View source for Decent Living Standards Approach

=Description=

Jason Hickel and Dylan Sullivan:

"Eliminating poverty and improving human welfare requires focusing on specific types of outputs, and ensuring universal access to these things. PPP-based metrics of aggregate output (such as GDP) measure the production of all goods, including those that have limited relevance to poverty and human welfare. This ignores important questions about which sectors need to grow, and whether this could be achieved by reallocating productive capacities from other sectors. Labour and materials that are currently used to produce mansions and casinos can instead be shifted to producing affordable housing; farmland used to produce beef for consumers in the global North can instead be used to produce nutritious foods for workers in the global South, and so on.
Recent empirical studies have established the minimum set of specific goods and services that are necessary for people to achieve decent-living standards (DLS), including nutritious food, modern housing, healthcare, education, electricity, clean-cooking stoves, sanitation systems, clothing, washing machines, refrigeration, heating/cooling, computers, mobile phones, internet, transit, etc."

(https://www.sciencedirect.com/science/article/pii/S2452292924000493#b0340)


=Discussion=

Jason Hickel and Dylan Sullivan:

"It is important to understand that DLS represents a minimum floor for decent living. It does not represent an aspirational standard and certainly does not represent a ceiling. However, it is also a level of welfare that is not presently achieved by the vast majority of people. A new paper by Hoffman et al. (under review) finds that 96.5% of people in low- and middle-income countries are deprived on at least one DLS dimension. This study covers 66% of the population of low- and middle-income countries. If we assume the same level of deprivation holds across that whole country group, and if we ignore deprivation in high-income countries (which has not yet been quantified using this method) we can conclude that at least 6.4 billion people, more than 80% of the world population, are deprived of DLS.6 Ending DLS deprivation would therefore radically improve the lives of the majority of the world’s population.

Several studies have quantified the level of real resources necessary to achieve and sustain DLS for all. Millward-Hopkins (2022) estimates that the annual energy requirements average 14.7 GJ per person if we assume global deployment of the most efficient technologies that are presently available (which is how the primary DLS scenario is defined), or 21.5 GJ per person per year using “current technology” (i.e., widely used best-practice technology).7 These figures are based on a projected population of 8.5 billion in 2050 (consistent with SSP1), whereby extending DLS to all would require 125–183 EJ per year. This amounts to 30–44% of current annual global energy use (which was 418 EJ in 20198). Note that these are total annual requirements. To cover DLS gaps requires much less. Kikstra et al. (2021) estimate that building out the infrastructure needed to cover DLS gaps by 2040 would require cumulative energy inputs of around 290 EJ. This would mean approximately 19 EJ per year from 2025 to 2040, which is less than 5% of current global energy use.

Regarding materials, data from Vélez-Henao & Pauliuk (2023) indicate that DLS can be provided with 3.27 tons per capita, summed across a variety of material categories, with similar technology to that assumed by Millward-Hopkins. We derive this figure using the published reference scenario and assuming a shift toward renewable energy, vegetarian diets, efficient appliances, multi-family residential buildings, increased wood as a share of construction materials, and 54% of mobility presently provided by private cars shifted to public transit.9 Note that requirements can be reduced further, to as little as 1.9 tons, with additional dietary changes.10 For comparison, we also assess a less ambitious scenario with a 4.74-ton requirement, using the published reference scenario and assuming only a shift toward renewable energy, efficient cooking appliances, and 27% of mobility presently provided by cars shifted to public transit. For a population of 8.5 billion, provisioning DLS would therefore require 28–40 gigatons of material per year, representing 29–42% of current global annual material use (which was 95 gigatons in 201911).

These results are illustrated in Fig. 2, Fig. 3 and compared to current global energy and material use, which represents energy and materials that are processed into final uses, real goods and services, buildings, and infrastructure, and therefore serves as a useful proxy for productive capacity. This demonstrates that global poverty can be eliminated and decent-living standards can be extended to all with a modest share of existing global productive capacity, and less energy and materials than the global economy presently uses, if production is organized around this objective. This leaves substantial surplus that can be used for various purposes: for additional public luxury, recreational facilities, technological innovation, scientific and creative advancement, and increasing the DLS threshold (for instance with additional housing space, more computers, etc). To illustrate, the level of development represented by DLS can be multiplied by a factor of three and still extended to everyone in 2050 within existing global capacity (see Fig. 2, Fig. 3).

Of course, it is reasonable to allow for some degree of inequality in the distribution of real resources. Millward-Hopkins estimates that a distribution consistent with public preferences (“fair inequality”) requires allocating an additional 40% on top of DLS requirements. This would entail total global requirements of 175 EJ of energy and 39 gigatons of materials (see Fig. 1, Fig. 2), which is still well within existing productive capacity, and still leaves a large surplus that can be used for additional consumption and other social investments. Note that future technological developments between now and 2050 (and beyond) could make it possible to provision higher living standards with less energy and materials, and this objective should be actively pursued.

The data above indicate that '''ending poverty and ensuring good living standards for all does not require large increases in global aggregate production and throughput'''. It clearly does require substantial industrial development and increased total output in lower-income countries, while in higher-income countries it can be achieved while at the same time reducing less-necessary output. But in all cases – North and South alike – the key is to focus on increasing certain types of production, including by redirecting productive capacities and reallocating energy and materials to different final uses (e.g., to produce housing and healthcare rather than casinos and fast fashion). It also requires deploying and disseminating efficient technologies internationally, including by suspending patents where necessary. Further research is underway to more precisely quantify the energy and material requirements of transitional pathways toward universal decent-living, differentiated by world-system region, with attention to sufficient production corridors (Bärnthaler & Gough, 2023).

Asking how much global GDP is needed to end poverty is not a particularly helpful question. If human well-being is the objective, it is not GDP (aggregate output in market prices) that matters, but specific goods and services, and whether people have access to them. It is not about generic production but the content and purpose of production. To determine what the level of global GDP would be in a transition toward a universal decent-living scenario would require sophisticated modelling. It depends on what sectors are increased and what sectors are reduced, how provisioning systems are changed, the kinds of technologies that are deployed and the uses to which they are put, and it depends on how prices shift under these conditions and related processes such as an increase in the bargaining power of labour and a reduction in unequal exchange between core and periphery. Indeed, precisely because GDP is a fungible indicator, in which real material outputs are measured by something as ephemeral as market prices, it is not a useful tool for assessing how production needs to change in order to end poverty and achieve specific social goals. To answer this question, we need to pay attention to physical production and final use-values, distinguishing between what is important for human wellbeing and what is not."

(https://www.sciencedirect.com/science/article/pii/S2452292924000493#b0340)


=More information=

* DLS minimum requirements (Millward-Hopkins 2022)
** J. Millward-Hopkins. Inequality can double the energy required to secure universal decent living
Nature Communications, 13 (1) (2022), p. 5028

* Global material requirements (Gt) to ensure decent living standards (DLS) for 8.5 billion people in 2050. Based on Vélez-Henao & Pauliuk (2023). DLS-LA is a lower-ambition scenario 
** J.A. Vélez-Henao, S. Pauliuk Material requirements of decent living standards
Environmental Science & Technology, 57 (38) (2023), pp. 14206-14217 [https://pubs.acs.org/doi/10.1021/acs.est.3c03957?]

* N.D. Rao, J. Min. Decent living standards: Material prerequisites for human wellbeing
Social Indicators Research, 138 (1) (2017), pp. 225-244

* N.D. Rao, J. Min, A. Mastrucci. Energy requirements for decent living in India, Brazil, and South Africa
Nature Energy, 4 (12) (2019), pp. 1025-

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