Measuring sustainable development: the promise and difficulties of implementing Inclusive Wealth in the Goulburn-Broken Catchment, Australia

A difficulty in measuring sustainable development is integrating measures of its key components (environment, economic, and social) in a way that allows comparison and assessment of tradeoffs and communication of results. This article presents a trial implementation of a sustainability measure called Inclusive Wealth. We do this by constructing an experimental model to estimate sustainable development through the measurement of capital stocks (built, human, natural, and resilience) in the Goulburn-Broken Catchment in Australia. By trialing the model over the period 1991–2001, we address practical issues associated with identifying capital stocks, estimating shadow prices, addressing risk, assessing intragenerational equity, and dealing with price changes. Results are presented as the basis for discussing hurdles to the implementation of regional sustainability measures and for highlighting outstanding theoretical and methodological issues that need resolution for sustainability measures to become a practical policy tool.