9Original scientific paper Economics of Agriculture 1/2013
UDC: 005.121:502
THE INDEXING APPROACH IN MEASURING OF SUSTAINABLE SOCIETY1
Radojica Saric2, Marko Jelocnik3, Vesna Popovic4
Summary
Sustainable society is a society that has ability to maintain a balance between economic, social and ecological processes, or states, over the time period, in order to meet, as current as well as future needs of the population. This is a complex and multidisciplinary concept, which requires establishment of appropriate indexes for measuring of a society sustainability level. Sustainable Society Index (SSI) is considered as one of the most recognized indexes for measuring the sustainability level of a society. In the paper is presented the model of Sustainable Society Index by defining its basic characteristics and trends, parallely with quantitative-comparative analysis of the SSI value at the global level as well as at the level of the Republic ofSerbia and neighbouring countries.
Key words: sustainability, Sustainable Society Index, quantitative-comparative analysis, Serbia
JEL: QO1
1 This paper is a part of research in the project „Sustainable agriculture and rural development in the function of accomplishing strategic objectives of the Republic of Serbia in the Danube region", No. 46006, financed by the Ministry of Education, Science and Technological Development of the Republic of Serbia.
2 Radojica Saric, Master's degree in Economics, Ph.D. candidate at the Faculty of Economics, University of Belgrade, Research Assistant at the Institute of Agricultural Economics, Volgina Street no. 15, 11060 Belgrade, Serbia, Phone: +381 (0) 11 6972 842, E-mail: saricradojica@gmail.com
3 Marko Jelocnik, Master's degree in Agro-Economics, Ph.D. candidate at the Faculty of Agriculture, University of Novi Sad, Research Assistant at the Institute of Agricultural Economics, Volgina Street no. 15, 11060 Belgrade, Serbia, Phone: +381 (0) 11 6972 852, E-mail: marko_j@iep.bg.ac.rs
4 Vesna Popovic, Ph.D. in Economics, Senior Research Associate at the Institute of Agricultural Economics, Volgina Street no. 15, 11060 Belgrade, Serbia, Phone: +381 (0) 11 6972 854, E-mail: vesna_p@iep.bg.ac.rs
Introduction
Sustainable society is a society that its development aligns with the basic principles and requirements of sustainable development. Respectively, sustainable society provides a balance between economic growth, social justice and healthy environment (Figure 1), as it's going to meet the current needs, without diminishing the chances for satisfaction of future needs of the population. In other words, sustainable society (Sustainable Society Foundation, 2010, pp. 1) is society:
1) That meets the needs of the present generation;
2) That does not compromise the ability of future generations to meet their own needs;
3) In which each human being has the opportunity to develop itself in freedom, within a well-balanced society and in harmony with its surroundings.
Figure 1. Sustainable Society - balance between Economic Growth, Social Justice and Healthy Environment
Source: Available at http://plopws.sfsu.edu/sustainability/about.html and http://uncw.edu/ campuslife/services/Sustainability.html (accessed on February 5, 2013).
Sustainable society is a society that exists within self-maintaining borders of its surrounding, or society that recognizes its growth limits and looks for alternative ways to grow (Coomer, 1979). Establishment or achieving of sustainable society as an alternative developmental model has a great importance, because it represents an opportunity for creative evolution (Chen, 2007). This means that education is one of key elements for the society development towards the concept of sustainability. At the same time, local communities are very important element in the development of society regarding to sustainability, as they are its integral part. Every society that is made of developed communities (which are sustainable too) can significantly prosper in short time horizon (Saric et al, 2011).
