The Edmonton 2008 Genuine Progress Indicator Report

Transcription

1 The Edmonton 2008 Genuine Progress Indicator Report The State of Economic, Social and Environmental Wellbeing for the City of Edmonton Prepared by: Mark Anielski Heather Johannessen November 11, 2009

2 The Edmonton 2008 GPI Report About Anielski Management Inc. For more information on Anielski Management s work, visit our website at or contact: Mark Anielski, President & CEO Avenue Edmonton, Alberta T6E 2T2 tel: anielski@telus.net About this Report The Edmonton Genuine Progress Indicators (GPI) Report for 2009 is the second consecutive assessment of the economic, social, health and environmental wellbeing conditions and trends for the City of Edmonton for the period 1981 to The first baseline Edmonton GPI study was conducted in The Edmonton GPI analysis is a replication of the 2001 Alberta GPI study by the Pembina Institute; the study developed a prototype sustainable well-being accounting system for Alberta using 50 indicators of wellbeing analyzed over a 40-year study period (1961 to 1999) to attempt to answer the question: is Alberta s economic development on a sustainable course with respect to the conditions of its human, social, natural, produced and financial capital? This Edmonton GPI report for 2009 tracks the current condition (for the year 2008) and trends ( ) in 48 indicators of Edmonton s economic, social and environmental wellbeing, providing a snapshot of Edmonton s overall state of wellbeing. Compared with the first 2008 GPI report, the 2009 report is slightly modified, with 3 indicators having been dropped and 1 an additional added. Thus the 2009 report is not directly comparable with the first 2008 report. The report examines the relationships between economic growth (measured in terms of gross domestic product (GDP)) and 47 other indicators of economic, social and environmental wellbeing. This provides the basis of answering important questions about how Edmonton s overall quality of life and wellbeing has changed over time relative to changes in economic conditions. This provides decision makers with a high-level overview of wellbeing of the city providing important context to policy and budgetary decisions and provides citizens with a high-level wellbeing profile. ANIELSKI Management Inc. 12/21/09 ii

3 The Edmonton 2008 GPI Report About the Authors Mark Anielski is President and CEO of his Edmonton-based and family-owned corporation, Anielski Management Inc. His firm specializes in measuring the wellbeing and sustainability of communities, corporations and nations. Mark is an economist who recently completed his first book titled The Economics of Happiness: Building Genuine Wealth. He has pioneered alternative measures of progress such as the Genuine Progress Indicator for Alberta and the US and has advised governments and communities all over the world on how to measure quality of life and sustainability. Heather Johannesen is the President of the Atlantic Institute for Sustainability. She is an ecological economist and sustainability practitioner. Heather She has extensive experience in climate change, energy and water security initiatives as well as developing indicators of progress, implementing best practices and devising educational tools for capacity strengthening. She has served as senior project manager on complex sustainability projects involving multi-level government agencies and private sector partnerships internationally and across North America. In addition to her private practice, Heather has served as an associate professor lecturing on corporate social responsibility, ecological economics and sustainability using systems thinking at the undergraduate and graduate level. ANIELSKI Management Inc. 12/21/09 iii

4 The Edmonton 2008 GPI Report Contents EXECUTIVE SUMMARY INTRODUCTION WHAT IS GENUINE WEALTH ACCOUNTING AND THE GPI?... 5 Caveats and Cautions THE EDMONTON WELLBEING INDEX RESULTS... 7 Individual Wellbeing Indicator Results City of Edmonton Wellbeing Index in Isolation GPI TRENDS AND RELATIONSHIPS WITH GDP Correlations Analysis between GPI Indicators and GDP What does this tell us? Trends in Genuine Progress Indicators Relative to Economic Growth (GDP) EDMONTON GDP AND WELLBEING INDEX FORECAST TO NEXT STEPS: GENUINE WEALTH ACCOUNTING SYSTEM? Informing Citizens About Quality of Life Using Genuine Wealth Accounting to Develop Public Policy APPENDIX 1: EDMONTON GPI RAW DATA List of Figures and Tables Figure 1: Edmonton GDP vs. Edmonton Wellbeing Index (48 indicators), Figure 2: GPI Economic, Social, Environmental Wellbeing Indices vs. GDP per capita Index, Figure 3: The Edmonton Wellbeing Index for Figure 4: Edmonton Wellbeing Index for 1998 (Worst Year) Figure 5: Edmonton Wellbeing Index 1983 (Best Year) Figure 6: Edmonton-only Wellbeing Index, Figure 7: Economic Diversity Index vs. GDP per capita (p Value = 0.823) Figure 8: Trade Balance (Alberta) vs. GDP per capita (p Value = 0.823) Figure 9: Family Median After-Tax Income vs. GDP per capita ((p Value = 0.223) Figure 10: Weekly Wage Rate vs. GDP per capita ((p Value = 0.826) Figure 11: Personal Consumption Expenditures per household vs. GDP per capita ((p Value = 0.921) Figure 12: Transportation Expenditures per capita vs. GDP per capita ((p Value = 0.876) Figure 13: Income Taxes per capita vs. GDP per capita ((p Value = 0.849) Figure 14: Savings Rate (Alberta) vs. GDP per capita ((p Value = ) Figure 15: Household Debt per capita (Canada) vs. GDP per capita ((p Value = 0.871) Figure 16: Value of Public Infrastructure per capita (Edmonton) vs. GDP per capita ((p Value = ) Figure 17: Value of Household Infrastructure per capita (Canada) vs. GDP per capita ((p Value = 0.934) ANIELSKI Management Inc. 12/21/09 iv

5 The Edmonton 2008 GPI Report Figure 18: Poverty Rate (% of persons living below LICO) (Edmonton) vs. GDP per capita ((p Value = ) Figure 19: Income Inequality (Alberta) vs. GDP per capita ((p Value=0.910) Figure 20: Unemployment Rate vs. GDP per capita ((p Value = ) Figure 21: Underemployment Rate (Alberta) vs. GDP per capita ((p Value = Figure 22: Paid Work Time Use (Alberta) vs. GDP per capita ((p Value = ) Figure 23: Unpaid Work Time (Alberta) per capita vs. GDP per capita ((p Value = 0.573) Figure 24: Leisure Time (Alberta) per capita vs. GDP per capita ((p Value = ) Figure 25: Volunteer Time per capita vs. GDP per capita ((p Value = n.a.) Figure 26: Communing Time per worker per day vs. GDP per capita ((p Value = 0.947) Figure 27: Life Expectancy vs. GDP per capita ((p Value = 0.894) Figure 28: Infant Mortality vs. GDP per capita ((p Value = ) Figure 29: Obesity (Edmonton Capital Health Region) vs. GDP per capita ((p Value = Figure 30: Suicide Rate vs. GDP per capita ((p Value = ) Figure 31: Youth Drug Use Offenses vs. GDP per capita ((p Value = 0.727) Figure 32: Auto Crashes vs. GDP per capita ((p Value = ) Figure 33: Family Disputes vs. GDP per capita ((p Value = 0.867) Figure 34: Crime Rate vs. GDP per capita ((p Value = ) Figure 35: Problem Gambling (Alberta) vs. GDP per capita ((p Value = 0.650) Figure 36: Voter Participation vs. GDP per capita ((p Value = n.a.) Figure 37: Educational Attainment vs. GDP per capita ((p Value = 0.431) Figure 38: Conventional Crude Oil and Natural Gas Reserve Life (Alberta) vs. GDP per capita ((p Value = ) Figure 39: Oilsands Reserve Life (Alberta) vs. GDP per capita ((p Value = ) Figure 40: Natural Gas Energy Use vs. GDP per capita (p Value = ) Figure 41: Electricity Energy Use vs. GDP per capita (p Value = ) Figure 42: Agricultural Land vs. GDP per capita ((p Value = n.a.) Figure 43: Timber Sustainability Index (Alberta) vs. GDP per capita ((p Value =-0.551) Figure 44: Forest Fragmentation (Alberta) vs. GDP per capita ((p Value =-0.953) Figure 45: Green Space vs. GDP per capita ((p Value = n.a.) Figure 46: Wetlands (Alberta) vs. GDP per capita ((p Value = ) Figure 47: Water Quality Index vs. GDP per capita ((p Value = 0.824) Figure 48: Air Quality Index vs. GDP per capita ((p Value = 0.648) Figure 49: Greenhouse Gas Emissions vs. GDP per capita ((p Value = 0.929) Figure 50: Carbon Budget (Alberta) vs. GDP per capita ((p Value = ) Figure 51: Hazardous Waste (Alberta) vs. GDP per capita ((p Value = 0.903) Figure 52: Landfill Waste vs. GDP per capita ((p Value =-0.614) Figure 53: Ecological Footprint vs. GDP per capita ((p Value = 0.846) Figure 54: Edmonton Wellbeing Index and GDP Forecasts Figure 55: Genuine Wealth Accounting Model for Measuring Community Wellbeing Table 1: The Forty-Eight Edmonton Genuine Progress Indicators of Wellbeing... 6 Table 2: The Edmonton Wellbeing Condition Report Card for Table 3. Genuine Progress Indicators that are very strongly (p Value = ) or strongly (p Value = ) correlated with GDP Table 4. Genuine Progress Indicators that are very strongly (-0.8 to -1.0) or strongly (-0.4 to ) negatively correlated with GDP Table 5. Genuine Progress Indicators that are moderately (p Value = ) and positively or negatively correlated with GDP Table 6. Genuine Progress Indicators that are weakly (p Value = ) positively or negatively correlated with GDP ANIELSKI Management Inc. 12/21/09 v

