Integrating social, environmental and economic dimensions into a monitoring framework Maria Martinho [email protected].

Integrating social, environmental and economic dimensions into a

monitoring framework

Maria [email protected]

Summary

• Context• What do data tell us about the integration of the

three dimensions of sustainable development?• Indicators/measures to monitor sustainable

development• Inequality measures• Conclusion

Context

Rio+20, HLPGS, post-2015 discussions

• Increasing interest in having sustainable development at the core of development

• Need to integrate the social, economic and environmental dimensions of development

What do data tell us about the integration of the social, economic and environmental dimensions of development?

Illustrative example: HDI versus Ecological footprint

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0

Ecological Footprint (global hectares per capita)

Hu

ma

n D

ev

elo

pm

en

t In

de

x

Earth's biocapacity (2.1 hectares per person)

High human development

(HDI>0.8)

CLOSER TO SUSTAINABLE DEVELOPMENT

Countries with low ecological

foortprint tend to have low HDI

Countries with high HDI tend to have high environmental impact

HDI versus Ecological footprint• So far, in most countries, there has been a trade-

off between socio-economic development and environmental protection

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0

Ecological Footprint (global hectares per capita)

Hu

ma

n D

ev

elo

pm

en

t In

de

x

Earth's biocapacity (2.1 hectares per person)

High human development

(HDI>0.8)

CLOSER TO SUSTAINABLE DEVELOPMENT

Countries with low ecological

foortprint tend to have low HDI

Countries with high HDI tend to have high environmental impact

Is it possible for countries to reach higher levels of social development while keeping a sustainable environmental impact?

HDI versus Ecological footprint• Some countries have succeeded in moving higher

up in the HDI while keeping within a sustainable ecological footprint

Peru

0

0.2

0.4

0.6

0.8

1

0 0.5 1 1.5 2 2.5

Ecological footprint

HD

I

20052000

19951990

19851980 1975

HDI versus Ecological footprint• And others have succeeded to move to a lower

ecological footprint while keeping high levels of HDI

Germany

0

0.2

0.4

0.6

0.8

1

0 1 2 3 4 5 6 7

Ecological footprint

HD

I2005 2000 19951990

19851980

What measures can make the inter-linkages between the socio-economic and environmental dimensions visible?

• Indicators/measures to monitor sustainable development should:

– Permit to visualize the environmental implications of socio-economic activities and the welfare implications of imbalances and changes of ecosystems

• to promote synergies and avoid trade-offs favouring one dimension over the others

– Reflect the complexity of sustainable development in its multiple dimensions

• but be simple and user-friendly for policy makers

Integrating the 3 dimensions• Indicators on the three dimensions of sustainable

development

Environmental indicators

GHG emissions

Land degradation

Water

Forests

etc

Social indicators

Health

Education

Hunger

Shelter

etc

Economic indicators

Income

GDP

Debt

Productivity

etc

Integrating the 3 dimensions• Indicators that reflect impacts on all 3 dimensions

– eradicating hunger• Social: food security

– MDG 1.8, prevalence of underweight children– MDG 1.9, population below a minimum level of dietary energy

consumption

• Economic: efficient use of water and land– Agricultural output per unit water consumed (CSD indicator), but

data are scarce

• Environmental: decreased environmental degradation and waste, in food production and consumption– Amount of food waste (FAO)– Use of agricultural pesticides (FDES indicators)

Integrating the 3 dimensions• Another example:

– sustainable energy for all• Social: energy access

– Energy use per capita (IEA)– Share of households without electricity or other modern energy

services (CSD indicator; collected in household surveys), but data are scarce

• Economic: energy efficiency– Energy use per $1000 GDP (IEA)

• Environmental: use of renewable and clean sources– Renewable as % of total (IEA)– % of population using solid fuels (WHO)

Integrating and balancing the 3 dimensions

Social indicators

Health

Education

etc

Economic indicators

Income

Employment

etc

Environmental indicators

GHG emissions

Land degradation

etc

Social summary measure

Economic summary measure

Environmental summary measure

Integrating the 3 dimensions• Summary measures to provide an overall picture of what

happens in social, economic and/or environmental dimensions– GDP

– Human development index

– Ecological footprint, environmental performance index, living planet index

– etc

Integrating and balancing the 3 dimensions

Social indicators

Health

Education

etc

Economic indicators

Income

Employment

etc

Environmental indicators

GHG emissions

Land degradation

etc

Social summary measure

Economic summary measure

Environmental summary measure

How to integrate them?

