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Adjusting the Green Economy Progress Measurement Framework

Accelerating the recovery through the transition towards climate-neutral economies

Recent major shocks have caused a setback to inclusive green economy trajectories – advance the preliminary results of the Third Edition of the Green Economy Progress Measurement Framework (GEPMF) – but massive investments for limiting Global Warming to 1.5°C can lead to higher inclusive green economy progress.

PAGE conducted a consultation workshop on 26 April to unveil the preliminary findings of the third edition of the GEPMF to be released in 2023. PAGE has partnered with Cambridge Econometrics to produce the Third Edition, which aims to capture the impact of recent major shocks, such as the war in Ukraine and the COVID-19 pandemic, on the transition towards an Inclusive Green Economy (IGE).

The consultation workshop brought together over 40 experts and Inclusive Green Economy (IGE) practitioners – from World Bank, Global Green Growth Institute, UNEP FI, PAGE Agencies (UNEP, UNDP, ILO, UNIDO and UNITAR), think tanks from the Global South and governmental representatives from PAGE Funding Partners. The GEPMF provides practical guidance to policymakers on how to formulate and assess policies, measure progress and model future effects of the IGE transition.

It was a unique opportunity to discuss and receive feedback on the scope, and preliminary results as well as on the strengths and potential avenues to consolidate this analytical exercise as a key tool to identify IGE priorities and recommend a set of policy and investment options for accelerating the net-zero transition and recover from recent events, notably, from the effects of War in Ukraine and the COVID-19 Pandemic.

What’s is new in the Third Edition?

This Third Edition aims at:

  • quantifying the IGE transition pre-covid 19 and how recent major shocks to the world economy – such as the war in Ukraine and the COVID-19 Pandemic – have impacted the IGE trajectories of over 100 countries,
  • adjusting the framework to better inform on progress and entry points to reframe the economy and connections to SDGs target,
  • upgrading the methodology by linking the Green Economy Progress Index with a macro-econometric model, the E3ME model, for not only evaluating the IGE transition backward looking but also for forecasting future IGE trajectories until 2050. This is done by developing an “adjusted Green Economy Progress index (GEP index)” and,
  • assessing the impacts of policy and investment options on the IGE trajectories – for accelerating the net-zero transition while recovering from recent major shocks.

 

An economic transformation - which is aligned with the 2030 Agenda for Sustainable Development - needs time, an enabling policy environment and finance. The 3rd Edition of the Green Economy Progress Measurement Framework serves not only to monitor progress towards a green economic transformation but it also helps to identify priority areas for government interventions.

Portrait photo of Ronal Gainza
Ronal GAINZA, Economic Affairs Officer, PAGE Secretariat, Report Manager

How was the IGE transition pre-COVID 19?

Until 2019, the analysis showed important improvements in the inclusive green economy, although with sustainability challenges. The higher average GEP index was explained by the progress on the indicators measuring energy use, life expectancy, gender inequality, access to basic services and education. Notice almost no progress on average for renewable energy. On the other hand, material footprint was the only indicator experiencing regress on average.

The left panel Figure below shows that distribution of the GEP Index has moved towards the right, indicating that more recent data shows a higher number of countries experiencing progress. For PAGE countries, the right panel figure below shows that most countries experienced progress. Important to highlight the case of Uruguay, who was able to achieve the highest progress (positive GEP index), by presenting a significant improvement in its material footprint.

GEP INDEX RESULTS

The innovation of the 3rd Edition of the Green Economy Progress Measurement Framework of connecting the GEP index with the E3ME model reinforces their usefulness for policymaking, because it allows both synthetizing and compering scenarios results. I hope that this will be an effort sustained over time, and that it will be incorporated in future country applications of PAGE indicators and modeling work.

Portrait photo - Jose PINEDA, Senior Advisor DevTech Systems and Senior Consultant PAGE, Co-lead Report Author
Jose PINEDA, Senior Advisor DevTech Systems and Senior Consultant PAGE, Co-lead Report Author

How to limit Global Warming to 1.5°C through IGE investments despite recent shocks?

Global shocks – e.g., COVID-19 pandemic and the recent conflict in Ukraine – have caused a new economic reality for the world. A reality in which economic recovery is once more in the crosshairs of policy makers. However, the how of economic recovery and progress can significantly influence our common future.

In this report, the modelling – carried out with the E3ME macroeconomic model – of a global “Green Push” scenario, aiming for limiting global warming to 1.5°C, through investment into a variety of decarbonization measures globally, can bring just as much economic progress than ramping up investments following the current global economic structure. Meanwhile, it can also bring enormous benefits by reducing global CO2 emissions by 40% compared to the baseline. Nevertheless, without targeted just transition policies, it might bring less positive employment results than investing into the current economic structure might do. Key preliminary macro results are shown in the charts below.