6 Executive Summary This report is the second in a series that assesses the conditions and trends of 48 genuine progress indicators (GPI) of economic, social and environmental wellbeing for Edmonton over the period 1981 to The purpose of the study was to answer the question: Is Edmonton s economic progress sustainable in terms of other quality of life and wellbeing conditions? To help answer this question, the GPI analysis examines the trends and interrelationships of economic growth (measured in terms of real GDP per capita) with 47 other indicators of wellbeing. The result is a state of wellbeing account for the City of Edmonton. The 2009 Edmonton GPI accounts of wellbeing shows a mixture of both positive and negative trends in Edmonton s economic, social and environmental wellbeing. The above figure summarizes the overall results contrasting Edmonton s real GDP per capita with a composite Edmonton Wellbeing Index comprising all 48 economic, social and environmental indicators. The results show that between 1981 and 2008, Edmonton s real GDP per capita has risen, albeit irregularly, and declined sharply between 2007 and 2008 due to the affects of significant economic inflation in the Alberta economy. In contrast to economic growth, the Edmonton Wellbeing Index rose slightly in the early mid- 1980s above the 1981 benchmark year, peaked in 1983 then declined steadily hitting a low in Since 1998, the overall Edmonton Wellbeing Index has been steadily increasing though has not yet reached the 1981 benchmark-year level. ANIELSKI Management Inc. 12/21/09 1

7 The results suggest that while the economy has grown steadily on a per capita basis between , the overall conditions of wellbeing were declining until 1998 when a recovery in overall wellbeing has been underway. The next figure shows the respective wellbeing conditions of all 48 economic (12 indicators), social (20 indicators) and environmental (16) wellbeing indicators for the year 2008, displayed in consolidated radial graphic creating a flower shape with each indicator representing a discrete petal. The healthier the condition of wellbeing the higher the index score for that indicator (e.g. 100 is the maximum score or optimum wellbeing). Of the 12 economic wellbeing indicators, 9 are in a positive or improving wellbeing condition and three (transportation expenditures, income taxes, and household debt) are in poor or declining condition of wellbeing. Overall, the Edmonton Economic Wellbeing Index has been improving since reaching a low in Of the 20 social wellbeing indicators 7 are in a positive or improving condition of wellbeing, including life expectancy, infant mortality, unemployment, crime rates, 11 are in negative or declining condition, including family disputes, commuting time, youth drug crimes, problem gambling, and voter participation, and two (paid work time and unpaid work time) are mostly unchanged. Overall, the Edmonton Social Wellbeing Index has been improving since reaching a low in Of the 16 environmental wellbeing indicators, 7 are in positive or improving condition (river water quality, air quality index, natural gas and electricity consumption, and residential waste) to landfills, 8 are in negative or declining condition (oil and gas reserve life, greenhouse gas emissions per capita, carbon budget deficit, green space per capita, hazardous waste and ecological footprint) and one remains relatively unchanged (oilsands reserve life). Overall, the Edmonton Environmental Wellbeing Index has been improving since reaching a low in 1998 ANIELSKI Management Inc. 12/21/09 2

8 Forecasts of the Edmonton Wellbeing Index, based on the previous five-year average trends, suggest that by 2014 the conditions of wellbeing will continue to improve and the Index will have exceeded all-time highs in the early 1980s. Overall, the results of the wellbeing assessment shows that Edmonton s overall state of wellbeing is in a healthy and improving condition, though there are some economic, social and environmental conditions that need attention. For example, rising income inequality, rising levels of family disputes, loss of urban agricultural land, rising numbers of auto crashes, and a growing ecological footprint. The results of this assessment of wellbeing represents a first step in developing an even more comprehensive portrait of wellbeing for Edmonton. The results can be used to provide important context to Edmonton s long-range strategic plan and in helping to shape public policies. ANIELSKI Management Inc. 12/21/09 3

9 1.0 Introduction For more than 50 years economists have measured the economic wellbeing of nations using a System of National Accounts (SNA) and the Gross Domestic Product (GDP) as the primary measure of economic progress. However, the GDP was never intended to measure the wellbeing of nations as it simply measures the monetary value of economic exchange of goods and services and production. As Robert Kennedy noted 40 years ago, the GDP measures everything except that which makes life worthwhile. In other words, this traditional economic performance measurement system fails to measure the conditions of wellbeing economic, social and environmental that matters most to citizens. To address these shortcomings of the GDP, a group of US economic researchers developed the Genuine Progress Indicator (GPI) in 1995 as a broader measure of wellbeing addressing the inherent shortcomings of the GDP. In 2001, a group of researchers at the Alberta-based Pembina Institute, led by economist Mark Anielski, refined the US GPI model developing a prototype sustainability accounting system called the Alberta GPI Sustainable Wellbeing Accounting System. 1 The purpose of this model was to account for the sustainability and changes in the wellbeing conditions of Alberta s five capital assets, namely: human, social, natural, built and financial capital. Anielski then formalized this prototype model into the Genuine Wealth (wellbeing) Assessment model 2 for measuring the wellbeing (genuine wealth) of communities, businesses and organizations. A genuine wealth assessment results in a profile of community wellbeing using genuine progress indicators that can be used by decision makers to assess overall quality of life that are ideally relevant to the values of a community s citizens. In this, the second updated GPI report 3 for the City of Edmonton, the trends in 48 indicators of economic, social and environmental wellbeing are examined over the period 1981 to This wellbeing assessment examines the trends and interrelationships of economic growth (measured in terms of GDP) with 47 other social, health and environmental indicators of wellbeing. How, for example, is GDP growing in relationship to average commuting times, air quality, water quality, and various health indicators like life expectancy and suicide? While a rising GDP may suggest a healthy exchange of money for goods and services in Edmonton s economy, the things that contribute to genuine wellbeing and sustainability for individuals, households, communities and the environment may be showing signs of stress and failing health. The first Edmonton GPI 2007 Report completed in 2008 established a benchmark State of Wellbeing of Edmonton report highlighting the current and long-term trends in the economic, social and environmental wellbeing conditions of the City of Edmonton, with some indicators relevant to Alberta and Canada (in the absence of Edmonton-specific data). This 2009 Edmonton GPI Report provides an account of changes in wellbeing conditions in Anielski, M, M. Griffiths, D. Pollock, A. Taylor, J. Wilson, S. Wilson Alberta Sustainability Trends 2000: Genuine Progress Indicators Report 1961 to Pembina Institute for Appropriate Development. April The first Edmonton GPI study and report was completed in 2008 for the period ANIELSKI Management Inc. 12/21/09 4

