INCLUSIVE GREEN GROWTH INDEX

Asia has achieved extraordinary economic success, transforming from low- to middle-income status in a remarkably short time. In 1991, more than 90% of Asians lived in low-income economies, but by 2015, over 95% of the region’s population resided in middle-income economies. Despite this success, Asia faces challenges such as poverty, income inequality, gender gaps, rapid urbanization, worsening environmental degradation, and climate change.

The Sustainable Development Goals (SDGs) and the Paris climate change agreement marked a significant shift in the development landscape. Both emphasized a shared understanding of the opportunities and challenges countries will face as they strive for a more balanced pattern of growth that is strong, socially inclusive, and environmentally stable. Countries have started integrating the SDGs into their national development plans and legislation and mapping institutional responsibilities. These efforts are underscored by a clearer understanding of the costs of climate change risks, which are already threatening some of the recent gains made in achieving the SDGs.

Governments and their development partners need a new metric to comprehensively measure and monitor progress on achieving the development agendas set out in international agreements. The Inclusive Green Growth Index (IGGI), launched in this publication, meets this need. The IGGI aligns with the central tenet of the SDGs to “leave no one behind.” Its indicators are developed to capture key dimensions of economic growth, social equity, and environmental sustainability, including climate adaptation and mitigation.

Applying the IGGI to 2015 data for Asian and Organisation for Economic Co-operation and Development (OECD) countries shows that those on high growth paths do not necessarily achieve a high quality of growth. Asian countries that took steps early in their development trajectories to pursue a balanced pattern of growth now have a better quality of growth than countries that focused primarily on the economy. Achieving this balance is especially important for low- and middle-income countries, as shifting to an inclusive green growth path at later stages of development often entails high costs.

The IGGI is designed to help guide policymakers in making informed decisions on prioritizing infrastructure investments and financial allocations to deliver a better quality of growth. This publication emphasizes the need for robust institutions and shifts in decision-making processes for balanced development. To this end, coordination between agencies for prioritizing, planning, and implementing infrastructure investments and services needs to be stronger. Additionally, integration between local, provincial, and national agencies must be deepened to improve efficiencies in project management and optimize financial resources. In this age of technological prowess, countries can leverage the technology advantage by adapting the IGGI to advance their institutional systems.

I recommend the IGGI to governments for their efforts to achieve more balanced growth. Using the IGGI will be an effective tool to help expand access to economic opportunities for all segments of society in a way that is environmentally sustainable and attuned to climate change risks

Sources:

https://www.adb.org/sites/default/files/publication/462801/inclusive-green-growth-index.pdf