Also, there is a need for defining of appropriate strategic framework with basic guidelines and principles, which will initiate moving of one society towards sustainability. It was
Susi Soci
established nine basic principles of sustainable society that are mutually interconnected, complementary and supportive (IUCN, UNEP, WWF, 1991):5
1. Respect and care for the community of life;
2. Improve the quality of human life;
3. Conserve the Earth's vitality and diversity;
4. Minimize the depletion of non-renewable resources;
5. Keep within the earth's carrying capacity;
6. Change personal attitudes and practices;
7. Enable communities to care for their own environments;
8. Provide a national framework for integrating development and conservation;
9. Create a global alliance.
Sustainable society strives to promote economic success, respect social needs and protect the environment. Consequently, it can be said that it covers economic, social and environmental dimension of development. The economic aspect of sustainable society considers self-sustained economic growth and development. The social aspect of sustainable society implies a fair services distribution in all fields of life. The ecological aspect of sustainable society implies the ability of natural resources maintaining on stable level, together with biodiversity preservation.
So, consideration of sustainable society issues requires multidisciplinary approach. Also, it implicitly suggests the necessity of strategically oriented long-term vision establishment, in order to timely predict different developmental consequences that arise from mutually interlaced and conflicting economic, social and environmental goals, so on that way prevent potentially destructive disharmony of future development. Since the concept of sustainable society as a complex phenomenon integrates itself three mutually interweaved developmental aspects - economic, social and environmental, the real question will be measuring of sustainability level of a society. For this purpose, various indexes have been developed, which facilitate the assessment of sustainability of society development.
Model of Sustainable Society Index
Existing economic indicators, such as GDP, solely rely on economic growth and measurement of the state of economy of certain country in defined period (European Commission, 2009), with neglecting of social and environmental aspects of development. In other words, GDP isn't an adequate tool for measuring of some country overall well-being, or the level of progress toward a sustainable society. According to this, during the last few decades the phenomenon of measuring of sustainability has been increasingly attracted the attention of international experts. So on global level comes to rapid development and expansion of the establishment
5 Principles of a Sustainable Society, Caring for the Earth: A Strategy for Sustainable Living, available at: www.globallearningnj.org/global_ata/principles_of_a_sustainable_society.htm (accessed on February 7, 2013)
of different indexes for measuring of sustainability that are in position to simultaneously perceive several developmental aspects (not only the economic aspect), thereby they can be used in different areas of development.
Generally, the index is a statistical indicator that provides appropriate quantified information, and which in same time simplifies the analysis process of the studied phenomenon. Development of certain index for measuring of sustainability level primarily requires determination of appropriate theoretical framework for the analysis of researched phenomenon. Mentioned approach is of great importance regarding to more correct selection of parameters that will determine the index, in other words how further steps will not endanger the quality of gained results and conclusions that are based on the index value. Most of indexes for measuring of sustainability level usually represent collective indicators, which paralelly covers many different areas. Also, by the indexes for measuring of sustainability can be done ranking of the group of countries regarding to achieved referent values (Parris, Kates, 2003), as well as they can be integral parts of the mechanism that enables establishment and implementation of adequate strategically oriented developmental policy. In this sense, it is necessary to define the general (critical) conditions for programming of strategic development (Njegovan, 2008). Their main characteristic is ability to bring down the complex structures to a very simple measure, as well as its' contribution to better understanding of the concept of sustainable development during the various comparative analyzes.
In 1974 was established Sustainable National Income, as a first index for measuring of sustainability. Of course, one of the most known indexes for measuring of sustainability is Sustainable Society Index (SSI), established in 2006 by the Sustainable Society Foundation, but that was in some extent redesigned and improved in 2010 (Figure 2).
Figure 2. Development of indexes for measuring of sustainability
SNI - Sustainable National Income
Ji
ij SSI — evaluated and redesigned ü Ibrahim Index of African Governance O CDI - Commitment to Development Index Q EPI - Environmental Performance Index Q HPI - Happy Planet Index 9 SSI - Sustainable Society Index ö MDI — Millennium Development Indicators Q ESI - Environmental Sustainability Index (J WoN - Wellbeing of Nations Index Q GS - Genuine Savings Q DJSI - Dow Jones Sustainability Indexes Q GPI - Genuine Progress Indicator Q IEWB - Index of Economic Well-Being 9Ef - Ecological Footprint 9 HDI — Human Development Index 9 ISEW - Index for Sustainable Economic Welfare
_\2010
Ji
£
_L2
Source: Available at http://www.ssfindex.com/sustainability/timeline/ (accessed on February 10, 2013).