10 2.0 What is Genuine Wealth Accounting and the GPI? Genuine Wealth Accounting (GWA) is a model for measuring the overall conditions of wellbeing of a community, business or organization. The model is constructed along the same lines as a conventional financial accounting system except that five forms of capital are accounting for, namely: human, social, natural, built and financial capital. Wellbeing ledgers or accounts are constructed using various data sources along the lines of each of the five capital accounts resulting in a suite of integrated economic, social and environmental genuine progress indicators (GPI), namely indicators of wellbeing. The genuine wealth accounts and the GPI are considered to be interrelated and are thus presented as an integrated profile of wellbeing in the shape of a flower graph or radial graphic, suggesting that no single indicator is more important than any other. The Edmonton GPI, a replication of the original Alberta GPI, includes 48 indicators 4 of wellbeing (see Table 1) for the period Trend data is drawn from various statistical sources including Statistics Canada, the City of Edmonton, Capital Health Authority, the province of Alberta and other sources. One of the unique features of the GWA is the composite Wellbeing Index, often referred to as the wellbeing flower index. The Edmonton Wellbeing Index, for example, is a graphic that shows the overall wellbeing condition for Edmonton using all 48 wellbeing indicators in a single, integrated wellbeing portrait or graphic. The index is constructed by normalizing (i.e. converting raw data into an nominal index score) data into comparable scores that can be plotted in a single graphic and revealing that each wellbeing indicator is of equal importance. The result is a new kind of wellbeing balance sheet that reveals the respective strengths (assets) and weaknesses (liabilities) of a community or organization. Formatted: Bullets and Numbering. 4 In theory any number of indicators could be used to construct a community wellbeing profile. For example, the Genuine Wealth Assessment for the City of Leduc (developed by Anielski Management Inc. in 2006) used 117 indicators to measure the condition of Leduc s five capital assets. The only limiting factor in such accounting of wellbeing is data availability and time-series data. ANIELSKI Management Inc. 12/21/09 5

11 Table 1: The Forty-Eight Edmonton Genuine Progress Indicators of Wellbeing Economic Social Environmental Economic growth (real GDP per capita) Economic diversity * Trade balance ** Family median after-tax income Weekly wage rate Personal consumption expenditures * Transportation expenditures * Income taxes * Savings rate ** Household debt *** Value of public infrastructure Value of household infrastructure ** Note: * Edmonton CMA ** are Alberta statistics *** are Canadian statistics Of the 48 GPIs of wellbeing for the City of Edmonton, the majority (27) are specific to the geographic region of the City of Edmonton, 16 are for the province of Alberta (marked with a ** in Table 1), 5 are for the Edmonton Census Metropolitan Area (CMA) (marked with an *), and one is for Canada (marked with a ***). 5 While some of the indicators used reflect provincial wellbeing conditions (e.g. oil and gas reserve life) we chose to retain these indicators assuming these conditions are as relevant to Edmontonians as they are to other Albertans. Caveats and Cautions Poverty rate Income inequality ** Unemployment Underemployment ** Paid work time ** Unpaid work time ** Leisure time ** Volunteer time Commuting time Life expectancy Infant mortality Obesity Suicide Youth drug use offenses * Auto crashes Family disputes Crime rate Problem gambling ** Voter participation Educational attainment Conventional crude oil and natural gas reserve life ** Oilsands reserve life ** Natural gas energy use Electricity energy use Agricultural land Timber sustainability index ** Forest fragmentation ** Green space Wetlands ** Water quality index Air quality index Greenhouse gas emissions Carbon budget ** Hazardous waste ** Landfill waste Ecological footprint The key limiting factor in the GPI measurement work is the absence of City-of-Edmontonspecific statistics and the lack of consistent, longitudinal statistics due to inconsistency in statistical reporting and changes in survey protocols by statistical agencies (e.g. Statistics Canada). This results in data gaps and the need to consider data-filling protocols to generate longitudinal time-series for the evaluation of trends and correlations amongst indicators. Statistical extrapolation and historical trend analysis to estimate missing data points was required and are identified in the raw data tables (see Appendix 1). While we believe our data filling methods are reasonable, we recognize that they are neither precise nor accurate; thus some of our results and interpretation of trends must be considered with some caution. Another caution is that due to rounding of data in MS Excel spreadsheets, some readers 5 Because the Edmonton GPI analysis attempted to replicate the original 2001 Alberta GPI accounts, many of the indicators used are not geographically specific to the City of Edmonton. Moreover, many statistics are not reported at the City-scale and thus CMA level or Alberta averages are used as proxies for the City of Edmonton. ANIELSKI Management Inc. 12/21/09 6

12 may find that self-calculated annual or long-term percentage changes using the raw indicator data in Appendix 1 may not reconcile with our reported calculations; this is due to fewer significant digits shown in Appendix 1. Why only 48 indicators? A logical question is why are only 48 indicators of wellbeing considered? In theory, there are no limits to the number of indicators that could be considered in measuring the wellbeing of a community. In a similar study for the City of Leduc (The City of Leduc 2005 Genuine Well-being Report) using the Genuine Wealth Assessment model, 117 indicators of economic, social, health and environmental wellbeing indicators were used to develop a comprehensive wellbeing profile for Leduc. The original Alberta GPI accounts developed in 2001 used 51 indicators that were selected on the basis of being consistent with the Alberta Government s 24 key performance indicators (Measuring Up) and augmented with other indicators of sustainability and wellbeing that were being consistently used in North America. Ultimately the choice of indicators should be related to the values of a community in order to measure the conditions of wellbeing that are considered important to quality of life. Indicators might also be selected on the basis of known science-based determinants of wellbeing and happiness, as was the recently released Canadian Index of Wellbeing and Bhutan s Gross National Happiness measure of national wellbeing. 3.0 The Edmonton Wellbeing Index Results The 2009 Edmonton GPI accounts of wellbeing shows a mixture of both positive and negative trends in Edmonton s economic, social and environmental wellbeing. Figure 1 shows that between 1981 and 2008, Edmonton s total real GDP (expressed in 2008 dollars) increased by 76.2% or 2.8% increase per annum. During the same time period the City of Edmonton s population rose 44.4% from 521,205 in 1981 to 752,412 in 2008; an annual increase of 1.6%. Edmonton s real GDP per capita increased 22.1% between 1981 and 2008 or 0.8% per annum. In 1981, Edmonton s real GDP per capita was $52,316 (in 2008 dollars), then rose irregularly peaking at $71,680 per capita in In the past two years real GDP per capita has declined reaching $63,860 per capita in 2008, due to the affects of significant economic inflation in the Alberta economy. 6 Between 2007 and 2008 the real GDP per capita fell significantly by 9.2% from $70,329 per capita in In contrast to the GDP growth, the Edmonton Wellbeing Index a composite index of 48 economic, social and environmental indicators 7 rose slightly in the early mid-1980s above the 1981=100 benchmark, peaked at in 1983 then declined steadily through to 1998 when it hit a low of Since 1998, the overall Edmonton Wellbeing Index has been steadily increasing reaching 94.8 in Real GDP is estimated using the Alberta GDP Implicit Price Index. Between 2007 and 2008 the Index increased significantly by 12.9% thus significantly deflating Edmonton s modest increase in total GDP, expressed in current dollars. 7 The Edmonton Wellbeing Index is calculated on the basis of first combining the indicators by subthemes (economic, social and environmental) and then summing up these sub-indices scores, giving equally weighting to each of the subthemes. There are 12 economic indicators, 20 social indicators, and 16 environmental indicators. ANIELSKI Management Inc. 12/21/09 7

13 Figure 1: Edmonton GDP vs. Edmonton Wellbeing Index (48 indicators), The trend in Figure 1 suggests that while Edmonton s economic performance has been generally robust of the past quarter-century, the overall conditions of wellbeing (measured in terms of the aggregate Wellbeing Index) have been declining since the early The good news is that, since reaching a low in 1998, the Edmonton Wellbeing Index has been recovering but has not yet reached parity with the 1981 benchmark year. If the Edmonton Wellbeing Index is considered as a measure of the wellbeing of a society, the results suggest economic growth has come at a cost to overall wellbeing. However, some indicators have shown marked improvement while others have experienced sharp declines. If the past five-years are any indication of future trends, then we predict the GPI Wellbeing Index will continue to improve and reach 1981 parity in Accounting for trends in the economic, social and environmental wellbeing indicator clusters, Figure 2 shows the trends ( ) of the Economic Wellbeing Index (12 indicators), Social Wellbeing Index (20 indicators of community wellbeing and health), the Environmental Wellbeing Index (16 indicators) relative to the Edmonton Wellbeing Index (a composite of 48 economic, social and environmental indicators) versus the GDP per capita index. ANIELSKI Management Inc. 12/21/09 8