Integrating the 3 dimensions

Country Env Soc Eco

X 0.1 0.5 0.9

Y 0.4 0.5 0.6

• Measures that favour synergies and penalize trade-offs

– Many summary measures do not penalize trade offs

• methodology for aggregation: simple average of different indicators

• Simple average– Both countries, X and Y,

have the same average (Env + Soc + Eco)/3 = 0.5

S = social measureEco = economic measureEnv = Environmental measure

Integrating the 3 dimensions

Country Env Soc Eco

X 0.1 0.5 0.9

Y 0.4 0.5 0.6

• Measures that favour synergies and penalize trade-offs

– Many summary measures do not penalize trade offs

• methodology for aggregation: simple average of different indicators

S = social measureEco = economic measureEnv = Environmental measureValues closer to one indicate better performance

But country X performs much better in the economic dimension at the price of a low environmental performance

Integrating the three dimensions• Simple average

– Both countries, X and Y, have the same mean (Env + Soc + Eco)/3 = 0.5

• Geometric mean

– Country X: 0.36– Country Y: 0.49

Country Env Soc EcoX 0.1 0.5 0.9Y 0.4 0.5 0.6

3Soc × Eco × EnvSD =

Penalized for the economic-environmental trade-off

Integrating the 3 dimensions

• Measures that favour synergies and penalize trade-offs

– Geometric mean

• Has been used in the calculation of the human development index since 2011

• Better than simple average at penalizing trade-offs

Integrating and balancing the 3 dimensions

Social indicators

Health

Education

etc

Economic indicators

Income

Employment

etc

Environmental indicators

GHG emissions

Land degradation

etc

Social summary measure

Economic summary measure

Environmental summary measure

Overall SD measure

Inequality measures• Measure disparities across a population of the

resources received by that population

• Resources: income, land, education, health services, energy, water, etc.

• Measures across all population versus disaggregating for specific groups

– Across all population: Gini coefficient, Hoover coefficient, % population with access to a service, etc.

– For specific groups: disaggregating indicators for women/men, by wealth quintiles, for minorities, for persons with disabilities, etc.

Income inequality measures• Increased interest in the SDG discussions

• Associated to social negative outcomes, like increased violence, increased adolescent pregnancy rates

• Popular/discussed measures

– Gini coefficient

– Palma index

– Poorest quintile's share in national income/consumption

Income inequality measures• Popular/discussed measures

– Gini coefficient

• Intuitive

• More sensitive to changes in the middle class

• Not immediate to see the situation of the poorest

– Palma index

• Ratio of the income of top 10% to the bottom 40%

• Most equal countries have Palma index close to one

• The bottom 40% may improve without improvement of the bottom 10%

– Poorest quintile's share in national income/consumption

Cumulative income

Cumulative population

Palma index for Brazil

Income inequality measures• Popular/discussed measures

– Gini coefficient

• Intuitive

• More sensitive to changes in the middle class

• Not immediate to see the situation of the poorest

– Palma index

• Ratio of the income of top 10% to the bottom 40%

• Most equal countries have Palma index close to one

• The bottom 40% may improve without improvement of the bottom 10%

– Poorest quintile's share in national income/consumption

• Can supplement other inequality measures

Cumulative income

Cumulative population

Concluding points• Sets of indicators should address the three dimensions

of sustainable development • Combining measures can help promote synergies in the

three dimensions– geometric means

• Many inequality measures around, selection depends on purpose