Sustainable Society Index is a complex index designed to wider professional audience, primarily during the process of review of achieved level of sustainability of certain society (Van de Kerk, Manuel, 2007). This indicator can be used like an instrument for the management of overall sustainable development, as by the creators of developmental policies, as well as by the economic entities, educational institutions, nongovernmental sector and interested persons.
Sustainable Society Index includes, or synthesizes 3 basic dimensions through 8 categories and 21 indicators of society sustainability (Figure 3). As main dimensions of sustainability
(mutualy interconnected) are recognized:
1) Human Wellbeing (includes 3 categories and 10 indicators);
2) Environmental Wellbeing (covers 3 categories and 6 indicators);
3) Economic Wellbeing (involves 2 categories and 5 indicators).
Figure 3. Model of Sustainable Society Index - basic dimensions, categories and indicators
Source: Saisana, M., Philippas, D. (2012): Sustainable Society Index (SSI): Taking societies' pulse along social, environmental and economic issues, JRC Scientific and Policy Reports, European Commission, pp. 17.
Methodology of Sustainable Society Index establishment consists of 5 steps (Saisana, Philippas, 2012, pp. 20):
• Step 1. Raw data for the selected indicators are firstly checked for reporting errors and for outliers that could strongly bias the results are treated;
• Step 2. Missing data are estimated using expert knowledge;
• Step 3. Indicators are normalized by the min-max method, taking the direction of their effect into account;
• Step 4. Equal weights are assigned to the indicators within categories and within the Wellbeing dimensions;
• Step 5. Country scores on the eight SSI categories are calculated as simple geometric averages of the underlying normalized indicators. Country scores on the three SSI Wellbeing dimensions are also calculated as simple geometric averages of the underlying categories.
The main characteristic of mentioned index is a conceptual and statistical coherence that allows a simple measuring of achieved level of sustainability of certain society in the world. It integrates three forms of sustainable Wellbeing, based on next assumptions:
1) Human Wellbeing without Environmental Wellbeing leads to self-destructive developmental collapse without any perspective;
2) Environmental Wellbeing without Human Wellbeing makes senseless any progress;
3) Economic Wellbeing is not a goal in itself, but a mean for achieving of Human Wellbeing and Environmental Wellbeing, in other words overall sustainability of 3 constitutive dimensions of Wellbeing, that have to be achieved during the time.
Generally, Sustainable Society Index is used as instrument for guidance of developmental process towards sustainability. Index integrates the most important aspects of sustainability and quality of life of a national society in a simple and transparent way.6 Based on this index can be perceived achieved level of sustainability of selected society for any of three dimensions of Wellbeing.1 Index is calculated for 151 countries in the world, whereby it is measured a distance level from sustainability for each society within observed countries. After calculation index takes a value (each dimension, category and indicator that integrate the index) in a range from 0 to 10. As the value is closer to 10, the level of sustainability is higher, and vice versa.
Global Sustainable Society Index Analysis
In 2012 the average value of Sustainable Society Index for 151 countries was 4.14, based on which can be concluded that the world as a whole is still far from the true
6 Sustainable Society Index (2009), available at: www.eoearth.org/article/ Sustainable_Society_
Index (accessed on February 11, 2013)
1 Check the level of well-being and sustainability for your country (2012), available at: http:// theblogprogress.blogspot.com/2012/11/check-level-of-well-being-and.html (accessed on February 12, 2013)
sustainability (Van de Kerk, Manuel, 2012), in other words, the world has not yet crossed even the half way towards a sustainable society (Graph 1).
Graph 1. SSI-2012: Human, Environmental and Economic Wellbeing, together with Wellbeing dimensions and SSI progress (period 2006-2012)
Source: Authors' visual modification according to www.ssfindex.com/results-2012/world-totals/ (accessed on February 12, 2013).