14 Figure 2: GPI Economic, Social, Environmental Wellbeing Indices vs. GDP per capita Index, The Edmonton Economic Wellbeing Index (comprised of 12, equally weighted economic wellbeing indicators) was highest in 1985 at and lowest in 1998 at Since 1998 the Economic Wellbeing Index has been improving but has not yet reached parity with the 1981 benchmark of Between 2007 and 2008 the Economic Wellbeing Index rose slightly 0.57% to 96.1 in The key positive drivers of the Economic Wellbeing Index over the study period ( ) include: a) increased real GDP per capita (up 22.1% compared with 1981) b) an improved trade balance, exports exceeding imports (45.5% improvement over 1981) c) increasing personal consumption expenditures per capita (up 51.6% compared with 1981) Those factors which most negatively impacted the GPI Economic Index include: a) increased transportation expenditures per capita (up 167.8% compared with 1981) b) increasing household debt per capita (up 129.3% compared with 1981) c) increased personal income taxes paid per capita (up 101.0% compared with 1981) The Edmonton Social Wellbeing Index (comprised of 20 equally-weighted wellbeing indicators) was highest in 1983 at 103.7, then fell steadily throughout the latter part of the eighties, reaching a low of 91.3 in Since 2003 the Index has been improving steadily reaching in 2007 then fell by 1.03% in 2008 to The key positive drivers of the Edmonton Social Wellbeing Index between 1981 and 2008 have been: ANIELSKI Management Inc. 12/21/09 9

15 a) decreased unemployment rates (down 16.7% compared to 1981) b) decreased underemployment rate (down 80.0% since 1981) c) increase educational attainment (up 38.0% since 1981) d) declining poverty rate (those living below the LICO) (down 12.1% compared to 1981) e) falling crime rates (down 10.4% since 1981) f) rising life expectancy for men and women (up 5.9% compared to 1981) g) declining infant mortality (down 48.7% since 1981) The key negative drivers of the Social Wellbeing Index have been: h) increased youth drug use offenses (up 228.6% since 1981) i) increased estimated number of problem gamblers (up 140.0% since 1981) j) increased rates of reported family disputes (up 127.5% since 1981) k) increased commuting times (up 57.2% since 1981) The Edmonton Environmental Wellbeing Index (comprised of 16 equally-weighted indicators) experienced the most dramatic decline over the reporting period from a peak of in 1983 to a low of 73.5 in Since 1998 the Environmental Wellbeing Index has been rising reaching 88.6 in Between 2007 and 2008 the Index rose slightly by 0.86%. The most significant positive drivers of the Environmental Wellbeing Index between 1981 and 2008 include: a) improved water quality of the North Saskatchewan River (up 77.2 % since 1981) b) improved overall air quality index (up 34.1% since 1981) c) decreased landfill waste per capita (down 47.1% since 1981) d) decreased consumption of natural gas per capita (down 61.3% since 1981, due primarily to the loss of major industry users) and electricity consumption per capita (down 14.8% since 1981) Negative impacts on the Environmental Wellbeing Index include: a) decreased conventional crude oil and natural gas reserve life for Alberta (down 51.5% since 1981) b) increased ecological footprint (up 60.3% since 1981) c) increased in total hazardous waste produced per capita in Alberta (up almost 300% since 1981) d) increased greenhouse gas emissions per capita (up 13.5% since 1981) e) a decline in the availability of agricultural land (down 22.5% between 2003 and 2008) and green space per capita (down 7.1% between 2003 and 2008) Another way of portraying the wellbeing index, rather than a single line graph as in Figure 1, is to portray all 48 wellbeing indicators into a single, integrated and composite image, as in the unique radial Edmonton Wellbeing Index shown in Figure 3. ANIELSKI Management Inc. 12/21/09 10

16 Figure 3: The Edmonton Wellbeing Index for 2008 The Edmonton Wellbeing Index for 2008 (Figure 3), also known as the Wellbeing Flower Index, is akin to an integrated wellbeing balance sheet for a community or organization, that shows those wellbeing indicators which are in good to great condition (with a relative score of between ) and those in poorer condition (a score of less than 40). For example, consider each wellbeing indicator of 48 GPI indicators represents one of 48 pedals in a flower. The condition of wellbeing of each GPI is measured in terms of wellbeing score from 0 to 100; the closer the score is to 0 the worse the condition of that indicator; conversely, the closer the score is to 100 the better the condition of wellbeing. A score of 100 suggests the best or optimum condition of wellbeing over the reporting period All economic, social and environmental indicators can thus be presented in a circle (Figure 3) suggesting that all indicators are connected and interrelated when considering the wellbeing of a community or organization. If every indicator were in optimal condition than this would result in a perfect flower image; each petal (representing a wellbeing indicator) equally robust and in harmony with another. GPI scores are derived for each indicator by converting the original raw data time (e.g. GDP per capita), for the period 1981 to 2008, to a numeric index from 0 to 100; known as normalizing the data set. A score of 100 is assigned to the best condition registered for each indicator over the period 1981 to As per Figure 3, the higher the score, that is the closer its flower pedal point is to the outside edge of the circle (i.e. 100 basis points), the better the condition of that indicator; the worse the score the closer the flower pedal point is to the centre of the circle. For example, in the years between 1981 and 2008, Edmonton s real GDP per capita was highest in 2006; thus the score for economic growth in that year was 100. In ANIELSKI Management Inc. 12/21/09 11

17 contrast, auto collision rates were the lowest in 1997 at per 1000 population thus receiving a score of 100 basis points. 8 Figure 4 shows the Edmonton Wellbeing Index with the worst overall score in 1998 compared to the Index for 1983, the year with the best overall score. Figure 4: Edmonton Wellbeing Index for 1998 (Worst Year) 8 In the case of auto collision the index uses an inverse calculus, that is, the lower the collision rate relative to previous years the higher the index score). ANIELSKI Management Inc. 12/21/09 12

18 Figure 5: Edmonton Wellbeing Index 1983 (Best Year) Individual Wellbeing Indicator Results Table 2 summarizes the conditions of wellbeing for 2008 and the trends, since 1981, for each of the 48 Edmonton GPIs. Character faces are used to symbolize these conditions as follows: a positive or improving condition a negative or declining condition either no significant trend in the condition or insufficient information to assess conditions Colored arrows are used to indicate the general long-term trend (since 1981) in each in each indicator condition and the implications of the trend as follows: Increasing with positive implications Increasing with negative implications Declining with negative implications Declining with positive implications Relatively unchanged or no clear trend ANIELSKI Management Inc. 12/21/09 13

19 The trends for each indicator are graphed relative to the change in Edmonton s real GDP per capita (see Figures 7-53 later in this study). The majority of GPIs of wellbeing are reported on a per capita basis for comparison with per capita real GDP. The contrasting of each wellbeing indicator with real GDP per capita is intended to visualize the potential relationship between economic growth and changes in key attributes of quality of life in Edmonton. The overall results show that of the 12 economic wellbeing indicators 9 are in a positive or improving wellbeing condition and three (transportation expenditures, income taxes, and household debt) are in poor or declining condition of wellbeing. Overall, the Edmonton Economic Wellbeing Index has been improving since reaching a low in Of the 20 social wellbeing indicators 7 are in a positive or improving condition of wellbeing, including life expectancy, infant mortality, unemployment, crime rates, 11 are in negative or declining condition, including family disputes, commuting time, youth drug crimes, problem gambling, and voter participation, and two (paid work time and unpaid work time) are mostly unchanged. Overall, the Edmonton Social Wellbeing Index has been improving since reaching a low in Of the 16 environmental wellbeing indicators, 7 are in positive or improving condition (river water quality, air quality index, natural gas and electricity consumption, and residential waste) to landfills, 8 are in negative or declining condition (oil and gas reserve life, greenhouse gas emissions per capita, carbon budget deficit, green space per capita, hazardous waste and ecological footprint) and one remains relatively unchanged (oilsands reserve life). Overall, the Edmonton Environmental Wellbeing Index has been improving since reaching a low in Seven of the 16 environmental indicators (e.g. forest fragmentation) are provincial in scope based on Alberta s overall environmental conditions and then prorated for Edmonton s population, to reflect Edmontonian s share of these provincial environmental conditions. All GPI statistics are for the City of Edmonton unless otherwise noted; for example, some statistics are only available for Edmonton CMA (census municipal area), Alberta or Canada and are thus noted. ANIELSKI Management Inc. 12/21/09 14

