The need for 'convention' in environmental valuation

The rate of growth or decline in Gross Domestic Product (GDP) is reported quarterly in New Zealand and regarded as the paramount measure of how the nation is faring. However, the welfare of New Zealanders is determined by more than economic factors and the non-economic portion is not taken into account when only GDP, which measures monetary exchanges in the market place, is used as a gauge. Non-economic contributions to welfare come from many sources including unpaid work and the natural environment ? from which the economy extracts resources and returns wastes. The Genuine Progress Indicator (GPI) endeavours to develop measures for such items and then adjust GDP to reflect their contribution. GPIs have been constructed for a number of countries and they all show such contributions are considerable, though difficult to measure. No 'convention' has been established for the constructing of a GPI to make the process more systematic and ensure the appropriate data are collected. This paper looks specifically at the approaches taken to value the natural capital and ecosystem services that have contributed to welfare over the 1970?2005 period in New Zealand, and, whether such measures could be more generic.