By observation of each individual dimension of Wellbeing, it can be concluded that the best result was achieved within dimension of Human Wellbeing (6.2), and the worst within dimension of Economic Wellbeing (3.8). After analysis of basic dimensions of Sustainable Society Index in the period 2006-2012, following can be concluded:
1) The greatest progress was achieved within the dimension of Human Wellbeing, around 5.9%, whereby this dimension during the observed period had a constant upward trend;
2) The least progress was realized within the dimension of Economic Wellbeing, about 2.6%, in other words twice less than at Human Wellbeing. This is a dimension with very unstable trend;
3) Decline of around 1.4% was achieved within the dimension of Environmental Wellbeing. This dimension was in mentioned period in constant, but slight fall, what can bring a certain dose of solicitude.
Observing a trend of the Sustainable Society Index in the period 2006-2012, it can be concluded that the sustainability of society on global level was increased for only 2.8%,
what is assessed as extremely small progress towards the achievement of a sustainable society. Despite all, encouraging is a fact that existed upward trend in mentioned period.If the present growth dynamics of SSI will continue in coming years, reaching of sustainable society on global level will be out of sight.
Indicators which determine the categories (in total 21), as well as the basic dimensions of Sustainable Society Index can be represented graphically using the appropriate diagram. The end points in the diagram indicate a greater contribution of the observed indicator to a sustainable society, while the points closer to centre indicate proportionally smaller contribution of observed indicator to sustainable society (Graph 2).
Graph 2. SSI-2012: Indicators scores and progress within the period 2006-2012
Source: Available at www.ssfindex.com/iesults-2012/world-totals/ (accessed on Februaiy 12, 2013).
After analysis of the diagram with sustainable society indicators in 2012, it can be concluded that the Sufficient Food and Sufficient Drink contribute the most to a sustainable society in the world. After them come the Genuine Savings, Renewable Water Resources and Education. Indicators that had the smallest contribution to a sustainable society in the world were the Organic Farming, Renewable Energy, Air Quality, Gross Domestic Product and Good Governance. Indicator with the fastest growth in the period 2006-2012 was the Gross Domestic Product (GDP). However, the problem is that a significant increase of GDP obviously was not used in the function of progress towards sustainability.
During the observed period the smallest progress was achieved at the indicators ofBiodiversity and Air Quality, while the indicator Employment and Greenhouse Gases was the most regressed. Generally, from 21 indicators progress was achieved at 13, one did not undergo changes, while the decline was made at 7 indicators. Therefore, excluding the status quo at one indicator, it can be concluded that in the period 2006-2012 achieved overall progress of indicators toward a sustainable society was around 62%, where dominant role had indicators within the dimension of Human Wellbeing, but dimension of Economic Wellbeing too. The
concerning circumstance is that indicators within the dimension of Environmental Wellbeing have not made a progress in observed period, even they have regressed in great portion, affecting the overall sustainability of the global society.
Analysis of Sustainable Society Index in Serbia
Of great importance will be reconsideration of the progress toward a sustainable society from the standpoint of the Republic of Serbia, as one of the representatives of developing countries. Realized value of the Sustainable Society Index for Serbia is below the global level (Table 1).
Table 1. Sustainable Society Index: basic dimensions and change for Serbia, border countries and world (2006-2012)
C o u n t r y Human Wellbeing Environmental Wellbeing Economic Wellbeing Sustainable Society Index - SSI Index of sustainable change
2006 2012 2006 2012 2006 2012 2006 2012 2006-2012
Serbia 7.10 7.81 3.65 3.73 2.77 2.61 4.35 4.50 103.4
Montenegro 7.09 7.85 5.38 5.37 4.07 3.61 5.67 5.60 98.8
Macedonia 7.02 6.88 3.33 3.51 3.08 5.04 4.31 4.94 114.6
Bosnia and Herzegovina 7.46 7.57 2.76 2.59 2.78 2.72 4.01 3.92 97.8
Croatia 7.76 8.07 3.82 3.86 4.23 5.46 5.06 5.55 109.7
Hungary 8.46 8.66 5.38 3.48 5.44 4.73 5.56 5.29 95.1
Romania 6.71 7.37 3.53 3.99 4.83 5.66 4.79 5.48 114.4
Bulgaria 7.85 8.14 3.61 3.41 3.99 4.74 4.90 5.13 104.7
WORLD 5.9 6.2 4.6 4.5 3.7 3.8 4.6 4.7 102.1
Source: According to data available at www.ssfindex.com/cms/wp-content/uploads/ Datatables_2006-2008-2010-2012.xls (accessed on February 15, 2013) and authors' calculations of
Index of sustainable change.