20 Table 2: The Edmonton Wellbeing Condition Report Card for ECONOMIC WELLBEING Genuine Progress Indicators Economic growth Real GDP per capita, $2008, Edmonton GPI Condition in 2008 $63,860 Long-term Trend and Condition Description of Trend Edmonton s GDP per capita in inflation-adjusted dollars has risen by 22.1% since 1981 or by 0.81% per annum. However, real GDP per capita is estimated to have declined 9.2% between 2007 and 2008, for a second consecutive year. Economic diversity Index Distribution of Edmonton s GDP by sector relative to the Canadian economy, Edmonton CMA Trade balance Value of exports less imports, Alberta Family median after-tax income $2008, Edmonton Weekly wage rate $2008, Edmonton Personal Consumption Expenditures per capita, $2008, Edmonton CMA Transportation Expenditures per capita, $2008 (includes public transit), Edmonton CMA Income Taxes Income taxes paid by Edmontonians, per capita, $2008, Edmonton CMA 0.93 (e) 9 $11,948 $47,156 (e) $ $27,948 (e) $4,664 (e) $6,462 (e) The diversity of Edmonton s economy relative to the Canadian economy shows increased diversification since However, in 2008 the economy was not as diversified as in Edmonton s trade balance (exports less imports) has shown a general improvement since lows reached in Between 2007 and 2008 the trade balance is estimated to have increased 1.2%. Family median, after-tax, real (adjusted for inflation) income remains lower in 2008 than at its peak in Between 1981 and 1991 real family income declined but since 1991 has been rising slowly. Between 2007 and 2008 family income is estimated to have declined 2.1%. Between 1981 and 1997 real weekly wages remained relative unchanged. However, since 1997 wages have been rising. Between 2007 and 2008 weekly wages rose by 1.7%, the highest level since Real personal consumption expenditures per capita, a key driver of the GDP, was 51.6% higher than in Between 2007 and 2008 personal spending is estimated to have declined slightly by 0.06% in 2008 from its peak in Real transportation expenditures are 167.8% higher in 2008 than in 1981, having increased faster than GDP per capita since Between 2007 and 2008 they were estimated to have risen by 14.9%, the highest level. Income taxes (in inflation adjusted dollars) per capita have risen 101.0% (more than doubling) since 1981 or at an annual average increase of 3.7% (far greater than real GDP per capita growth). Between 2004 and 2008 personal income taxes have risen sharply; between 2007 and 2008 they were estimated to have risen 4.9% in 9 (e) denotes an estimate for 2008 based on 5-year moving average trend analysis of previous year statistics. ANIELSKI Management Inc. 12/21/09 15

21 Savings rate Percentage of after-tax disposable income, Alberta Household debt per capita, $2008, Canada Value of public infrastructure per capita, $2008, Edmonton Value of household infrastructure per capita, $2008, Canada Economic Wellbeing Index (1981=100 benchmark year) 14.3% $39,816 (e) $43,375 $2,702 (e) 96.1 real terms, the highest level since The average savings rates by Albertans fell dramatically between 1982 (16.2%) and 1999 (3.1%) but have since rebounded reaching 14.3% in Between 2007 and 2008 savings rates increased from 11.4% to 14.3% Household and personal debt has grown has grown 129.3% since 1981 for the average Canadian and Edmontonian. Between 2007 and 2008 it is estimated to have increased a further 5.2%. The value of Edmonton s public infrastructure per capita is significant and rising. Between 2007 and 2008 the real per capita value increased 9.1%. The value of household infrastructure (including appliances) per Canadian has been increasing at a similar pace to Edmonton s real GDP per capita. Between 2007 and 2008 the real value per capita s estimated to have declined slightly by 4.2%. The GPI Economic Index increased by 0.57% between 2007 and 2008 but is still lower than the peak of in SOCIAL WELLBEING Genuine Progress Indicators Poverty rate Percentage of persons living below LICO low income cut-off, Edmonton Income inequality Gini Coefficient (after tax and transfer income, all families), Alberta Unemployment rate (%) Edmonton CMA Underemployment rate (%) Alberta Paid work time Hours of contracted work timer per person (includes paid work, work-related GPI Condition Long-term in 2008 Trend and Condition Rating 11.9% (e) (e) 3.7% 0.16% (e) 3,019 (e) Description of Trend Rate of poverty measured in terms of percentage of persons living below the LICO rose from 1981 to a peak of 21.4% in 1992 and has since been falling. Between 2007 and 2008 the poverty rate is estimated to have declined to 11.9%. Income inequality (the gap between the rich and poor as measured by the Gini coefficient) amongst Albertans has been rising since 1981 and in 2008 was 14.3% higher than the low in The Alberta Gini coefficient is estimated to have risen 0.34% between 2007 and Edmonton s unemployment has steadily fallen since 1993 (11.2%) reaching 3.7% in Between 2007 and 2008 the unemployment rate fell from 3.8% to 3.7%. The Alberta underemployment rate (i.e. those who are employable but cannot secure full-time employment), has fallen significantly from a high of 4.9% in Total hours of paid work per Alberta worker have remained relatively stable over the period 1981 to 2008, ranging ANIELSKI Management Inc. 12/21/09 16

22 SOCIAL WELLBEING Genuine Progress Indicators activities, travel to and from paid work, education) in the labour force per year, Alberta Unpaid work time Hours of housework, parenting, eldercare per person. Alberta Leisure time Hours per person per year, Alberta. Volunteer time Voluntary hours per capita (per Edmontonian) per year, Edmonton Commuting time Average minutes per day per worker (includes both automobile and transit users), Edmonton Life expectancy Estimated average life expectancy (years) for men and women, Edmonton Infant mortality 3-year averages, death per 1000 live births, Edmonton Obesity Percent of adults (18 years or older) with Body Mass Index (BMI) greater than 25, Edmonton Capital Health Authority region Suicide Suicide rate for both sexes per 100,000 population, Edmonton GPI Condition in 2008 Long-term Trend and Condition Rating 1,142 (e) 2,001 (e) 73.3 (e) (e) 5.82 (e) 48.3 (e) (e) Description of Trend from 3,258 hours per year in 1991 to a low of 2,938 in Between 2007 and 2008 we estimate paid work hours fell slightly by 0.5% following a general 5- year declining trend. Hours spent at unpaid work, including housework and parenting, per Albertan per year is higher in 2008 (1,142 hours per capita) than the estimated 1,059 hours spent in 1981 (a low point). However, since the peak of 1,387 (between 1992 and 1998) there has been a general decline in unpaid work hours. Whether fewer hours spent at housework and parenting is a good sign of progress is debatable. Between 2007 and 2008, the estimated hours of unpaid work time declined by 2.2% or 25 hours per person. Albertans have, on average, 298 hours less leisure time per person in 2008 compared with estimated leisure hours in Between 2007 and 2008 the average Albertan is estimated to have lost 3 hours in leisure time. The hours spent volunteering decreased from 85.6 hours per capita in 2004 to 77.0 hours per capita in In 2008, there were an estimated 73.3 hours of voluntary time per capita representing a 4.8% decrease over Based on Statistics Canada commuting time surveys, the average Edmontonian commutes 64.2 minutes to and from work each day in Commuting times (to and from work) have increased an average of 52 seconds a year since 1981 when the average commuting time was 40.8 minutes per day. Between 2007 and 2008 the average commuting time was estimated to have increased by about 45 seconds. Edmontonians, like most Albertans,are living longer than ever with an increase in average life expectancy of men and woman of 4.48 years more in 2007 than in Between 2007 and 2008 the estimated life expectancy of Edmontonians increased by 0.1%. Infant mortality has declined significantly since 1981 by 48.7%. Between 2007 and 2008 infant mortality is estimated to have declined 2.8%. Obesity and overweight conditions rose steadily between 1981 and 1999, when they peaked. Since 1999 there has been a slight yet steady decline in obesity. Suicide rates show a general decline since 1981 though are only slightly lower than in 1981 (15.07 per 100,000) compared with 2008 estimates but are lower than the peak of per ANIELSKI Management Inc. 12/21/09 17

