Beyond GDP: towards a green economy index

Abstract

Worldwide, there is increasing recognition of the need for countries to pursue a "green economy". Given the broad (economic, social and environmental) objectives of a green economy, and the limitations associated with mainstream measures of economic growth (such as gross domestic product), an alternative or expanded set of indicators is required for measuring progress toward a green economy. Ideally, these indicators should be comprehensive enough to reflect the broad objectives of a green economy; but at the same time be presented in such a way that is easily understood and communicated, and useful to policy makers. This paper aims to address these needs by developing a composite index for measuring overall progress toward a green economy, based on twenty-six indicators reflecting green economic principles and criteria across the economic, social and environmental dimensions. The index will enable comparison of a country¿s green economic performance both over time and relative to other countries. Furthermore, the index is constructed in such a way as to allow for disaggregation, i.e. for scores on individual components to be seen at a glance, such that areas of specific concern can be easily identified and addressed, and progress in each area monitored over time. The index was tested on data from 193 countries, and the resulting country rankings assessed.