1 What Are Sustainability Indicators For?

Rachael Garrett and Agnieszka E Latawiec

1.1 Introduction

Indicators are critical to both scientific inquiry and policy development in complex systems. They are concise information systems that provide quantitative and qualitative information about the condition and trajectory of a system and why certain trends occur in specified contexts (Bell and Morse, 2008). To date a wide range of sustainability indicators have been proposed by different authors and organizations (Bell and Morse, 2008; Moldan et al., 2012). The selection and use of specific indicators from among these myriad choices depends on a range of factors, including values about the goals of such indicators and appropriate temporal and spatial scales of assessment. One cannot use every indicator potentially available, so an element of simplification, while maximizing unique and relevant information, is essential. Due to these value differences regarding objectives and scope, the selection of sustainability indicators will undoubtedly involve substantial discussion within an organization. The selection of indicators will also be influenced by the availability of resources, time constraints, and data. Due to these reasons there can be no a priori “best set” of sustainability indicators within a particular sector or region. Nevertheless, the goals of this chapter are to help improve the selection of indicators for sustainability science and policy by: i) Discussing the purpose of sustainability indicators, ii) Describing the features of good and effective sustainability indicators, and iii) Presenting examples of sustainability indicators that illustrate a range of trade-offs associated with their use in practice. Before embarking on this task we briefly contextualize sustainability and begin with a definition of “sustainability” that will guide our discussion on the purpose and quality of indicators.

1.2 Components And Interpretations Of Sustainability

Sustainability is a word used broadly in scientific and policy spheres to describe conditions that do not damage the environment or degrade ecosystem services (Parris and Kates, 2003). Over the last twenty years, numerous researchers have discussed the problematic nature of the word sustainability used in this broad sense, highlighting important questions such as what exactly should be sustained and for whom, when, and why (Costanza and Patten, 1995; Parris and Kates, 2003; Marshall and Toffel, 2004). More specifically these authors ask: i) who decides what should be sustained? ii) over what time frame should it be sustained?, and iii) for what purpose?

Almost every article or book on sustainability expresses disappointment that the concept of sustainability lacks consensus. For example, Lynam and Herdt (1989) state that sustainability is ‘the capacity of a system to maintain output at a level approximately equal to or a greater than its historical average, with the approximation determined by the historical level of variability’. Pearce and Turner (1990) claim that sustainability means ‘maximizing the net benefits of economic development, subject to maintaining the services and quality of natural resources over time’. More recently, Hak et al. (2007) defined sustainability as ‘the capacity of any system or process to maintain itself indefinitely’.

Coupled with the word development, however, the term sustainability provides a slightly clearer normative and anthropocentric goal of how to use resources. Using Arrow et al. (2012)’s definition: sustainable development is development that sustains, i.e. does not decrease, the wellbeing of the current generation as well as the potential wellbeing of all future generations. This definition helps clarify the ‘who, when, and why’ of sustainability. It also provides policy goals that are slightly more ambitious than just simply not ‘compromising the ability of future generations to meet their own needs’ (Bruntland, 1987), by specifying that policies intended to promote development should leave future generations with ‘as many opportunities as we ourselves have had, if not more’ (Serageldin, 1996).

The concept of wellbeing encompasses individuals’ capacity to achieve happiness, harmony, identity, fulfillment, self-respect, self-realization, community, transcendence, and enlightenment (Meadows, 1998). It involves access to security, health, material needs, good social relations, and freedom of choice (MEA, 2005). It is inherently relational, and takes into account equity, sufficiency, and quality (Meadows, 1998). To ensure non-decreasing intergenerational wellbeing it is necessary to maintain the assets and stocks that provide the goods and services essential to wellbeing (Arrow et al., 2012). Managing a stock to provide the continued satisfaction of our wants and needs inherently involves protecting the throughputs that replenish that stock (Daly, 1991).

We can divide the assets that must be maintained into five major categories:

• –   Natural capital is the quantity and quality of environmentally provided assets (such as soil, atmosphere, forests, water, wetlands, mineral resources, biogeochemical cycles, etc.) that provide a flow of useful goods or services (Serageldin, 1996). The “ecosystem services” provided by natural capital include provisioning of food, water, timber, and fiber; regulating climate, floods, disease, wastes, and water quality; culturally related recreational, aesthetic, and spiritual benefits; as well as soil formation, photosynthesis, and nutrient cycling processes that support other natural capital services (MEA, 2005). Natural capital can also be perceived as the ultimate, non-substitutable stock underlying all other capital stocks (Daly, 1991; Meadows, 1998). Humans can build a water filtration plant to provide the same services as a forest, but we cannot create water out of nothing.
• –   Human capital is the quantity of the human population (size, age structure and geographic distribution), and the quality (health and capability) of that population (Serageldin, 1996).
• –   Knowledge capital includes collective public awareness of how and why things are as they are (formal scientific knowledge) as well as how to fulfill human purposes in a specifiable and reproducible way (experiential technological and managerial knowledge) (Brooks, 1980; Raymond et al., 2010). The components of human and knowledge capital defined here are often combined under the heading of human capital.
• –   Social capital encompasses norms and institutions and emerges from interactions between people or between people and organizations or the market. Institutions include official policies as well as informal rules, while norms include expectations about behavior, such as reciprocity and trust (Ostrom, 1986; Roseland, 2000; Ostrom, 2009).
• –   Manufactured capital is the quantity and quality of physical stock that is created by humans, to provide goods and services, such as roads, houses, machinery, cars, and medicine (Serageldin, 1996).

The economy is in a “steady state” when natural, human, and manufactured capital are non-decreasing (Daly, 1991). Development is not sustainable when wealth, measured as the sum of all assets, weighted by their marginal contribution to wellbeing, is decreasing (Arrow et al., 2012). An economy that is “developing” is one in which natural, human, and manufactured stocks are non-decreasing, while social and knowledge capital are increasing (Daly, 1991), so long as increases in social and knowledge capital are contributing positively to human wellbeing.

In the selection of relevant indicators of sustainability it is important to note that some assets are substitutes, some are complements, some are both (Serageldin, 1996). Manufactured capital is undoubtedly the most substitutable stock since we create this capital from other asset groups, predominantly natural (energy), human capital (labor), and knowledge (technology). Natural capital is perhaps the least substitutable of all assets. Not only is it impossible to replace the natural capital that provides services that are directly essential to our wellbeing, such as healthy food, clean water, and clean air, but it is also impossible to replace the underlying ecosystems services that support the natural capital that provides these essential services (MEA, 2005). For example, a fishery policy that contributes to sustainable development would not only restrict harvesting, but also would protect the marine ecosystem of that fishery from damage that might harm the fish populations capacity to reproduce.

According to the capital asset theory, instantaneous and intergenerational wellbeing will move in the same direction when the economy is in a steady state (Arrow et al., 2012). For more discussion on intergenerational relations and wellbeing see chapter 2. It is also assumed, implicitly, that increases in all assets will be distributed equally. In reality it is quite likely that the total asset base for a country could stay constant while the distribution between individuals within that country changes substantially. It is even possible that some people could see their access to certain assets decreasing even as the total asset base increased. In this case, it becomes less clear that the total wellbeing of the country would be constant. Thus, distribution of assets also matters in the selection of sustainability indicators and evaluations of sustainable development (Valentin and Spangenberg, 2000).

While we have focused on a wealth-based definition of sustainability, it is worth noting that not all uses of sustainability indicators need focus on wealth accounting approaches. It may be equally functional, and less redundant to focus the study of sustainability on specific sectors and regions and to select clear indicators within these sectors and regions that can measure a clear deviation from sustainable pathways within the larger context of sustainable development (Kaufmann and Cleveland, 1995).

1.3 Why Do We Need Sustainability Indicators?

Indicators serve two major roles in the field of sustainability science. First, the selection of good sustainability indicators (or metrics) can help clarify causal relationships between specific capital assets and intergenerational wellbeing, improving knowledge about social-ecological systems as an end in and of itself. Second, the creation of good sustainability indicators can greatly aid policy and management decision-making. These roles are highly interconnected since the proper identification of causal relationships between capital assets and wellbeing in social-ecological systems can help elucidate trade-offs in wellbeing from enhancing or depleting different capital stocks.

Sustainability indicators can be drawn from a wide range of economic, social or environmental sources (Hak et al., 2009) and may contribute to all five stages of policy analysis: i) Clarifying goals, ii) Describing trends, iii) Analyzing conditions, iv) Projecting developments, and v) Inventing, evaluating, and selecting alternatives, so long as they are concise and easy to interpret (Clark, 2002). Nevertheless, there is a variety of challenges associated with selecting and using sustainability indicators. Some of these challenges mimic the definitional ambiguities of sustainability itself, such as what is the right time scale over which to collect or apply indicators and who should select these indicators. Sometimes the ‘right’ indicators are used in the ‘wrong’ context, a situation described frequently throughout the chapters of this book.

