Context: Inclusive wealth index, as part of the Inclusive Wealth Report 2018 has been released by the UN Environment and partners. The Inclusive Wealth Report (IWR) is a biennial effort led by the UN Environment to evaluate the capacities and performance of the nations around the world to measure sustainability of economy and wellbeing of their people.

What is Inclusive Wealth Index?

• The inclusive wealth index is a tool assessing a nation’s ability to look after its wealth in a way that is sustainable and safeguards its future generations. While GDP measures the size of a country’s economy, inclusive wealth index focuses on stocks of manufactured, human and natural capital.
• The Index provides important insights into long-term economic growth and human well-being. The Index measures the wealth of nations through a comprehensive analysis of a country’s productive base and the country’s wealth in terms of progress, well-being and long-term sustainability.

Highlights of the report:

• The Inclusive wealth (IW) in 135 countries was higher in 2014 compared to the level in 1990 and the global growth rate of IW was 44% over the indicated period, which implies an average growth rate of 1.8% per year. However, during the same period the global GDP growth per year was 3.4%, which is close to twofold of the annual growth rate of growth in IW.
• The biennial report finds The Republic of Korea, Singapore and Malta as the nations that have had the most economic growth. The report also revealed that carbon damage is relatively larger in high-income countries.
• Performance of India:
• India too sails in the same boat, the Ministry of Statistics and Programme Implementation had said last month in a report on environment accounts. It had revealed that India’s economic growth took a toll on its natural assets like forests, food and clean air. It had added that when the average growth rate of gross state domestic product (GSDP) during 2005-15 for almost all the states was around 7-8%, 11 states registered a decline in their natural capital.

Way ahead:

• The report comes after the recent Intergovernmental Panel on Climate Change (IPCC) report said that the world has just 12 years left to limit global warming to 1.5°C. The health of an economy is drawn from the health of the environment. Therefore, to make the right choices that will keep us on a sustainable path, we have to be able to properly measure our progress. The report will equip policy-makers with the right numbers, so that they can make the right decisions to deliver results for generations to come. These reports remind the world about how important sustainable use of natural resources is.

About UN Environment:

• The United Nations Environment Programme (UN Environment) is the leading global environmental authority that sets the global environmental agenda, promotes the coherent implementation of the environmental dimension of sustainable development within the United Nations system, and serves as an authoritative advocate for the global environment. Its mission is to provide leadership and encourage partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations.
• The World Meteorological Organization and UN Environment established the Intergovernmental Panel on Climate Change (IPCC) in 1988. UN Environment is also one of several Implementing Agencies for the Global Environment Facility (GEF) and the Multilateral Fund for the Implementation of the Montreal Protocol, and it is also a member of the United Nations Development Group.