Reading the UN’s latest HDI

The United Nation’s Human Development Index (HDI) has come a long way since it was first conceptualized by the late Mahbub ul-Haq. The latest HDI revealed in the UN’s just-released Human Development Report (UNHDR) takes an altogether new shape, one that is direly needed in the way of climate change and environment sustainability. But does the new index, called Planetary pressures–adjusted Human Development Index (PHDI), really follow the spirit of the original HDI. The answer is yes and no, depending on how one sees it.

Recognizing the climate crisis, biodiversity collapse, ocean acidification and other facets of climate change, the PHDI is a composite of the conventional HDI (albeit with slight methodological improvements) and an adjustment factor for planetary pressures. That factor is the arithmetic mean of indices measuring carbon dioxide emissions per capita and material footprint per capita.

In terms of computation, the PHDI is arrived at multiplying the HDI by that adjustment factor. If a country puts no pressure on the planet, its PHDI and HDI would be equal, but the PHDI falls below the HDI as pressure rises. The implication of PHDI is such that countries must have higher HDI values and lower planetary pressures to be able to be categorized as being a developed country in non-GDP terms. No wonder, as a consequence of this change, of the more than 60 very high human development countries in 2019’s HDI-based UNHDR, only 10 are still classified as very high human development on the PHDI.

To this end, by adjusting for planetary pressures, the PHDI retains the simplicity and clarity of the original HDI while accounting for some of the complex system-level dynamics discussed throughout the UN’s latest report. And if the new index ends up shaping public and political debate in countries around the world, leading to reorientation of policies to meet climate change targets, then it would have served another facet of its original spirit envisioned by the late Mahbub ul-Haq.

However, seen from the lens of capabilities approach, the PHDI’s computation doesn’t quite fit the bill. In the original HDI, aspects of education, health, and per capita income (as a proxy for other non-education-non-health factors) were included because these factors manifested people’s capabilities of achieving their goals, desired level of equality, including equality of opportunities, desired income and so forth. The factor for planetary pressures is in most cases a function of higher levels of these very capabilities, which is why fewer countries can boast being classified as very high human development under PHDI.

The UNHDR 2020 rightly notes the need for change in social norms, which in its reading “are powerful determinants of people’s choices and can change faster than commonly assumed”. It also appreciates the importance of incentives which “determine in part what consumers choose to buy, what firms produce and trade, where investors put their money and how governments cooperate”.

It also recognizes that governments and policymakers are the central actors for change, but that “people’s own will to shape their life can come together in organized ways through social movements”. It is also cognizant of the “traditional divide between homo sociologicus—a person who is pushed by social forces and sticks to prescribed behaviour—and homo economicus—a rational actor who acts to maximize his or her own interests and benefits.” Hence, UNHDR’s repeated focus on a new geologic epoch—the Anthropocene—in which humans are a dominant force shaping the future of the planet, which can be for good or for bad.

Yet the PHDI does not take into account human efforts and capabilities to address the climate challenge. These may include, for instance, indicators and proxies for climate change literacy/awareness; financing/banking incentives for green technologies; private/public spending on climate change, energy efficiency, sustainability; and other aspects that shed light on social norms, incentives, and the human drive towards achieving climate goals. After all, the HDI isn’t an indicator of developmental outputs; it is envisioned to track developmental inputs, even as some may conflate education or health as sole outcome of development.

Granted that lack of agreed methodology, and sufficient data across countries to assess progress in human efforts and capabilities towards climate change goals may be a stumbling block. But in the age of Big Data, new out-of-the-box indices can be made or even be commissioned given the mandate the UN has. The Anthropocene age requires fundamental shift in human development indices, one which requires social change and its drivers to be tracked in such indices, in line with the spirit to spark and shape public and political debate.