After analysis of the Sustainable Society Index value in 2012 compared to 2006 it can be noticed its slight variations, where they are most expressed at Macedonia, Romania and Croatia (Graph 3).
Graph 3. SSI trend for Serbia, border countries and world (2006-2012)
Source: According to data from Table 1.
Aforementioned countries succeed to significantly increase the value of the analysed Index in 2012, in compare to 2006, and thus more contribute to improvement of the sustainability of society. This statement is confirmed by the height of calculated Index of sustainable change, which in Macedonia is 14.6%, in Romania, 14.4% and Croatia, 9.7%. Value of the Index of sustainable change in 2012 compared to 2006 in Serbia is 3.4%. Countries in Serbia's neighbour, which had a negative trend (unsustainable change) in observed period are Hungary (-4.9%), Bosnia and Herzegovina (-2.2%) and Montenegro (-1.2%) (Graph 4).
Graph 4. Index of sustainable change for Serbia, border countries and world (2006-2012)
Source: According to data from Table 1.
Having in mind collective contribution of basic dimensions that determine the Sustainable Society Index, Serbia in 2012 achieved results, actual on global level in 2006. Also, besides Bosnia and Herzegovina, Serbia is a country in which all three dimensions, integrally contribute at least to sustainable society, as in 2006, as well as in 2012. Dimension that distinguishes the most in that contribution is the Human Wellbeing, followed by the Environmental and Economic Wellbeing. Such a dispersion of contributions of main SSI dimensions was characterized in observed years both at the global level, as in the most of the analysed countries.
Country where in 2012, compared to 2006, was recorded the largest decrease in collective contribution of basic dimensions of the SSI is Hungary, primarily caused by reduction of the Environmental, as well as Economic Wellbeing. On the other hand, Macedonia is the country where was achieved the largest increase in collective contribution of the basic SSI dimensions, primarily due to increase of the Economic Wellbeing. Based on the comparison of the collective contributions of Sustainable Society Index basic dimensions can be noticed that in 2012, compared to 2006, was made certain progress in terms of balanced progress of SSI achieving, through increase of, mostly Economic Wellbeing, what led to reduction of current gap between some countries. Certainly, according to this the countries that are still very behind are Bosnia and Herzegovina and Serbia (Graph 5).
Graph 5. Collective contribution of main dimensions of the Sustainable Society Index to sustainable society: Serbia, border countris and world (2006, 2012)
■ Human Well being 2006 ■ Lnviron ment a I Wellbeing 2006 I Lconomic Wellbeing 2006
■ Human Wpllheing 2012 ■ Environmental Welltteing 2012 I F rnnomic WellhRing 2012
Source: According to data from Table 1.
Analysing the categories within the basic dimensions of the Sustainable Society Index, in all observed countries as the most important category appears Basic Needs, which is part of a dimension Human Wellbeing. In other words, this category had the biggest influence on the achievement of a sustainable society in certain country in 2012. According to significance, in most countries (Bosnia and Herzegovina, Croatia, Hungary, Romania and Bulgaria) it is followed by category the Health, while in Serbia and Montenegro as next category by the significance appears the Natural Resources (Graph 6).
Graph 6. Categories within the main dimensions of the Sustainable Society Index (2012)
Source: According to data available at www.ssfindex.com/cms/wp-content/uploads/ Datatables_2006-2008-2010-2012.xls (accessed on February 15, 2013).