23 SOCIAL WELLBEING Genuine Progress Indicators Youth drug use offenses Number of youth (12-17) who were charged with drug-related offenses per 1000 youth. Edmonton CMA Auto crashes Auto crashes per 1000 population, Edmonton Family disputes Number of reported family disputes per 100,000 population, Edmonton Crime rate All Crime (violent and property) Incidents (excluding traffic) per 100,000, Edmonton Problem gambling Problem gamblers per 100,000 adult population, Alberta Voter participation Edmonton Municipal Election Voter Turnout (% of eligible voters), Edmonton Educational attainment Percentage of Population (15 years and over) with some post-secondary education or university degree (postsecondary completed, some postsecondary and trades), Social Wellbeing Index (1981=100 benchmark year) GPI Condition in 2008 Long-term Trend and Condition Rating 1.46 (e) 39.7 (e) 1,143 (e) 10,010 1,200 (e) 27.3% (2007) 54.2% 99.6 Description of Trend 100,000 population in Between 2007 and 2008 suicides were estimated to have increased slightly by 2.5% Youth drug use offenses have increased by 228.6% between 1981 and An estimated 1.46 Alberta youth per 1000 youth were charged with drug related offenses in 2008, down significantly from 3.2 per 1000 in 2000 but higher than an estimated 0.11 per 1000 in Between 2007 and 2008 there was an estimated 6.5% increase in youth drug use offenses After declining steadily between 1981 and 1995 (the lowest rate at 27.2 crashes per 1000 population), auto crashes have since been increasing. Between 2007 and 2008 the autocrash rate is estimated to have increased 4.3%. The number of reported family disputes has risen considerably since Between 2007 and 2008 it is estimated to have increased 4.6% based on fiveyear moving average trends. The rate of all crimes rose from 1981 to a peak of 14,728 per 100,000 population in Since 1991 crime rates steadily declined then rebounded upwards between 2002 and 2004, having then declined since The lowest crime rate was in 2001 at 8,565 crimes per 100,000. Between 2007 and 2008 Edmonton s crime rate increased slightly by 0.2%. With access to more legalized gambling, the number of problem gamblers in Alberta has grown by an estimated 140% since In the 2007 municipal elections only 27.3% of eligible voters cast their votes compared with 51.6% in More adults (54.2% of the adult population) had some post-secondary education in 2008 compared an estimated 39.3% of the population in The Edmonton Societal GPI Index was highest in 1983 reaching and lowest in 2003 at Since 2003 the Index has been steadily improving, however, between 2007 and 2008 the Social Wellbeing Index fell slightly by 1.0%. ANIELSKI Management Inc. 12/21/09 18

24 ENVIRONMENTAL WELLBEING Genuine Progress Indicators Conventional crude oil and natural gas reserve life Reserve life years, Alberta Oilsands reserve life Reserve life years, Alberta Natural Gas Energy use GJ per capita, per annum, Edmonton Electricity energy use kwh per capita per annum, Edmonton Agricultural land Hectares per capita, Edmonton Timber sustainability Index 1.00= sustainable level), Alberta Forest fragmentation % of Alberta forest lands that remain in original undisturbed condition), Alberta GPI Condition Long-term in 2008 Trend and Condition Rating , (e) 1.0 (e) Description of Trend The average years of reserves remaining at current production (i.e. reserve life ) of conventional crude oil and natural gas in Alberta has steadily declined from a peak of 20.2 years in 1981 to 7.9 years in Alberta s conventional crude oil and natural gas reserves are in decline. For the first time in decades, the reserve life actually increased by 7.9% between 2007 and 2008 from 7.3 years in 2007 to 7.9 years in Oilsands reserve life is relatively stable with an estimated 170 billion barrels of economically viable reserves (10% of the ultimate reserves) available from Alberta s Athabasca oilsands that could last hundreds of years. There are currently an estimated years of oil supply from the oilsands remaining at current production. Between 2007 and 2008 oilsands reserve life is estimated to have increased by 3.6%. Natural gas consumption by Edmontonians per capita has been steadily decreasing since The greatest decrease has been between 2001 and 2008 driven primarily by a 90.3% decrease in total industrial gas use (due to the exit of several major industries). Residential gas consumption per capita has decreased by 3.9% since Between 2007 and 2008 natural gas consumption per capita for all sectors in the Edmonton economy decreased by 9.4%. Electricity consumption by Edmontonians per capita has been declining slowly since 1981 and was 14.8% lower in 2008 compared to Between 2007 and 2008 the estimated electricity consumption of all sectors decreased slightly by 0.6%. There are only hectares of agricultural zoned land available per Edmontonian, significantly higher than the estimated 2.1 hectares of land required to meet the current food consumption demands of the average Edmontonian. Between 2007 and 2008 the amount of agricultural land per capita declined by 4.1%. Alberta s Timber Sustainability Index (the ratio of annual timber growth to all timber harvesting and other natural losses) has been improving. Between 2007 and 2008 the index is estimated to have remained unchanged. The fragmentation of Alberta s forest ecosystems (due to industrial development) has risen so dramatically since the 1960s that an estimated 99% of Alberta s vast productive forest land ANIELSKI Management Inc. 12/21/09 19

25 ENVIRONMENTAL WELLBEING Genuine Progress Indicators Green space Hectares per capita, Edmonton Wetlands Hectares per capita, Alberta Water Quality Index Edmonton Air Quality Index NOx, PM 2.5, O 3, Edmonton Greenhouse gas (GHG) emissions Tonnes of carbon per capita, Edmonton Carbon budget Alberta s GHG total emissions as a percentage of the CO2 sequestration capacity of Alberta s forests and wetlands, Alberta Hazardous waste Kilograms of hazardous waste produced per capital, per year, Alberta GPI Condition in 2008 Long-term Trend and Condition Rating (e) (e) % (e) Description of Trend base is now fragmented. Edmontonians enjoy a good amount of green space for recreation; the hectares available are relatively unchanged compared to However, on a per capita basis the area of greenspace has declined. Between 2007 and 2008 the green space per capita declined by 1.4% as population increased and the amount of allocated greenspace remained unchanged. The area of wetlands in Alberta, critical for water regulation and filtration, has steadily declined as industrial development has increased. The area of wetlands per Albertan has fallen 46.9% since The average river water quality index for Edmonton s North Saskatchewan River (both upstream and downstream of the City of Edmonton) has improved considerably from a low of 41.4 in 1986 to the new all-time high of 93.5 in The higher then index (with 100=excellent or optimum) the higher the water quality. Between 2007 and 2008 the water quality index is estimated to have remained at 2006 levels, or The Air Quality Index, a composite of 3 emissions to air NOx PM 2.5, O 3., known to be related to human health, has been steadily improving since It was highest in 2005 reaching 91.5 and moderated slightly in Between 2007 and 2008 the index decreased (got worse) by 6.6%. GHG emissions per capita are 13.5% higher in 2008 compared to They increased steadily from 1981 to 2004 (the peak) and have been declining since then. Between 2007 and 2008 GHG emissions decreased by 0.27%. Alberta carbon budget deficit (the relationship between GHG/CO 2 emissions to the annual carbon storage by nature) has increased dramatically. For example in 1991 Alberta s forests and natural landscapes were capable of sequestering 43% of total GHG emissions but by 2007 natural landscapes had actually become a net source of CO 2 emissions resulting in a negative 2.9% carbon budget. The volume of hazardous waste produced per year in Alberta has increased dramatically; the 2008 volume produced was 300% higher than in Between 2007 and 2008 hazardous waste per capita is estimated to have increased by 6.2%. ANIELSKI Management Inc. 12/21/09 20

26 ENVIRONMENTAL WELLBEING Genuine Progress Indicators Landfill waste Kilograms of residential waste going to landfills per capita (net of recycled waste) per year, Edmonton Ecological Footprint Hectares per capita, Edmonton Environment Wellbeing Index (1981=100 benchmark) Edmonton Wellbeing Index (1981= 100 benchmark) GPI Condition Long-term in 2008 Trend and Condition Rating (e) Description of Trend As a result of Edmonton s successful recycling programs and the Edmonton composter facility, residential waste to landfills per capita has decreased by over 50% compared to 1981 volumes. Disposal rates peaked in 1991 and have been decreasing ever since. Between 2007 and 2008 residential waste per capita decreased by 9.0%. The ecological footprint, a measure of how much of nature we consume, of each Edmontonian has increasing steadily. In 2008 it was 60.3% higher than in Edmontonians ecological footprint of 10.1 hectares per capita exceeds by 108 times the total land area of the City of Edmonton of only 0.09 hectares per capita. Between 2007 and 2008 Edmontonians ecological footprint is estimated to have increased by 3.2%. The Environment GPI Index declined steadily between 1981 and 2002 but has since been on the rebound. It reached a low of 73.5 in 1998 it and was highest in 1983 at Many key indicators including river water quality, air quality and energy consumption are improving. Between 2007 and 2008 the Environmental GPI Index increased (improved) by 0.86% The overall Edmonton Wellbeing Index while steadily declining between 1983 through to a low in 1998 has since been recovering through 2008 but is not expected to reach parity with early 1980 levels for several years. Between 2007 and 2008 the Edmonton GPI increased (improved) marginally by 0.1%. ANIELSKI Management Inc. 12/21/09 21

