultural buildings (+/-0)
• The distribution of convenience store-types (+)
• The number of passenger cars (-)
• The number of transport kilometres in the main roads (-)
• The total number of kilometres driven in the main roads (+)
• The number of road accidents (+)
• The amount of carbon dioxide emissions from road traffic (-)
• The commuting distance (-)
• The number of landscape care plans (+)
• The number of protected buildings (-)
• The number of recreational areas in the approved city plans (+/-0)

Theme IV) Environmentally responsible energy production and climate change mitigation

• Key indicator: Electricity consumption (+/-0)
• Key indicator: Carbon dioxide emissions from industry and energy production (+/-0)
• Key indicator: The proportion of wind power in electricity production (+)

Other follow-up indicators:

• The division of energy consumption in industry (+)
• The quantity of emissions from industry and energy production (particles, sulfur dioxide, nitrogen oxide) (+)
• The volume of electricity production (+)
• The consumption of wood-based fuels in energy production (-)
• The amount of waste produced in energy production (-)

Theme V) Promotion of environmental awareness

• Key indicator: The number of sustainable development programs in schools and day care centres (-)
• Key indicator: The number of EMAS-registered organizations (-)
• Key indicator: The number of sustainable development programs in the municipalities (+/-0)

Other follow-up indicators:

• The amount of separately collected bio- and garden waste (+)
• The amount of biodegradation and burned waste in the households (+/-0)
• The number of members in the Finnish Association for Nature Conservation (-)
• The amount of people studying matters which deal with environment (+)
• The amount of mixed waste deposited in landfills (+)

Theme) Economical and societal indicators

• Key indicator: Gross domestic product (+)
• Key indicator: Demographical support ratio (+/-0)
• Key indicator: The amount of unemployed people (+)
• Key indicator: Turnout in general elections (-)

Other follow-up indicators:

• Turnout in communal elections (-)
• Turnout in the European Parliament elections (-)
• Population and the population forecast (+)
• The amount of R&D expenses (+)
• The amount of long-term employed (-)
• The amount of applied and approved patents (-)
• The amount of unemployed youth (+)
• The population of other than Finnish or Swedish speakers (+/-0)
• The amount of applicable income of households (+/-0)
• The amount of internet-visits in the libraries (+)

Regional composite indicators

The suitability of several composite indicators has been researched in the ERDF-project. The main outcome is the Genuine Progress Indicator (GPI) for the region of Western Finland. The results of the preliminary analysis of the suitability of the Environmental Performance Index (EPI) show that this particular index is not a very good tool for regional assessments. The main reason for the negative outcome is that some of its indicators do not describe the characteristics of the Western Finland region very well. Then again, there are many other composite indicators such as the Sustainable Society Index (SSI) that would be applied very well as a regional measuring tool.

Introduction to the Genuine Progress Indicator

The following information is from the publication: Inka Lemmetyinen; Measuring Sustainable Well-being on Sub-national Level in Finland with Genuine Progress Indicator (GPI): Päijät-Häme, Kainuu and the area of Centre for Economic Development, Transport and the Environment for South Ostrobothnia, 1960–2009, Project Report spring 2011.

The Genuine Progress Indicator (GPI) is designed to measure such economic welfare that can be sustained over time and it can be applied both on national and sub-national level. The GPI evaluates the performance of a country or of an area by taking into account more than just the sheer volume of market transactions. While GDP counts all economic activities as positive, GPI adds the value of benefits such as housework and volunteer work and makes deductions for such things as declining environmental quality, disadvantages of urbanization and increasing income inequity. While GDP considers the cost of the negative effects related to economic activity as additions to well-being, the GPI accounts take them as costs, as it is the money people spend just to prevent erosion in their quality of life or to compensate for misfortunes of various kinds.

Examples of this are the medical and repair bills from automobile accidents and commuting costs. The GPI counts such "defensive" expenditures as most people do: as costs rather than as benefits. The indicator is especially useful in looking at long-term trends. As a monetary-value indicator it can link the environmental and sustainability issues as part of the economic well-being and is thus helpful in monitoring different trade-offs.

The Genuine Progress Indicator for the Western Finland area – A Regional GPI to measure regional welfare adjusted for the first time in the EU

The GPI is calculated on sub-national level for the regions of Kainuu, Päijät-Häme and Western Finland. The study was conducted as a part of the European Union‘s (EU) Interreg IV C FRESH Project (Forwarding Regional Environmental Sustainable Hierarchies) and the GPI is here tested as a potential new composite indicator to measure regional economic, social and environmental progress. The study was conducted at Lahti Science and Business Park Ltd by M.Sc. (econ.) Inka Lemmetyinen. Jukka Hoffrén, the head of research at Statistics Finland, and Hannele Ilvessalo-Lax at Etelä-Pohjanmaa ELY-centre took the initiative to carry out the Finnish sub-national applications with the GPI.

Overall, the GDP gives a very positive picture of the development, without any disturbing signs about global warming, the growing environmental burden of economic activities, the over-exploitation of natural resources or the imbalance of income distribution. The GDP keeps on rising after the economic recession during 1990. This trend is not seen in the GPI.

The strengths of Western Finland are the low levels of crime and unemployment, the short commuting distances and other factors relating to urbanization that can be called “negative externalities” or “defensive expenditures”. In addition to this, the income distribution in the area is rather even and the residents are highly educated. The large areas of drained wetlands, high CO₂ –emissions and other discharges to air and water cut the resulting GPI figures very close to the Finnish average. The area of Western Finland should increase the proportion of renewable energy consumption and cut down the emissions resulting e.g. from agriculture. The quality of life for the inhabitants of the area of CEDESO seems fairly good.

The costs of environmental degradation and depletion of natural resources are significant in the area of Western Finland. The biggest negative factors are the cost of air pollution, the cost of water pollution, the loss of wetlands, the depletion of the non-renewable natural resources and the damage caused by carbon dioxide emissions. In addition to different kinds of emissions, the costs incurred by draining wetlands are substantial. It was calculated that in the area of Western Finland around 75 % of the initial wetland area was drained before the year 1990 (560 000 hectares), after which some 70 000 hectares have been restored.

In the area of Western Finland the forest area has been growing steadily during the period and this slightly compensates the environmental costs. The discharges to water (nitrogen and phosphorous) in the area of Western Finland currently mainly originate from agriculture. According to the data from VAHTI databases, these emissions have significantly diminished only after 2005. The amount of carbon dioxide emitted within the area of Western Finland has fluctuated notably between 1995 and 2009. These changes are mostly caused by peaks in the energy production in the county of Ostrobothnia, while Southern and Central Ostrobothnia cause less emissions.

Additional information

Special Planner Hannele Ilvessalo-Lax,
West Finland Environment Centre, telephone +358 40 543 2530,
firstname.lastname@ymparisto.fi [hannele ilvessalo]

Project Planner Mikko Suorsa, firstname.lastname@ymparisto.fi [mikko suorsa]