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Moving Towards a Common Approach on Green Growth Indicators Moving towards a Common Approach on Green Growth Indicators Green Growth Knowledge Platform Scoping Paper GREEN GROWTH KNOWLEDGE PLATFORM Moving towards a Common Approach on Green Growth Indicators A Green Growth Knowledge Platform Scoping Paper April 2013 Green Growth Knowledge Platform The Green Growth Knowledge Platform (GGKP) is a global network of researchers and development experts that identifies and addresses major knowledge gaps in green growth theory and practice. Through widespread consultation and world-class research, GGKP provides practitioners and policymakers with better tools to foster economic growth and implement sustainable development. The GGKP was officially launched in Mexico City in January 2012 by the Global Green Growth Institute (GGGI), Organisation for Economic Co-operation and Development (OECD), United Nations Environment Programme (UNEP), and World Bank. Authorship & Acknowledgements This paper was produced under the GGKP program on Green Growth Measurement and Indicators. The authoring team included staff members from the OECD (Tomasz Koźluk and Ziga Zarnic), GGGI (Hoseok Kim), UNEP (Fulai Sheng, Andrea Bassi, and Markus Lehmann), and the World Bank (Marianne Fay, Kirk Hamilton, Erika Jorgensen, and Glenn-Marie Lange). This conference edition was initially presented at the 2nd Annual GGKP Conference, April 4-5, 2013 in Paris, France. The opinions expressed herein do not necessarily reflect the official views of the GGGI, OECD, UNEP, and World Bank member countries. In addition to numerous colleagues within GGGI, OECD, UNEP, and the World Bank who provided inputs and comments, the authors would like to thank counterparts at the International Labour Organization (ILO) and Convention on Biological Diversity (CBD) Secretariat for their contributions and feedback. 1 Contents I. Introduction ............................................................................................................................................... 3 II. What is the role of measurement in the progress towards green growth and a green economy? ......... 4 a. A production framework can capture the nexus between the economy and the environment ..... 5 b. Standard criteria can help ensure that indicators of green growth/green economy are relevant for policy-making ...................................................................................................................................... 7 III. Converging on a set of indicators .......................................................................................................... 10 An indicator set for monitoring of green growth/green economy ......................................................... 10 a. Natural Asset Base .......................................................................................................................... 10 b. Environmental and Resource Productivity / Intensity .................................................................... 12 c. The Environmental Quality of Life ................................................................................................... 15 d. Policies and Economic Opportunities ............................................................................................. 16 e. The Socio-Economic Context .......................................................................................................... 20 Headline indicators are needed for communication purposes .............................................................. 21 Wealth accounting can complement a dashboard of indicators ............................................................ 24 a. Measuring wealth and what it means for policy ............................................................................. 24 b. The statistical framework for implementation ............................................................................... 26 IV. Outstanding challenges and way forward ............................................................................................. 28 a. Progress towards international harmonisation of definitions and measurement ......................... 29 b. Coping with limited capacity and engaging the private sector ....................................................... 30 c. Practical challenges regarding the construction of indicators ........................................................ 30 d. Transparency is key for appropriate use of GG/GE indicators ....................................................... 34 e. Interpretation and communication challenges for policy-making ................................................. 34 V. Bibliography ............................................................................................................................................ 36 Annex 1: Lists of Indicators Used by the International Organisations (Supporting Section III) .................. 39 GGGI Set of Diagnostic Indicators for assessing country sustainability in green growth planning ........ 39 OECD Green growth indicators and themes ........................................................................................... 41 UNEP indicators for green economy policy making ................................................................................ 43 World Bank framework for measuring potential benefits from green growth policies ......................... 44 2 I. Introduction 1. Green growth and green economy have been subject to various definitions but those currently being used by international organisations have a lot in common. Green growth seeks to fuse sustainable development's economic and environmental pillars into a single intellectual and policy planning process, thereby recasting the very essence of the development model so that it is capable of producing strong and sustainable growth simultaneously (Samans, 2013). It aims to foster economic growth and development, while ensuring that natural assets are used sustainably, and continue to provide the resources and environmental services on which the growth and well-being rely (OECD, 2011). It is growth that is efficient in its use of natural resources, clean in that it minimises pollution and environmental impacts and resilient in that it accounts for natural hazards (World Bank, 2012). Green economy aims for improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities (UNEP, 2011). The concept of green economy rests on the economy, the environment and the social pillars of sustainable development. A broader concept of ‘inclusive’ green growth or sustainable development incorporates fully the social sustainability aspects, in particular enhancing human development and the conditions for the poor and vulnerable. 2. Greening growth (GG) and moving towards a greener economy (GE) is complex and multidimensional. It entails (i) pricing externalities and valuing natural assets for the long-run services they provide and pricing externalities; (ii) innovation as a means of breaking with unsustainable growth paths; (iii) the creation and dissemination of new, more environmentally sustainable technologies, goods, and services; and (iv) sectoral shifts and changes in comparative advantage that inevitably imply winners and losers. If GG/GE is to help move countries towards more sustainable development, the social consequences and local contexts of the transition to a greener economy must be central to managing change. 3. GG/GE policies need solid, evidence-based foundations. Assessing and communicating the need for policies and whether they achieve their stated goals requires proper monitoring of the underlying developments, progress, and potential opportunities and risks. GG/GE indicators can serve to improve the level of debate on GG/GE and inform the wider public. 4. At the 2012 UN Conference on Sustainable Development (“Rio+20”), the Heads of State and Government and high-level representatives recognized the indicators as a necessary means to assess progress towards the achievement of the sustainable development goals, while taking into account different national circumstances, capacities, and levels of development. Green economy has been proposed as a means for catalysing renewed national policy development and international cooperation and support for sustainable development. 1 And the relevant bodies of the UN system were requested to support collecting and compiling integrated and scientifically based information from national sources (UN 2012: The Future We Want). 1 Source: UN Sustainable Development Knowledge Platform website. 3 5. Measuring progress on a complex and multi-dimensional change and identifying relevant indicators are challenging tasks. No agreement exists yet on an analytical framework or a set of indicators to monitor GG/GE. Data for natural capital is notoriously poor and efforts are needed to both collect and harmonise it. Different institutions are relying on different indicators (see Annex 1). Different national circumstances, capacities and levels of development add to the complexity of a common approach on indicators. And no single indicator will suffice to capture the many dimensions on which progress is needed. Yet, from a communication—and policy action—viewpoint, too many indicators can be confusing. Thus, further efforts to converge on an internationally agreed set of indicators are necessary. 6. This report is a first step towards developing a framework to monitor progress on GG/GE and is a joint effort by the OECD, UNEP,
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