27 City of Edmonton Wellbeing Index in Isolation By isolating only those 32 indicators that are specific to the City of Edmonton and Edmonton CMA (i.e. removing those indicators that are only reported at a provincial or national level) an Edmonton-only Wellbeing Index was generated. The results of rerunning the GPI indexing are shown in Figure 6. Figure 6 shows that, while the Edmonton-only Wellbeing Index follows a similar trend between as the 48-indicator index, the Edmonton-only Wellbeing Index improves more rapidly after hitting a low in 1998 reaching an all-time high of in 2007 then falling slightly (-0.31%) in 2008 to These more positive results for an Edmonton-only index suggest that many of the Alberta indicators, primarily environmental, had a strong negative influence on the overall wellbeing index. Figure 6: Edmonton-only Wellbeing Index, ANIELSKI Management Inc. 12/21/09 22

28 4.0 GPI Trends and Relationships with GDP 4.1 Correlations Analysis between GPI Indicators and GDP. The strength of relationship between the each of the 47 GPI of wellbeing and real GDP per capita was examined using statistical correlation analysis. The question being examined is: is there a strong or weak correlation between a change in economic progress (real GDP per capita) and the change in any other economic, social or environmental wellbeing conditions? The statistical analysis calculated a Pearson correlation coefficient (p value), which is a common statistical measure of the correlation between two variables X and Y. Pearson's correlation reflects the degree of linear relationship between two variables. It ranges from +1 to -1. A correlation of +1 means that there is a perfect positive linear relationship between variables. A correlation of -1 means that there is a perfect negative linear relationship between variables. Correlation values in the negatives indicate a reverse relationship between the two variables while positive correlations values indicate a positive, or reinforcing, trend. A correlation of 0 means there is no linear relationship between the two variables. Correlations are rarely if ever 0, 1, or -1. A certain outcome could indicate whether correlations are negative or positive. In interpreting the p value, we need to consider the size of the value (measured by -1 to 1). In considering the correlations, we can group the indicators based on a strong (0.4 to 1.0 p values), moderate (0.25 to 4.0 p values) and weak (0.0 to 0.25 p values) relationship 10 with GDP What does this tell us? Correlations give us a good indication of the strength of the relationship between the two variables of concern. Overall, 41 out of 47 GPIs correlated with Edmonton s real GDP per capita were either strongly or moderately correlated (either positively or negatively). For example, one of the strongest relationships analyzed is between rising GDP and commuting times, greenhouse gas emissions, and personal consumption expenditures. On the other hand, water quality and air quality and reduced household waste to landfills all improved with increasing GDP. The correlation analysis results are presented in Tables 3-5. Table 3 shows that 16 GPI are very strongly (p value of , highlighted in red) positively correlated with real GDP per capita; that is, as real GDP per capita rises so too do these indicators. For example, energy use, water quality index, household debt, personal consumption expenditures, ecological footprint, hazardous waste production, the air quality index, domestic violence, life expectancy, weekly wage rate, educational attainment, obesity, youth drug use offences, and the value of public infrastructure services are highly and positively correlated with GDP per 10 A strong relationship indicates there is some interdependence between two variables. Moderate indicates that there is some interdependence between two variables and weak indicates that there is little interdependence between two variables. 11 Statsoft Inc. Basic Statistics. (2007) ANIELSKI Management Inc. 12/21/09 23

29 capita. What this indicates is that these variables move in the same direction as GDP per capita. As GDP per capita increases these variables tend to increase as well. Other indicators less strongly correlated with real GDP per capita (p value of , highlighted in orange) are also shown in Table 3. Table 3. Genuine Progress Indicators that are very strongly (p Value = ) or strongly (p Value = ) correlated with GDP. Genuine Progress Indicator p Value Commuting time Greenhouse gas emissions Personal consumption expenditures Obesity Hazardous waste Life expectancy Transportation expenditures Household debt Family disputes Ecological Footprint Weekly wages Water Quality Index Economic diversity Value of household infrastructure Income inequality Income taxes Volunteer time Youth drug use offenses Problem gambling Air Quality Index Unpaid work time Green space Agricultural land Educational attainment Table 4 shows there are 6 GPIs that are strongly negatively correlated with real GDP per capita (p value of to -1.0, highlighted in red) while 11 GPIs are moderately negatively correlated (p value of between -0.4 and are highlighted in orange) with real GDP per capita. Regrettable strong correlations with real GDP per capita include the fragmentation of Alberta s forests (i.e. loss of forest ecosystem integrity), the loss of Alberta s wetlands, declining oil and gas reserve life, and declining leisure time per capita; all are falling at a similar rate as real GDP per capita increases. On the positive side, electricity energy use per capita and infant mortality are declining at rates similar to real GDP increases. What this indicates is that these variables move together but in the opposite direction as GDP per capita. As GDP per capita increases these variables tend to decrease. Table 4. Genuine Progress Indicators that are very strongly (-0.8 to -1.0) or strongly (-0.4 to ) negatively correlated with GDP. Genuine Progress Indicator p Value Forest fragmentation (0.953) Wetlands (0.930) Conventional crude oil and natural gas reserve life (0.914) Electricity energy use (0.849) Infant mortality (0.835) Leisure time use (0.819) ANIELSKI Management Inc. 12/21/09 24

30 Unemployment (0.791) Value of public infrastructure (0.699) Natural gas energy use (0.731) Auto crashes (0.695) Underemployment (0.640) Landfill waste (0.614) Suicide (0.563) Timber sustainability index (0.551) Savings rate (0.528) Carbon budget (0.507) Oilsand reserve life (0.433) From this analysis we find a weaker correlation between the 6 remaining GPIs and GDP per capita including, Edmonton Alberta s trade balance, family median after-tax income, crime rate, poverty, voter participation, poverty, paid work time. Therefore we cannot draw any conclusions as to how these variables might behave with respect to GDP. Table 5. Genuine Progress Indicators that are moderately (p Value = ) and positively or negatively correlated with GDP. Genuine Progress Indicator p Value Trade balance Table 6. Genuine Progress Indicators that are weakly (p Value = ) positively or negatively correlated with GDP. Genuine Progress Indicator p Value Family median after-tax income Crime rate (0.235) Poverty (0.150) Voter participation (0.057) Paid work time (0.050) While the correlation analysis results tells us something about the statistical relationship between GDP and individual GPI, these statistics should not be misinterpreted as implying a causal relationship. That is, the increase in real GDP per capita cannot be inferred as the key driver of increasing reports of family disputes, rising life expectancy or improving river water quality; there are many variables that influence both GDP and life expectancy. Furthermore, we cannot make inferences to the degree of change in the GPI variables with increases in GDP, only that there is a change. ANIELSKI Management Inc. 12/21/09 25

31 4.4 Trends in Genuine Progress Indicators Relative to Economic Growth (GDP) The following graphs (Figure 7-53) show the long-term trends ( ) of all 47 economic, social, health and environmental wellbeing indicators in relationship to Edmonton s real GDP per capita. These graphs provide a visual affirmation of the statistical relationship between GDP and wellbeing indicators Some graphs show a strong statistical correlation yielding a high p-value (>0.80) which and be either a positive correlation (i.e. the indicator trends upwards with GDP) or a negative correlation (the indicator is trending downwards as GDP rises). As an example, commuting times, greenhouse gas emissions per capita, personal consumption expenditures per capita, obesity, hazardous waste produced per capita and life expectancy are strongly (p-value >0.90) and positively trending upwards with GDP per capita. Alternatively, natural gas energy use, electricity energy use, and infant mortality are strongly (>0.80) and negatively correlated with GDP per capita. Again, these graphs should not be misinterpreted as suggesting causality (e.g. increasing real GDP per capita growth is not necessarily related to increasing reports of family disputes even if the two indicators are strongly correlated and moving upwards in a similar direction). The contrasting of GDP and wellbeing indicators is simply meant to provide a pictorial image of the relative trends in wellbeing conditions. Figure 7: Economic Diversity Index vs. GDP per capita (p Value = 0.823) ANIELSKI Management Inc. 12/21/09 26

