Denmark in need for a Wellbeing Economy: 11 Key Points from Economists and Scientists

Denmark is at a cross-road where there is an increasing need to transition the economy to a more sustainable and human-centered model — a wellbeing economy. Prominent economists and researchers argue in a joint declaration, that our current economic system can no longer maintain the balance between economic growth and human wellbeing. They also aim to highlight the necessity for a national strategy to transition to a wellbeing economy – 👀the Wellbeing Economy Lab (WELA).

Their thoughts are presented in an article from Politiken (May 2024), and it was highlighted that six of the nine planetary boundaries have already been exceeded, emphasizing the urgent need to shift our economic system to one that prioritizes environmental sustainability and human wellbeing. The article argues that the current economic model, focused heavily on GDP growth, is insufficient and even detrimental to the long-term health of our planet and societies.

Why a Wellbeing Economy?

In recent decades, the world has seen a significant rise in production and consumption, lifting many out of poverty. However, this has also led to severe environmental and social problems. In Denmark, we face pressure on our nature, biodiversity, and water environment, as well as rising dissatisfaction, especially among the youth. The current trajectory is unsustainable—both environmentally and socially.

A New Direction for the Economy – 11 Key points

The economists and scientists argues that we need an economic transition that prioritizes human wellbeing and environmental sustainability. Two schools, ‘green economists’ and ‘wellbeing economists,’ have proposed pathways for this transition. Green economists focus on environmental and climate economics, while wellbeing economists emphasize the need to address fundamental human needs within the planet’s limits.

Key Points

1. The Economic System is Human-Made: It can be redesigned to meet current challenges.
2. Economy is About People and Resource Management: It’s not just about money; how resources are managed is crucial.
3. Setting Physical Boundaries is Essential: Complex realities require limits on environmental impact, similar to the Paris Agreement.
4. Sustainability Goes Beyond Climate Change: Nine global systems are critical, including biodiversity, freshwater, and chemical pollution.
5. GDP Growth Hasn’t Increased Wellbeing in Denmark: Despite economic growth, issues like mental health and loneliness have risen.
6. A Wellbeing Economy Sets Clear Goals: The aim is to support good lives within planetary boundaries, not just economic growth.
7. Meeting Fundamental Human Needs: Physical, mental, and social needs must be addressed simultaneously.
8. Multidimensional Wellbeing Measures: Use both subjective and objective indicators to assess wellbeing.
9. Future Wellbeing Depends on Environmental Care: Exceeding planetary boundaries causes irreversible damage.
10. Reduce Material Consumption Without Lowering Life Quality: High quality of life in Denmark relies on heavy material use and high carbon emissions.
11. Research Supports Feasibility: Solutions like sustainable public procurement and building regulations can enhance wellbeing and reduce emissions significantly.

Implementing Wellbeing Economies: Insights from Iceland and Finland

A report from WHO, The WHO Regional Office for Europe’s 2023 report, highlights how Iceland and Finland are leading the way in integrating wellbeing into their economic frameworks. These countries provide concrete examples of how to transition towards a wellbeing economy.

Finland’s Approach:

• Wellbeing as Welfare: In Finnish, wellbeing is synonymous with welfare. The approach builds on the concept of “having, doing, loving, and being,” recognizing the interdependency between social, economic, and environmental sustainability.
• Policy Focus: Finland reframes its traditional welfare state to protect both people and the planet. Policies promote inclusivity in the labor market, income security, and long-term financial sustainability amidst an aging population. Notably, Finland is developing a wellbeing economy indicator system to better capture these dimensions.

Iceland’s Approach:

• Holistic Wellbeing: Iceland views wellbeing as a holistic concept that includes subjective and objective measures such as feeling well and having the necessary capabilities to function well in society. The comprehensive wellbeing measurements in Iceland link wellbeing directly to societal, economic, and environmental factors.
• Policy Focus: Following the 2008 financial crisis, Iceland returned to a Nordic welfare model emphasizing environmental protection and social equity. Policies focus on youth employment, sustainable work-life balance, and gender equality. Iceland’s approach is closely tied to the Sustainable Development Goals (SDGs).

OECD’s Role in Wellbeing Measurement

The OECD has also been instrumental in advancing the measurement of subjective wellbeing, including indicators like life satisfaction, affective states, and eudaimonia. An OECD conference on 4 March 2024, discussed how these measures, particularly focusing on children and youth wellbeing could be improved. The OECD emphasizes the importance of integrating these indicators into policy development to ensure that economic policies promote overall wellbeing and sustainability. Read more on the OECD conference New Frontiers in Subjective Well being Measurement and the publication Subjective Well-Being Measurement: Current Practice And New Frontiers.

The Path Forward for Denmark

Drawing from the experiences of Iceland and Finland, Denmark can move towards a wellbeing economy by:

1. Developing National Wellbeing Indicators: Implementing measures that capture both subjective and objective aspects of wellbeing.
2. Incorporating Wellbeing into Policy Development: Ensuring that all policy proposals are evaluated based on their impact on wellbeing and sustainability.
3. Enforcing and Monitoring Wellbeing Goals: Establishing mechanisms for accountability and progress towards national wellbeing targets.

Conclusion

Denmark must embrace a wellbeing economy to secure a balanced and sustainable future. By adopting comprehensive wellbeing measures and integrating them into national strategies, Denmark can lead the way in creating a thriving society that harmonizes economic growth with human and planetary wellbeing.

For further insights, visit the Wellbeing Economy Lab (Wela) and read the full article on Politiken: Six of the Nine Planetary Boundaries are Already Exceeded.

Denmark Should Lead the Way

While many OECD countries are already working towards a wellbeing economy, Denmark is lagging. The Danes need to catch up with their Nordic neighbors and other comparable countries. A national strategy and action plan is the first step towards a sustainable future where economic growth does not come at the expense of human wellbeing and environmental sustainability.

Our forthcoming, “Nordic Insights”, will delve further into aspects on sustainable development, and perhaps present some data and statistics on the wellbeing economy! 🌍💚📊🌱

Stay tuned!

Torfi and Ulla