The selection of indicators is inherently driven by values about the who, when, and why questions outlined above; values that can differ substantially across stakeholders (Meadows, 1998). The selection of indicators is also influenced by conceptual understanding of the connections between the stocks to be sustained and human wellbeing. Therefore, negotiating indicators within a group early on in the policy evaluation process is particularly important for clarifying conceptual frameworks and goals across groups with differing scientific backgrounds and values. One major conceptual difference that will likely influence the selection of indicators is whether stakeholders believe that all capital groups are substitutable (Getzner, 1999).

Sustainability indicators are useful in describing trends when they capture variation in both time and space about changes in the quantity or quality of capital assets and human wellbeing. In that respect, sustainability indicators provide a measure of the effectiveness of actions and policies at moving a system towards a more sustainable state (McCool and Stankey, 2004). Complementary to evaluating the magnitude of a stock, an indicator can also be designed to measure the rate of change in that stock (Bossel, 1999). Demonstrating rates of change may aid understanding of the system dynamics (and most of the systems that indicators assess are dynamic ones).

Indicators may also be selected to estimate future changes. This is especially relevant given that social-ecological systems tend to be characterized by temporal and spatial delays and nonlinear dynamics (see also chapter 2). Many complex natural resource systems also present delays between the occurrence of an event (such as a policy initiative or project intervention) and the effect, which leads to both advantages and disadvantages. For instance, long delays between actions and the result make it more difficult to draw cause-effect connections. Indicators that can offer insights to future threatening conditions (such as the size of the ozone layer over Antartica) can provide important lead time during which mitigation policy interventions can be proposed and initiated.

Along these lines, sustainability indicators are now increasingly used to perform project impact assessments (Agol et al., 2014). Project impact assessments focus on the effects, rather than project management and delivery, and typically occur after project completion. Project impact assessments, if performed adequately, may provide useful information to project executors, funders, and the target community to monitor and evaluate the effects of their actions towards sustainability. Sustainability indicators may also be incorporated into assessments that evaluate the potential impact of a project before it is funded to assess which projects are likely to lead to the largest overall improvement in intergenerational wellbeing.

Indicators can also be used for strategic environmental assessment. Donnelly et al. (2007) showed an interesting approach to evaluate performance of indicators for strategic environmental assessment during a workshop gathering a multidisciplinary team to incorporate differing viewpoints and to ensure less bias in the decision-making process. The indicators included biodiversity (e.g. number of sites with habitat enhancement), air (number of exceedances of air quality limits), water (minimize culverting of watercourses) and climatic (insurance claims due to flooding) indicators. Although the degree to which those indicators were able to show trends and provide early warning mechanisms varied, most of the indicators were found to be policy relevant, cover a range of environmental receptors, were adaptable and understandable (Donnelly et al., 2007). The following section of this chapter extends the discussion on features of a good indicator identified in literature.

1.4 What Characterizes ‘Good’ And ‘Effective’ Sustainability Indicators?

It is impossible to definitively categorize individual indicators as good or effective in all settings; some indicators might be useful at certain times and scales, but not useful in others. Furthermore, the definitions of good and effective are highly subjective. Nevertheless it is still possible to highlight some of the features that indicators should have if they are going to improve scientific understanding of complex systems and the selection of policies for sustainable development.

Generally speaking, indicators of sustainable development must capture information about the quantity and quality of the underlying asset base that is to be sustained for the ultimate goal of ensuring human wellbeing (Meadows, 1998). Good sustainability indicators should also assess whether the relative contributions of different assets to wellbeing are changing over time. Since the effectiveness of an indicator in sufficiently capturing this information may change over time as the context of the system changes, it is necessary to continually monitor, review and evaluate selected indicators over time (Ramos and Caeiro, 2010).

More specifically, indicators should be simple, measurable, feasible, flexible, dynamic, and user-inspired.

• –   Simple: easily communicated. Reducing the volume and complexity of information is often required by decision makers (Donnelly et al., 2007). While the use of simple indicators may sometimes be perceived as a reductionist approach to sustainability science, this critique is really only valid if these indicators are ultimately used in isolation. Simple indicators can be used in complex combinations that capture much more information about the system.
• –   Measurable: capable of being quantified.
• –   Feasible: able to be collected (Bell and Morse, 2008). This is a slightly different requirement than being measurable, since something can technically be measured, but collection would require time and money beyond the capacity of the organizations or individuals involved.
• –   Flexible: to allow replacing with new available data (Ramos and Caeiro, 2010).
• –   Dynamic: capturing changes in stocks and flows over time. This is necessary to capture trends, but also non-linearities and causal processes within a system. Sustainability intrinsically involves the maintenance or continuity of outcomes over time. Any indicator that just looks at the present flows, without talking about the future, and thresholds or changes in the stocks that produce those flows is not really capturing intergenerational wellbeing (Merkle and Kaupenjohann, 2000).
• –   User-inspired: indicator properties should align with the goals of its users and be co-produced by these users when possible (Mitchell, 2006). Do the users care about diagnosing progress toward sustainable development, communicating progress, or assessing cause and effect within a system?

