#11. New Zealand: an important opportunity

stories • Published October, 2021

New Zealand’s rank on the Happy Planet Index in 2019: #11. Explore the data.

By: Conal Smith

New Zealander’s wellbeing is high relative to our impact on the planet

The Happy Planet Index (HPI) illustrates how well different countries do in terms of achieving a high level of wellbeing with a minimal impact on the planet. Compared to many other countries, New Zealand does well. We rank 11th best in the world, with an HPI score of 57.4. For comparison purposes, the best performing country in the world – Costa Rica – has an HPI score of 62.1 New Zealand’s most recent result is an improvement on the last time the index was updated in 2016 when we ranked 12th.

This stands in stark contrast to many of the countries with which New Zealand usually compares itself. Australia sits at 88th place, with an HPI score of 43.1, while the United Kingdom is somewhat closer at 14th place with an HPI score of 56. New Zealand’s current position also stands in contrast to the 2000s, when New Zealand placed significantly worse (25th in the world in 2010).

What is driving New Zealand’s progress?

The main factor is that New Zealand’s ecological footprint – the annual quantity of natural resources required to support each New Zealander– has fallen consistently since 2016, while our wellbeing has remained steady.

Put simply, we are achieving the same level of wellbeing each year with a progressively smaller impact on the planet.

Our declining ecological footprint, in turn, appears to be mostly driven by falling carbon emissions per capita.

The way forward

While New Zealand is doing well in terms of global rankings, we cannot afford to rest on our laurels. Our falling resource use on a per capita basis conceals the fact that our total carbon emissions are not declining at anything like the same rate. In fact, our total gross carbon emissions have been roughly stable over the past decade, and most of the gains have come from a fairly narrow range of changes (particularly land use shifting from agriculture to forestry). This alone, is not a viable future path.

An important opportunity

However, the improvement in New Zealand’s HPI score over the past decade highlights an important opportunity.

It is possible to reduce our ecological footprint without reducing wellbeing.

Taking actions to reduce our ecological footprint – such as cutting carbon emissions – doesn’t have to make us worse off in any way that actually matters to people. In fact, the improvements in the HPI over the last five years suggest we could act faster and go further in reducing our impact on the planet without reducing wellbeing.

A clear policy focus on wellbeing – such as that embedded in the New Zealand Treasury’s Living Standards Framework – should, in principle, support such changes. The challenge will be to assemble the social and political will to ensure that this happens in practice.

About the author

Conal is a Wellington-based economist with interests spanning the economics of well-being, valuing intangible costs and benefits, social capital and trust, the behavioural drivers of economic outcomes, and social policy more generally.

He led the development of the first international guidelines on the measurement of subjective wellbeing (2013) and trust (2017) as well as the OECD’s first well-being themed country report. Conal has worked on the policy applications of well-being measures in New Zealand, the OECD, and the developing world. In 2014 he co-taught the first formal course in wellbeing economics at Sciences Po in Paris.

Conal is currently a member of the World Wellbeing Panel and a senior associate at the Institute of Governance and Policy Studies. He has worked as a senior economist at the OECD and in managerial and senior policy roles in a range of different New Zealand government agencies.