How green is your growth? Say it with indicators

Ziga Zarnic, of the OECD Environment Directorate, outlines the importance of establishing a common basis to build and mainstream a green growth measurement framework, and introduces the recent GGKP scoping paper "Moving towards a Common Approach on Green Growth Indicators."  

Getting it right

Let’s first grasp what this is all about - formally: “green growth 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 our growth and well-being rely” (OECD, 2011).  And 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).

It matters

The issues at stake are big. Looking at a few “killer facts”, the world’s population is projected to surpass 9 billion with 70% living in cities by 2050 (OECD, 2012). The water demand is expected to grow by 55% by 2050 (OECD, 2012); leaving about half of the world’s population under severe water stress and about 100 to 200 million affected by floods and other water related disasters on annual basis (OECD, 2012). About one quarter of all agricultural land is highly degraded (OECD-FAO, 2012). Air quality is getting worse – more than half of urban population is affected by poor air quality (611 out of 1100 cities in the WHO database exceed the annual mean PM-10 guideline of 20 µg/m3. Only 11 out of 370 non-OECD cities in the WHO database meet this limit (WHO, 2012)). And the abundance of species has declined by nearly 10 % between 1970 and 2010, and with invading alien species (e.g. up by 76% in Europe since 1970) (Biodiversity loss as captured by MSA - Mean Species Abundance indicator of the intactness of a natural ecosystem, OECD (2012)) .

The costs are mounting too – the economic value of assets at risk from natural disasters is expected to top up $45 trillion by 2050, about three times exceeding the current values (OECD, 2012). And the loss of biodiversity and ecosystem services due to global deforestation already mounts to $2-5 trillion per year (TEEB, 2009, quoted in OECD Environmental Outlook to 2050).

But not all prospects are gloomy, if resources are to be managed well and soon enough. There are clear opportunities arising from green growth. Take for example a global surge in clean energy investment that has increased from over $50 billion to nearly one quarter of a $ trillion per year over 2006-2012. Or consider the unexploited potential of pricing resources and pollution properly, for example, through removal of environmentally harmful subsidies – such as fossil-fuel subsidies that cost about $55-90 billion per year in OECD countries alone, whilst rarely reaching the poorest. A multilateral removal of fossil fuel subsidies would also reduce global emissions by 6%.

Evidence wanted

The verdict is that evidence constitutes the backbone of any decision-making process. In this regard, green growth indicators are like a GPS (Global Positioning System) – a modern tool that guides our way towards a desired destination and alerts us of any roadblocks or congested roads that we should avoid. And it saves us money and time. In a typical GPS operation, at least four satellites must be visible to get an accurate position – likewise, greening growth is a complex and multidimensional process requiring a few indicators. Finally, it is a hurdle to carry too many GPS gadgets along – when rather one accurate, reliable and user-friendly device is what is really needed.

Tools are ready to be used

In 2011, the OECD has established a measurement framework for green growth.  And in the last couple of years, a number of similar initiatives have followed – both in the public and private sectors. The big challenge is how to establish a common basis to build and mainstream a green growth measurement framework, avoiding hurdles and facilitating the application of indicators in countries.

Making tracking cheap and easy

 The good news is that international organisations – GGGI, OECD, UNEP and the World Bank – have pulled together their expertise to make monitoring a cost-effective practice. At the 2nd GGKP conference last April, the first jointly produced GGKP paper “Moving towards a Common Approach on Green Growth Indicators” was launched by these four organisations under the auspices of the Green Growth Knowledge Platform. This document proposes one step closer to a common basis for measuring progress towards green growth.

It is worth looking at this document in its entirety, but here is a flavour: “It argues that while there is no single green growth model and each country needs to tailor its own strategies, the following areas are central to monitoring progress towards green growth:  

Back in 2009 when governments asked the OECD to develop tools to support policy analysis and monitor the progress of green growth strategies, it became clear that green growth is not easily captured by a single indicator. In this vein, each of these areas entails a set of markers on a path to greening growth and seizing new economic opportunities. It is a practical way of alerting to pressing issues where action and responses are needed.

So, let’s use them!

Green growth indicators have already been used by several countries  – both OECD as e.g. the Netherlands and Korea as well as in other regions of the world, e.g. in Latin America and the Caribbean. The work on indicators has solicited the exchange of good practices among countries. The indicators were seen as useful for supporting strategic planning, assessing environmental impacts in a holistic way, and understanding the origins of downward risks for economic development. In turn, putting indicators to use also helps to improve them.

Some of the key challenges with measurement, interpretation and implementation of indicators in practice have already been spotted in the GGKP paper mentioned before. This is mutually useful for triggering applied research and feeding its findings back to policy and corporate worlds. And hopefully, this will keep them alive in the minds of those who can make the change happen.

Related links:
Green Growth Knowledge Platform 
Moving towards a Common Approach on Green Growth Indicators 
OECD work on green growth indicators 
OECD work on green growth