International Economic & Environmental Organizations Propose Indicators to Measure Green Growth

On April 4, 2013, the Green Growth Knowledge Platform (GGKP) released the paper, Moving towards a Common Approach on Green Growth Indicators. The GGKP was established in January 2012 by the Organisation for Economic Co-operation and Development (OECD), the United Nations Environment Programme (UNEP), World Bank, and the Global Green Growth Institute (GGGI). The purpose of the GGKP is to address the “knowledge gaps” encountered by policymakers when seeking information on how to best stimulate economic growth which is environmentally sustainable, or “green,” in nature. The forty-six page GGKP paper is intended to foster the development of a coherent set of “green growth indicators” that could be applied to a broad range of countries to generate evidence for policymakers as they make decisions related to the economy and the environment. The paper reflects the following statement in UN General Assembly Resolution 66/288, adopted in September 2012: “[w]e recognize that . . . indicators . . . are valuable in measuring and accelerating progress” toward “address[ing] the themes of a green economy in the context of sustainable development[.]” The resolution was adopted following the UN Conference on Sustainable Development (Rio + 20) in June 2012.

While the GGKP paper lists more than fifty potential green growth indicators ranging from units of energy consumed per capita to the number of patents issued for environmental inventions, the GGKP ultimately endorses the use of a limited group of “headline indicators” for ease of communication. The GGKP paper highlights seven such headline indicators recently developed by the OECD, but notes that these indicators remain a work on progress and are subject to revision. While these seven indicators “are at various stages of usability,” they “constitute a concrete starting point in focusing the [green growth and green environment] measurement debate.”

Following is the list of OECD headline indicators highlighted in the GGKP paper:

“Index of natural resource use”: This indicator would gauge increases or decreases in the country’s natural resource base.

Change in land use and coverage: Changes in land use could be ascertained by the use of satellite aerial photography.

Carbon productivity: Ways to measure this indicator include the calculation of GDP per unit of carbon dioxide emitted.

Non-energy material productivity: This indicator could be measured by looking at GDP per unit of domestic or raw material consumed.

“‘Green’ MFP [multi-factor productivity] measure: Standard MFP is used to measure productivity. While standard MFP tends to omit both environmental inputs such as water, and externalities like pollution, a “green” MFP would account for these factors.

Population exposure to air pollution: This indicator would look at the percentage of the population breathing air polluted with particles smaller than 2.5 micrometers in diameter.

Indicator for environmental policies: The GGPK paper notes that a definition has not yet been developed for this indicator. Challenges include quantifying various environmental policies.

The paper also highlights the role that “wealth accounting” could play alongside green growth indicators to monitor the sustainability of economic policies. Wealth accounting seeks to capture not only income and GDP, but also a country’s utilization rate of resources, including man-made physical developments like infrastructure and buildings.

Finally, the GGKP observes growing interest on the part of investors in obtaining environmentally-relevant information on companies, as well as an increase among private sector actors to voluntarily disclose environmental data.

Written by Cherie Tremaine, GIELR Staff