PLEA Network

17 January 2020, The Conversation, Take care when examining the economic impact of fires. GDP doesn’t tell the full story. Estimates of the economic damage caused by the bushfires are rolling in, some of them big and some unprecedented, as is the scale of the fires themselves. These types of estimates will be refined and used to make – or break – the case for programs to limit the impact of similar disasters in the future. Some will be used to make a case for – or against – action on climate change. But it’s important they not be done using the conventional measure of gross domestic product (GDP). GDP measures everything produced in any given period. It is a good enough measure of material welfare when used to measure the impact of a tourist event or a new mine or factory or something like the national broadband network, but it can be misleading – sometimes grossly misleading – when used to measure the economic impact of a catastrophe or natural disaster. Read more here