Moving Beyond GDP: Why Nature Must Be at the Heart of Economic Progress

In his recent Nature article, “To move beyond GDP, don’t ignore ecological economics,” Dr. Kumar highlights a growing global consensus: economic success can no longer be defined by output alone. Instead sustainable development will only be achieved when governments base decisions on human skills and natural resources, not just gross domestic product.

The limits of GDP

For decades, GDP has served as the dominant measure of economic progress. While it captures the market value of goods and services, it overlooks critical dimensions of prosperity, particularly the condition of the environment and the sustainability of growth.

Kumar argues that this narrow focus has led policymakers to prioritise short-term gains, often at the expense of ecosystems, biodiversity and long-term resilience. This disconnect means that even as economies grow, the underlying “assets” that support life (clean air, fertile soil, stable climates) are eroded.

The result is a misleading picture of prosperity, where rising incomes can mask declining natural wealth and weakening foundations for future wellbeing.

Pushpam Kumar, Chief Environmental Economist at UNEP

Reframing progress through ecological economics

At the heart of Kumar’s argument is ecological economics, a field that integrates environmental realities into economic thinking. Recognising that economies are embedded within nature, not separate from it, and that sustainable prosperity depends on maintaining this relationship.

This approach emphasises the concept of natural capital: the stock of ecosystems that provide essential services such as pollination, water purification, climate regulation and disease control. These services underpin economic activity but are often undervalued or entirely absent in traditional accounting systems.

By incorporating natural capital into decision-making, ecological economics offers a more complete and realistic assessment of wealth, one that aligns economic policies with planetary boundaries.

Towards inclusive measures of wealth

Kumar advocates for a transition towards broader metrics such as inclusive wealth, which accounts for produced, human and natural capital together. These measures provide a more accurate picture of whether societies are truly becoming more prosperous over time.

This shift is not simply technical, it is transformational. It changes how governments design policies, how businesses assess risk, and how institutions evaluate success. Crucially, it brings sustainability and intergenerational equity to the centre of economic decision-making.

There is already growing momentum behind this agenda. Countries and international organisations are increasingly exploring ways to integrate environmental accounting and wellbeing metrics alongside GDP. Yet, as Kumar notes, ensuring that these approaches are grounded in robust ecological-economic thinking will be essential for their success.

For the Bennett Institute, this work resonates strongly with our mission to advance new approaches to economic measurement and policy innovation. It underscores the importance of interdisciplinary thinking and the need to bridge economics, environmental science and public policy.

As Kumar argues, moving beyond GDP is not about discarding economic growth, it is about redefining it. Sustainable development will depend on recognising that human prosperity is inseparable from the health of the natural world.

Looking ahead

The challenge now is implementation: translating new metrics into action, embedding them in national accounts, and using them to guide decision-making at all levels.

Kumar’s message is clear. If societies are serious about achieving sustainable development, they must move beyond GDP. But in doing so, they must not overlook the insights of ecological economics that make such a transition meaningful and effective.