Spangenberg (2002) also proposes that indicators should be: i) general, i.e. not dependent on a specific situation, culture or society; ii) indicative, i.e. truly representative of the phenomenon they are intended to characterize; iii) sensitive, i.e. they have to react early and sensibly to changes in what they are monitoring, in order to permit monitoring of trends or the successes of policies, and iv) robust, i.e. directionally safe with no significant changes in case of minor changes in the methodology or improvements in the data base. There is also extensive discussion on validity of indicators to guarantee their credibility (Bockstaller and Girardin, 2003).

Indicators are not objective and, in fact, they do not need to be (as long as they are adequate and reflect assumptions behind sustainability). Indicators based on numbers are however usually considered more valuable and reliable than qualitative assessments, and they can be more easily communicated and validated. As Meadows (1998) notes however paying attention to only what is measurable is itself a subjective choice.

Unfortunately, some of the characteristics of ‘good’ indicators outlined above may present contradictory goals. For example, indicators that are easy to measure directly and easy to communicate may not adequately reflect complexity (Agol et al., 2014). Indicators that are dynamic (capture changes over time), might be infeasible given money and time limitations. The use of secondary data aggregated to the higher levels may allow for the feasible capture of dynamic indicators, enabling sophisticated modeling that captures complexity, interactions and feedbacks over a long term (e.g. Dizdaroglu and Yigitcanlar, 2014). Yet, these data may not reflect the intricacy of real-world factors at a more fine scale (e.g. individual household). Complex and rigorous indicators are rarely replicable (their appropriate application requires time, financial resources and often skilled staff to gather data and perform modeling).

The ‘Ecological Footprint’ indicator provides a good example of these tradeoffs. The Ecological Footprint measures environmental impact by the amount of land that a person, city, industry or a country requires for its maintenance (Rees, 1992). It converts the flows of energy and matter used to produce an item into corresponding quantities of land and water required to support these flows, expressed in area units. It captures many useful ideas within one number to express sustainability, however it requires considerable scientific review to codify its calculation (consumption of biomass, energy, water and other resources are converted into a normalized measure of land area). Researchers have used this indicator to demonstrate that current consumption practices are not sustainable and to argue that major transformative changes in the global economy are necessary to reduce society’s collective ecological footprint (Hoekstra and Wiedman, 2014). However others (Van Den Berg and Grazi, 2013) have argued that the Ecological Footprint is simultaneously too complex and too simple since it involves large-scale analysis of energy and matter flows across whole nations, yet focuses on only two inputs (total land and water), thereby ignoring toxic substances, noise pollution, and fragmentation of ecosystems. Furthermore it has been argued that the Ecological Footprint indicator does not provide information about the linkages between institutions, technologies, and ecological outcomes, so it cannot contribute to better understanding of what policy interventions might be undertaken to reduce footprints (Van Den Berg and Grazi, 2013).

In sum, it is more useful to think of the tradeoffs between different indicators, rather than attempting to address all features of ‘good indicators’ simultaneously. Therefore, the goals and tradeoffs among different indicators should be discussed explicitly among stakeholders. Explicit consideration and discussion among stakeholders of tradeoffs of different indicators, and the definitions and objectives of sustainability themselves, can enhance the potential utilization of such indicators (Binder et al., 2010). No less important are normative decisions about how to weight indicators, which should also be explicitly discussed (Binder et al., 2010). Ultimately a matrix of indicators sorted under different types of competing objectives can help overcome the limitations of single approaches and promote policy analysis of tradeoffs (Palm et al., 2013). Additional discussion on these tradeoffs can be found in literature (e.g. Utne, 2007) as well as in this book (chapter 6: Sustaining Local Livelihoods through Coastal Fisheries in Kenya).

1.5 Conclusions

Sustainability indicators help us understand whether or not the capital assets on which intergenerational wellbeing depend are decreasing in quantity or quality over time (Daly, 1991). They can also tell us whether the marginal contributions of these stocks to wellbeing are changing over time. Indicators are only partial reflections of reality, based on imperfect models loaded with uncertainty (Meadows, 1998), yet they are still necessary for policy evaluation. The world is too complex to make decisions without some level of simplification to direct us to the right decisions. Despite discrepancies in definitions and interpretations, as present in many other scientific areas, we can learn from sustainability indicators use (and misuse) in practice to improve the assessment process. The following chapters will illustrate many more examples of sustainability indicators from many different sectors and scales.

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