Case Study: The Global Green Economy Index, 2014
First Released: 2010
Intended Audience: Governments, Businesses and Investors
Potential Application: Investors seeking to make international green economy investment decisions; countries seeking to understand how their environmental performance is perceived internationally, and improve where appropriate
Developer: Dual Citizen, a consulting firm based in the United States
This is an update to the IIP of the 2012 Global Green Economy Index.
The green economy has become an important organizing principle in understanding how society responds to environmental challenges like local air and freshwater pollution, biodiversity loss, and climate change. In tracking the ways the economy internalizes environmental impacts, we can begin to see the ways that trade will play a role in protecting resources, not just consuming them.
The 4th edition of the Global Green Economy Index (GGEI) assesses 60 countries and 70 cities across measures of green economic performance, including energy efficiency, climate leadership, and cleantech investment. The GGEI also tracks widespread perception of how each country is performing by surveying practitioners within each thematic area of the GGEI. Dual Citizen, a US-based strategic communications consultancy, produces the GGEI. Its latest edition is an expansion of its previous release (2012), which only covered 27 countries.
The performance portion of the GGEI is based on 32 indicators across 4 broad areas: Leadership & Climate Change, Efficiency Sectors, Markets & Investment, and Environment & Natural Capital. The indicators are a mix of qualitative and quantitative measures, drawn from a combination of data sources. Qualitative indicators are based on surveys administered and assessed by Dual Citizen. Quantitative measures are drawn from a mix of public and private datasets, including International Energy Agency and World Bank transport and energy data, and the WWF Cleantech Group Global Cleantech Innovation Index.
The Efficiency performance measurement was expanded in the latest edition to include sectors beyond tourism, delivering a much more thorough analysis than the last installment. Additionally, this indicator now includes quantitative assessments based on international datasets, rather than solely a proprietary qualitative assessment. The quantitative datasets do not necessarily measure ‘Efficiency’ in its truest sense, as efficiency in energy is not solely represented by percentage of electricity from renewables. Moreover, renewables in electricity supply and renewables in overall energy supply are slightly different challenges. Clarification in these discrepancies would improve the Index.
One of the most significant changes to the current edition of the GGEI is its addition of 2014 Environmental Performance Index (EPI) data. The newest edition incorporates several areas of EPI data into its Environment & Natural Capital indicators, pulling data from the EPI’s indicators for Agriculture, Air Quality, Biodiversity & Habitat, Fisheries, Forests, and Water.
Interestingly, the use of the term “natural capital” is only metaphorical, as the Index neither represents “stocks” of natural capital related to each indicator, nor examines the economic valuation of a country’s natural capital. The Index represents a notable effort to analyse environmental performance and the green economy, incorporating measures of actual environmental performance alongside indicators of markets, climate change action, political leadership, and energy efficiency. There could be greater analysis of the interactions between these different elements of the GGEI. Such analysis may be available to those clients who subscribe to the GGEI or engage with Dual Citizen as consultants, as per Dual Citizen’s funding and delivery model as publishers of the Index.
The new GGEI also extends its analysis to cities, including first-time perception-survey results for 70 cities. A gap score is calculated, indicating the interaction between a city’s green reputation and its national one. The findings illustrate that there are cases where one particularly well-regarded city is driving the country’s wider reputation (ie: Copenhagen, Denmark), especially with regards to smaller nations. There is not enough available data to compare city performance and perception, but it is interesting to compare where the perception of a city’s performance may be driving wider national trends.
Perception versus performance
The second part of the Index aims to quantify the perception held by expert practitioners of countries’ Green Economies, based on surveys administered by Dual Citizen. Survey respondents were asked to assess how they perceived green economy performance in every country in the Index, with hopes of capturing how national and municipal ‘green brands’ are perceived and to measure how international perceptions of ‘greenness’ match up to actual performance.
Australia’s perception scores are considerably higher than its national performance, especially with regards to Leadership & Climate Change. This difference may be due to the drastic change in policy under the coalition government, which may not have influenced perceptions practitioners as strongly as they influenced the Climate Change & Leadership performance indicator. By comparison, Ireland’s perception scores are much lower than those of its performance. This may be due to difficulties in the Eurozone or policies that leave little room for funding ‘green branding’ efforts.
The juxtaposition of performance and perception scores may be of interest to a casual user of the GGEI, but it seems of most relevance to policymakers within each country profiled. The Index would benefit from further analysis of how performance does, or does not, seem to drive changes in perceptions and a more in-depth exploration of the interactions between performance and performance perception. As previously, this may be available to subscribed users of the GGEI.
Methodology: room for improvement on clarity
While it is a significant effort at trying to outline the Green Economy, the GGEI’s shortcomings tend to arise from a lack of transparency. The Index would benefit from clarification of the methodology of certain indicators. The Green Investment Facilitation and Efficiency in Tourism indicators are based on in-house qualitative data and the Leadership & Climate Change indicator is based on Dual Citizen’s analysis of Google Analytics. These represent novel approaches to overcoming existing gaps in metrics, and for that reason, it is all the more vital to build an understanding of how to develop them.
The performance indicators for Markets & Investment focus on cleantech and renewable energy, falling short of capturing the full extent of the green economy. The cleantech indicator, for example, largely covers early-stage investment in emerging technologies, which is likely to be stronger in countries with established centers of investment and Research & Development. For Leadership & Climate Change, GGEI’s qualitative measures are based on Google Trends analysis, which in some ways represents another kind of perception-based assessment of performance. This slightly blurs the lines between the perception and performance metrics. There are limitations on the extent to which this measure can genuinely assess leadership performance on these issues.
The GGEI’s survey methodology has an inherent bias through its limited geographic coverage. Survey data is skewed towards North America, where a majority of respondents live. Europe is home to the second most respondents. This bias leads to undervalued perceptions from countries that do not have strong English-language media. The bias is only accentuated by the use of English-language Google Analytics data. Continuing to expand the survey-respondent base will important to ensure accuracy and relevance of perception data.
The GGEI may also be skewed in how it defines performance indicators. For instance, the proxy indicator for ‘buildings’ under energy efficiency is ‘total LEED certification in gross square meters.’ While the LEED system is undoubtedly popular internationally, a number of countries have other sustainable building certification systems (such as BREEAM in the UK, which actually predates LEED, and CASBEE in Japan). Gross levels of real estate under LEED certification preferences less densely populated countries where new developments may cover larger areas for the same property value.
The 5th edition of the GGEI will be published in the fall of 2016. It is likely that the Index will be extended to cover more countries, and to continue to provide unique comparisons between perceptions and performance.