32 Figure 8: Trade Balance (Alberta) vs. GDP per capita (p Value = 0.823) Figure 9: Family Median After-Tax Income vs. GDP per capita ((p Value = 0.223) ANIELSKI Management Inc. 12/21/09 27

33 Figure 10: Weekly Wage Rate vs. GDP per capita ((p Value = 0.826) Figure 11: Personal Consumption Expenditures per household vs. GDP per capita ((p Value = 0.921) ANIELSKI Management Inc. 12/21/09 28

34 Figure 12: Transportation Expenditures per capita vs. GDP per capita ((p Value = 0.876) Figure 13: Income Taxes per capita vs. GDP per capita ((p Value = 0.849) ANIELSKI Management Inc. 12/21/09 29

35 Figure 14: Savings Rate (Alberta) vs. GDP per capita ((p Value = ) Figure 15: Household Debt per capita (Canada) vs. GDP per capita ((p Value = 0.871) ANIELSKI Management Inc. 12/21/09 30

36 Figure 16: Value of Public Infrastructure per capita (Edmonton) vs. GDP per capita ((p Value = ) Figure 17: Value of Household Infrastructure per capita (Canada) vs. GDP per capita ((p Value = 0.934) ANIELSKI Management Inc. 12/21/09 31

37 Figure 18: Poverty Rate (% of persons living below LICO) (Edmonton) vs. GDP per capita ((p Value = ) Figure 19: Income Inequality (Alberta) vs. GDP per capita ((p Value=0.910) ANIELSKI Management Inc. 12/21/09 32

38 Figure 20: Unemployment Rate vs. GDP per capita ((p Value = ) Figure 21: Underemployment Rate (Alberta) vs. GDP per capita ((p Value = ANIELSKI Management Inc. 12/21/09 33

39 Figure 22: Paid Work Time Use (Alberta) vs. GDP per capita ((p Value = ) Figure 23: Unpaid Work Time (Alberta) per capita vs. GDP per capita ((p Value = 0.573) ANIELSKI Management Inc. 12/21/09 34

40 Figure 24: Leisure Time (Alberta) per capita vs. GDP per capita ((p Value = ) Figure 25: Volunteer Time per capita vs. GDP per capita ((p Value = n.a 12.) 12 n.a. signifies an incomplete time-series for valid statistical analysis. ANIELSKI Management Inc. 12/21/09 35

41 Figure 26: Communing Time per worker per day vs. GDP per capita ((p Value = 0.947) Figure 27: Life Expectancy vs. GDP per capita ((p Value = 0.894) ANIELSKI Management Inc. 12/21/09 36

42 Figure 28: Infant Mortality vs. GDP per capita ((p Value = ) Figure 29: Obesity (Edmonton Capital Health Region) vs. GDP per capita ((p Value = ANIELSKI Management Inc. 12/21/09 37

43 Figure 30: Suicide Rate vs. GDP per capita ((p Value = ) Figure 31: Youth Drug Use Offenses vs. GDP per capita ((p Value = 0.727) ANIELSKI Management Inc. 12/21/09 38

44 Figure 32: Auto Crashes vs. GDP per capita ((p Value = ) Figure 33: Family Disputes vs. GDP per capita ((p Value = 0.867) ANIELSKI Management Inc. 12/21/09 39

45 Figure 34: Crime Rate vs. GDP per capita ((p Value = ) Figure 35: Problem Gambling (Alberta) vs. GDP per capita ((p Value = 0.650) ANIELSKI Management Inc. 12/21/09 40

46 Figure 36: Voter Participation vs. GDP per capita ((p Value = n.a.) Figure 37: Educational Attainment vs. GDP per capita ((p Value = 0.431) ANIELSKI Management Inc. 12/21/09 41

47 Figure 38: Conventional Crude Oil and Natural Gas Reserve Life (Alberta) vs. GDP per capita ((p Value = ) Figure 39: Oilsands Reserve Life (Alberta) vs. GDP per capita ((p Value = ) ANIELSKI Management Inc. 12/21/09 42

48 Figure 40: Natural Gas Energy Use vs. GDP per capita (p Value = ) Figure 41: Electricity Energy Use vs. GDP per capita (p Value = ) ANIELSKI Management Inc. 12/21/09 43

49 Figure 42: Agricultural Land vs. GDP per capita ((p Value = n.a.) Figure 43: Timber Sustainability Index (Alberta) vs. GDP per capita ((p Value =-0.551) ANIELSKI Management Inc. 12/21/09 44

50 Figure 44: Forest Fragmentation (Alberta) vs. GDP per capita ((p Value =-0.953) Figure 45: Green Space vs. GDP per capita ((p Value = n.a.) ANIELSKI Management Inc. 12/21/09 45

51 Figure 46: Wetlands (Alberta) vs. GDP per capita ((p Value = ) Figure 47: Water Quality Index vs. GDP per capita ((p Value = 0.824) ANIELSKI Management Inc. 12/21/09 46

52 Figure 48: Air Quality Index vs. GDP per capita ((p Value = 0.648) Figure 49: Greenhouse Gas Emissions vs. GDP per capita ((p Value = 0.929) ANIELSKI Management Inc. 12/21/09 47

53 Figure 50: Carbon Budget (Alberta) vs. GDP per capita ((p Value = ) Figure 51: Hazardous Waste (Alberta) vs. GDP per capita ((p Value = 0.903) ANIELSKI Management Inc. 12/21/09 48

54 Figure 52: Landfill Waste vs. GDP per capita ((p Value =-0.614) Figure 53: Ecological Footprint vs. GDP per capita ((p Value = 0.846) ANIELSKI Management Inc. 12/21/09 49

55 5. Edmonton GDP and Wellbeing Index Forecast to 2014 Using the average percentage change over the past five years ( ) in each of the 48 indicators, the Edmonton Wellbeing Index can be forecast for the period 2009 to Figure 54 shows historical Wellbeing Index trends and forecasted trends 2009 to We estimate that Edmonton s real GDP per capita will grow by an average of 0.35% per year reaching an index of by 2014 while the overall Edmonton Wellbeing Index will increase by 3.46% per year from 2008 reaching by 2014, exceeding the previous high of in This assumes that the past five years of economic, social and environmental wellbeing condition changes will continue into the future. Figure 54: Edmonton Wellbeing Index and GDP Forecasts ANIELSKI Management Inc. 12/21/09 50

56 6. Next Steps: Genuine Wealth Accounting System? The Edmonton GPI indicators and wellbeing measurement/reporting is the first step towards a the development of a comprehensive wellbeing accounting and reporting system. The Genuine Wealth Accounting (GWA) system developed by economist Mark Anielski (see Figure 55) is a practical tool for communities, businesses and organizations to assess the quantitative (i.e. objective) and qualitative (i.e. subjective) conditions of the five capital assets (human, social, natural, built and financial capital) of a community or organization. From these five capital accounts of wellbeing, wellbeing indicators or GPI, can measured, monitored and reported. Figure 55 provides an prototype example of an integrated, fivecapital wellbeing index, a new kind of consolidated wellbeing balance sheet. This integrated wellbeing profile shows the interrelationships and trade-offs between various attributes of the real wealth of a community. Figure 55: Genuine Wealth Accounting Model for Measuring Community Wellbeing Like any performance information or accounting system, the GWA system is intended to provide decision makers and stakeholders with a state of the wellbeing assessment. They help inform public policy and to assess, for example, the relative returns to wellbeing of policy actions and budgetary decisions by evaluating how changes in wellbeing indicators respond, retrospectively, to these decisions. GWA takes a holistic, systems approach to measuring wellbeing. However, as in any complex task of this nature, there are several challenges. The primary challenge is deciding what to measure in terms of wellbeing that are in alignment with the values held by citizens ANIELSKI Management Inc. 12/21/09 51