13 September 2011 – Australian cities were prominent in the top 10 most liveable cities based on the Economist Intelligence Unit’s global liveability index.

But we are also in the top 10 of another index that shows us in a less favourable light: the per capita ecological footprint measured by the Global Footprint Network.

The two indices have a roughly inverse relationship. Developing nations have the lowest per capita ecological footprint but their cities are at the bottom of the EIU’s index – and almost every other index of human welfare.

The contrast between the two indices highlights the great debate over whether sustainability and liveability are locked in inexorable conflict, or whether they could be reconciled in a new green economy.

The contrast also highlights the risk in trying to use a single metric for complex questions.

The sustainability-liveability debate will not be resolved anytime soon.  In the immediate term, it may become more confused as a range of new measurement tools come into use – ranging from more sophisticated versions of the EIU’s liveabilty index and of eco-footprinting, through to measures such as the “Happiness Index” by which the Himalayan kingdom of Bhutan proposes to measure its national progress.

Those engaged in making hard decisions about planning, community development and investment, who may use these tools, need to understand both their scope and limitations, if they are to get meaningful outcomes. 

The Thriving Neighbourhoods conference will provide a good overview of these tools and what they offer.

The emergence of new tools and systems has been driven by the failure of the traditional measures of human wellbeing to capture the complexity of a modern world in which economic and environmental impacts have been globalised.

In the 19th and 20th centuries, economic growth was equated with rising incomes and quality of life. Money provided the unified metric of progress.

A cost-benefit analysis was the ultimate decision-making tool for investments and projects.

Environmental impacts and broader social issues not captured in the moneyed economy were regarded as secondary effects or “externalities” which often meant that they were ignored.

Today, the costs to human health from pollution, and the damage to the ecological systems, have reached a scale that can no longer be ignored when deciding on whether development is a good thing.

The knee-jerk response of mainstream economics has been to try to put a cost on items such as pollution and human health impacts.  But this still leaves out of the equation intangible factors such as lifestyle, natural beauty, social cohesion and heritage conservation.

So, a variety of alternative tools and assessments began to emerge.  Ecological footprinting, for example, has been used to show just how unsustainable current lifestyles in the developed world are.

For example, Professor Peter Newton of Swinburne University has found that each Australian city resident requires, on average, up to seven global hectares of land and water to supply all the resources needed to support their lifestyle.

He concludes that our liveability is at the expense of our sustainability.  Others have shown that if the entire world’s population of nearly 7 billion was to live like we do in Australia, we would need nearly four earths to sustain us.

But the limitation of the ecological footprint is that, it is a resource consumption accounting tool and does not actually measure environmental impact.

The impact on the environment from industry and agriculture in the developing world is far worse than in the developed world, as any visitor to major cities in the developing world with their thick blankets of smog and degraded rivers and coasts will quickly attest.

The EIU’s Global Liveability index, while a broad measure, also has a limited scope.

It was originally meant to provide advice to global companies on where to locate their offices around the world in order to help attract the most capable executives.

It doesn’t address sustainability, but looks at a broad range of issues affecting “liveability” such as security, transport, health services, infrastructure and cultural life.

The EIU’s index and the eco-footprint both seek to come up with a single measure of an extremely complex system – so complex that it begs the question of whether they are meaningful.

The risk can be likened to the episode in the Douglas Adams’ novel, The Hitchhiker’s Guide to the Galaxy where a computer was programmed to find  the answer to the ultimate answer to life, the galaxy and everything.

After seven and a half million years, it came up with the answer of 42, but by that time, no-one could remember what was the original question.

The episode has spawned a side industry where people tried to find some mystical revelation in this number, believing that Adams wasn’t joking!

A range of other tools are now emerging that eschew a single metric in favour of a set of indicators of human well-being, some of which are qualitative.

They range from high-level guidelines on values and ethics such as the Global Compact, to international standards such as International Standard on Assurance Engagements or ISAE 3000, which verifies the credibility and quality of data on social, environmental and economic performance, to reporting tools such as Global Reporting Initiative.

In Australia there are community planning tools for residential developments such as the Council Alliance for Sustainable Built Environment’s STEPS tool, and the Urban Development Institute of Australia’s EnviroDevelopment tool.  The Green Building Council of Australia is also close to releasing its Green Star Communities too.

Each of these tools has its use and limitations.  For people working on policy or implementing real projects, the key is to understand when and how to apply these tools to help inform decision-making.

They would do well to dig deeper than simply look for a single-number answer.  Whatever the mystical significance of the number 42 might be, there is no substitute for a considered assessment of the facts by – and the judgment of – a real person.

Lindsay Bevege is on the Organising Committee of Thriving Neighbourhoods, 25 and 26 October at St Kilda Town Hall, Melbourne.   He is managing director of Business Outlook and Evaluation which focuses on sustainable business strategies and public policy and a former diplomat.