The modelling shows that investing in decarbonization could be worth it in an economic sense and necessary from an environmental perspective, but policymakers have to pay attention to the distributive effects of the process and make sure that the transition is not just green, but globally inclusive.

Portrait photo - Bence KISS-DOBRONYI, Senior Economist, Cambridge Econometrics
Bence KISS-DOBRONYI, Senior Economist, Cambridge Econometrics, Co-lead Report Author

How is the IGE transition impacted by recent shocks and the Net-zero scenarios?

The Covid-19 pandemic represented an important setback on the previous IGE progress (until 2019). The results from the “adjusted” GEP index to achieve articulation with the E3ME model shows a significant decline in most of the indicators, and the overall index due to the Covid-19 pandemic and the war in Ukraine. Preliminary results induce that:

  • Baseline and status quo scenarios present no actual progress, just lower regress.
  • The green push scenario illustrates how policies can contribute to an economic transformation that leads to higher inclusive green economy progress. However, there is a short-term trade-off across scenarios, where the base and status quo scenarios present better results in the short-term, but the 1.5C scenarios present higher medium-term progress. This trend is applicable for both the 58 countries included in the modelling exercise and the 7 PAGE countries analyzed here, namely, Argentina, South Africa, Indonesia, China, India, Brazil and Kazakhstan. See charts below.
  • On IGE indicators, there is significant progress in reducing GHG emissions, pollution, improving energy efficiency and labor productivity. However, there are still challenges on inequality and material footprint.

Finally, despite the efforts made in this third edition to integrate the GEP index into the E3ME model, the current version of the “adjusted GEP index” used in this exercise uses a limited number of indicators. Future editions can pay a special attention to it and overcome this challenge by integrating more inclusive green economy indicators.

Resources related to GEPMF

  1. Preview of GEPI and Modelling Consultation Workshop – Presentationpdf

    GEPI and Modelling Consultation Workshop – Presentation

    2023
  2. Preview of Consultation Workshop GEPMF – Muralpdf

    Consultation Workshop GEPMF – Mural

    2023
  3. Preview of Indicators for an Inclusive Green Economy – manual for advance trainingpdf

    Indicators for an Inclusive Green Economy – manual for advance training

    2020
  4. Preview of Green Economy Progress Measurement Framework Methodologypdf

    Green Economy Progress Measurement Framework Methodology

    2017
  5. Preview of Green Economy Progress Measurement Framework Applicationpdf

    Green Economy Progress Measurement Framework Application

    2017
  6. Preview of Green Economy Progress Measurement Framework Application – Second Editionpdf

    Green Economy Progress Measurement Framework Application – Second Edition

    2021

Country Applications

  1. Preview of South Africa Green Economy Progress Measurement Frameworkpdf

    South Africa Green Economy Progress Measurement Framework

    2020
  2. Preview of Indonesia Green Economy Indexpdf

    Indonesia Green Economy Index

    2022
  3. Preview of Jiangsu and Fujian Province Green Economy Progress Measurement (2015-2017)pdf

    Jiangsu and Fujian Province Green Economy Progress Measurement (2015-2017)

    2020

PAGE & Tools for Policymakers

PAGE developed this tool for policymakers, analysts and other stakeholders to gain understanding on how green economy is progressing in their respective country. The Green Economy Progress (GEP) Measurement Framework helps countries evaluate their overall progress towards
 an Inclusive Green Economy and to enable a cross-country comparison of progress. The GEP Measurement Framework complements UN Environment’s previously developed green economy indicators framework (UNEP, 2012; UNEP, 2014; and UNEP, 2015), which uses several types of indicators at different stages of a typical policymaking cycle.

The first edition of the GEPMF (methodology and application), launched in 2017, proved to be a valuable tool for policymakers, analysts, and stakeholders to measure the progress of 105 countries towards IGE. The second edition, released in 2021, introduced the concept of environmental footprints and was applied to a sample of 110 countries to measure the impact of national consumption and production patterns. Considering recent global disruptions such as the COVID-19 pandemic and the war in Ukraine, an updated version of the GEPMF is necessary to provide a more accurate assessment of progress.

The Partnership for Action on Green Economy (PAGE) has grown into a prominent alliance of five UN agencies, 8 funding partners, and 22 partner countries that work together to transform economies into drivers of sustainability by supporting nations and regions in reframing economic policies and practices around sustainability.

 

Source: PAGE

Funding Partners

  • European Commission
  • Ministry for Foreign Affairs of Finland
  • Swiss Confederation Federal Department of Economic Affairs FDEA State Secretariat for Economic Affairs SECO
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