The Changing Wealth of Nations 2024

Until now, gross domestic product (GDP) has been the headline indicator for tracking economic progress. Its widespread adoption is a testament to its utility in capturing key economic dimensions, particularly those related to the domestic production of market goods and services. However, using GDP is not without its limitations. It falls short in encompassing the full spectrum of productive activities, especially those "produced" by nature, such as breathable air, clean water, nutritious food, weather regulation, and recreation. It also fails to account for the costs associated with this production in terms of human health, resource degradation, and environmental pollution.

Another aggregate economic metric is thus needed that can measure the sustainability of economic progress-a nation's wealth. The minimum condition for economic development to be sustainable is that real wealth per capita does not decline over time. This is because as long as real wealth per capita does not decline, future generations will inherit at least the same production and consumption opportunities as the current generation. Wealth in this context encompasses the value of all the assets of a nation that support economic production, such as factories, intellectual property, and roads (produced capital); forests, fish stocks, and fossil fuel reserves (natural capital); the dimensions of the labor force (human capital); and net foreign assets. Real wealth per capita will increase if more workers enter the labor force or if the same workers upgrade their skills, if forests grow, or new commercially recoverable minerals are discovered. However, it will decline if fish stocks are overfished, machinery degrades, or the reserves of fossil fuels are depleted or become commercially unexploitable.

All countries produce GDP estimates, but few measure wealth. The World Bank's The Changing Wealth of Nations (CWON) program addresses this gap. The CWON program is one of the pioneering efforts in measuring wealth, producing the most comprehensive, publicly accessible, and reproducible wealth database currently available. These monetary estimates draw on internationally endorsed concepts and valuation principles from the System of National Accounts and System of Environmental Economic Accounting. This ensures that CWON's wealth measure is methodologically rigorous and comparable to other metrics of economic progress like GDP.

Over the past two decades, the CWON program has updated and expanded its comprehensive wealth estimates with each new edition, as new data sources, measurement techniques, and guidance became available. This 5^th edition continues this tradition and implements an important methodological change in the way it estimates real wealth aligned with the goal of tracking the sustainability of economic development. The new approach better captures changes in asset relative prices, changes in asset relative (physical) volumes, and changing substitution patterns across assets, which are critical for sustainability as natural capital assets are becoming scarce and have limited substitutes.

Opening remarks by:

• Richard Damania, Chief Economist, Planet Vice Presidency, The World Bank
• Bambang Brodjonegoro, Indonesian Economist, Former Minister of Finance, University of Indonesia

Presentations:

• What is new in CWON 2024?, Diego Herrera, Environmental Economist World Bank, Global Department for the Environment (ENV)
• Main findings and the way forward for CWON. Stefanie Onder, Assistant Professor at American University (previously World Bank)

Panel discussion:

Moderator: Genevieve Connors, Manager, Global Environment Department, Planet Vice Presidency, The World Bank

Catherine Van Rompaey, Senior Economist, Development Data Group, World Bank

Matthew Agarwala, Chair of Sustainable Finance at Sussex University's Bennett Institute for Innovation & Policy Acceleration

Livia Bizikova, Lead II, Monitoring and Governance of the International Institute for Sustainable Development's (IISD) Tracking Progress program

Q&A

• Dr Matthew Agarwala

  Bennett Chair of Sustainable Finance

  Professor Agarwala is Bennett Chair of Sustainable Finance at Sussex University's Bennett Institute for Innovation & Policy Acceleration, Affiliate at the Bennett Institute for Public Policy (Cambridge), Senior Policy Fellow at Yale University's Tobin Center for Economic Policy, and Honorary Professor at Scotland's Rural College. His research covers natural and social capital, economic measurement, green finance, productivity, and wellbeing. Spanning sectors and disciplines, Matthew's collaborators include ecologists, social anthropologists, members of UK Parliament, and Nobel Laureates in peace, medicine, physics, and chemistry. Matthew collaborates with the UN, World Bank, governments, and businesses to highlight nature-related financial risks. He is a sought-after public speaker and regular media contributor (BBC, Bloomberg, Channel 4 News, FT, Guardian, NYTimes, Reuters).

• Livia Bizikova PhD

  Lead II, Monitoring and Governance

  Livia Bizikova PhD. is the Lead II, Monitoring and Governance of IISD's Tracking Progress program, with experience in the fields of sustainable development, indicator systems, participatory planning and integrated assessment. Livia is the coordinator of IISD's efforts to move beyond GDP.

• Prof. Brodjonegoro

  Head of the National Research and Innovation Agency (BRIN)

  Prof. Bambang Permadi Soemantri Brodjonegoro, S.E., M.U.P., Ph.D. is FE UI alumni (1985 - 1990)  Development Economics & Regional Economics. He has served as minister in the government several times, including: 8th Deputy Minister of Finance of Indonesia (3 October 2013 - 20 October 2014), 29th Minister of Finance of Indonesia (27 October 2014 - 27 July 2016), The 15th Minister of Indonesian National Development Planning  (27 July 2016 - 20 October 2019), and the 13th  Minister of Research and Technology (23 October 2019 - 28 April 2021). Since 2021 he has served as Head of the National Research and Innovation Agency (BRIN).

• Richard Damania

  Chief Economist, Planet Vice Presidency

  Richard Damania is the Chief Economist of the Planet Vice Presidency, effective March 1, 2020. He has held several positions in the World Bank including as Senior Economic Advisor in the Water Practice, Lead Economist in the Africa Region's Sustainable Development Department, in the South Asia and Latin America and Caribbean Regions of the World Bank. His work has spanned across multiple sectors and has helped the World Bank become an acknowledged thought-leader on matters relating to environment, water and the economy. Prior to joining the World Bank, he was a Professor of Economics at the University of Adelaide. He has published extensively with over 100 papers in scientific journals, has held numerous advisory positions with governments and in international organizations, and serves on the Editorial Board of several prestigious scientific journals.

• Catherine Van Rompaey

  Catherine is the principal economist and program manager for economic statistics in the World Bank's Development Economics Data Group. In this role, she represents the World Bank in international standard-setting and statistical coordination for national accounts. She oversees the collection of national accounts statistics for the World Bank's World Development Indicators, country classifications by income level, and a range of activities to build capacity and strengthen data resources for World Bank operational countries.

  Before joining the World Bank in 2020, Catherine led national accounts and social statistics programs at Statistics Canada. In her most recent role as Director of Canada's national accounts program, she oversaw the compilation of gross domestic product (GDP), national wealth, productivity and capital stock, along with a range of specialized outputs, research and data development projects.

  Catherine currently serves as chair of the Inter-secretariat Working Group on National Accounts (ISWGNA) and has recently served as president of the International Association for Research in Income and Wealth (IARIW).