Measuring the green economy

Measuring the green economy

Summary

The green economy is an economic model which not only reduces the impact of production and consumption on the environment, but also creates a virtuous relationship between economic growth and environmental wellbeing.

To enable and track the move towards this model, economic and environmental measurement is essential. Current approaches are still in development, lack available data or show inconsistencies with proposed definitions.

This ESCoE project aims to review the definitions underpinning estimates of the ‘green economy’ and create a new list of green activities. It will also identify and test new methods for identifying firms involved in environmental activities.

The output of this work will be a comprehensive list of UK firms engaged in EGSS / ‘green economy’ activities, with detail on their geographic and sectoral distribution.

Methods

This project will first review the definitions underpinning estimates of Environmental Protection Expenditures (EPE) and the Environmental Goods and Services Sector (EGSS) in the Environmental Accounts to assess the extent to which they are capturing the full extent of what might be termed the ‘green economy’. This will include an assessment of emerging areas of environmental technology that may fit poorly with existing definitions and classifications. The work will generate a new typology of green activities and will also update the list of indicative activities underlying the current EGSS measurement approach.

This review of definitions will build on the ongoing ONS work on green jobs, working closely with the team leading this work. We will also seek routes for wider stakeholder engagement on definitions.

We will then develop and test new methods for identifying firms that are involved in environmental activities, in particular the use of data mining of company websites as a tool to enhance identification of firms involved in environmental activities. We will test the machine learning approaches, e.g., developed by The Data City, to identify UK firms that are involved in the provision of environmental goods and services.

We recognise the interest in more granular data, but also recognise that robust data on granular data may not always be possible. If resources permit, we could use patent data to identify firms engaged in green R&D (Research and Development), involving further significant innovation in green economy measurement.

Impact

Better measurement of the green economy will deliver on the ONS’ whole economy transformation workstream objectives for 2023-24 and beyond.

It will also help to inform policy and public debates. There is a consistent demand from policymakers and others to understand the scale of economic output associated with ‘green’ activities and the wider economic transition.

People

Hamid Nejadghoraban

Our partners