There is an active debate among policy makers in Canada regarding the focus of macroeconomic policy. While traditional economic models prioritize the expansion of Gross Domestic Product (GDP) to raise living standards, critics argue this approach fails to account for negative externalities such as resource depletion, rising inequality, and carbon emissions. Instead, many ecological economists advocate for the use of the Sustainable Economic Welfare Index (SEWI), which adjusts GDP by factoring in environmental degradation, defensive expenditures, and the distribution of wealth. Table 1 outlines the path of GDP per capita compared to SEWI per capita in Canada between 1980 and 2020.
Table 1: GDP and SEWI per capita in Canada, 1980–2020
| Year | GDP per capita ($ at 2015 prices) | SEWI per capita ($ at 2015 prices) |
|---|---|---|
| 1980 | 30,000 | 32,000 |
| 1985 | 34,000 | 34,000 |
| 1990 | 37,000 | 35,000 |
| 1995 | 39,000 | 33,000 |
| 2000 | 43,000 | 32,000 |
| 2005 | 48,000 | 36,000 |
| 2010 | 50,000 | 39,000 |
| 2015 | 53,000 | 42,000 |
| 2020 | 55,000 | 44,000 |
Proponents of "wellbeing economics" suggest that advanced economies must move away from the growth paradigm entirely, arguing that welfare has decoupled from material expansion. Opponents, however, caution that without economic growth, funding vital public services and clean energy transitions becomes politically and financially unfeasible.
Explain, whether Table 1 supports the view that "sustained economic growth does not automatically translate into improved social and environmental wellbeing".