It is interesting that in Serbia as a category with the lowest relevance for achieving of sustainable society appears the Transition, while this category in Macedonia by its impact is on second place. Also, in most of analysed countries, one of the categories with the smallest impact is the Climate and Energy, what can be characterized as a low level of social awareness towards to the importance of climate changes and energy efficiency.
Conclusion
Historical development of indexes for measuring of sustainability of certain society has invaluable importance. This primarily relates to developing countries, as indexes for measuring of sustainability contribute to establishment of strategically determined platform that enables the developmental integrality of society in terms of greater respect of economic, social and environmental aspects of development. For any society, in long-term, pursuit of achieving sustainability should be based on continuous improvement and dispersivity of developmental policies, which would adequately implement sustainable plans within the different economy sectors. Based on the analysis of Sustainable Society Index, for the period 2006-2012, it is concluded that the society at the global level is still far from the idea of sustainability. Although, existence of upward trend of observed Index is encouraging, unfortunately without acceleration of expressly slow dynamics of its growth in coming years can not be expected achievement of full capacity of sustainability by the global society.
Also, by the analysis of same indicator at level of Serbia and neighboring countries, it is concluded that Serbia achieved one of the lowest values of Sustainable Society Index. It
is one of the countries where all three basic dimensions of Index integrally contributed at least to a sustainable society in both analyzed years, therewith there are some indications of sustained changes of the Index that are still insufficient from an aspect of future progress. Dimension with the largest contribution to a sustainable society in Serbia is Human Wellbeing. Among categories in same position are Basic Needs within the dimension Human Wellbeing and Natural Resources within the dimension Environmental Wellbeing. Category Transition within the dimension Economic Wellbeing has the least importance according to its impact on the achievement of sustainable society in Serbia. Based on aforementioned it can be concluded that the current transitional changes in the form of economic system reforms did not have a significant impact on the achievement of present level of sustainable society in Serbia, what has to be changed in near future.
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INDEKSNI PRISTUP U MERENJU ODRZIVOG DRUSTVA
Radojica Saric8, Marko Jelocnik9, Vesna Popovic10 Sazetak
Odrzivo drustvo je drustvo koje ima sposobnost odrzavanja balansa izmedu ekonomskih, socijalnih i ekoloskih procesa, ili stanja tokom vremena, s ciljem da se zadovolje kako sadasnje, tako i buduce potrebe stanovnistva. Recje o kompleksnom i multidisciplinarnom konceptu koji nalaze kreiranje odgovarajucih indeksa za merenje nivoa odrzivosti drustva. Jedan od najpoznatijih je indeks odrzivog drustva. U radu se razmatra model indeksa odrzivog drustva kroz definisanje njegovih osnovnih karakteristika i trendova, i sprovodi kvantitativno-komparativna analiza vrednosti ovog pokazatelja na globalnom nivou i na nivou Srbije i susednih zemalja.
Kljucne reci: odrzivost, indeks odrzivog drustva, kvantitativno-komparativna analiza, Srbija
8 Radojica Saric, master ekonomista, doktorant na Ekonomskom fakultetu u Beogradu, istrazivac saradnik u Institutu za ekonomiku poljoprivrede, Volgina 15, 11060 Beograd, Srbija, telefon: +381 (0) 11 6972 842, e-mail: saricradojica@gmail.com
9 Marko Jelocnik, M.A., doktorant na Poljoprivrednom fakultetu u Novom Sadu, istrazivac saradnik u Institutu za ekonomiku poljoprivrede, Volgina 15, 11060 Beograd, Srbija, telefon: +381 (0) 11 6972 852, e-mail: marko_j@iep.bg.ac.rs
10 Dr Vesna Popovic, visi naucni saradnik u Institutu za ekonomiku poljoprivrede, Volgina 15, 11060 Beograd, Srbija, telefon: +381 (0) 11 6972 854, e-mail: vesna_p@iep.bg.ac.rs
