Designing a green future index

THE BACKGROUND

FINANCE FOR IMPACT contributed to the launch of the Green Future Index 2022, the second edition of the comparative ranking of 76 nations and territories on their ability to develop a sustainable, low-carbon future.

THE PROJECT

The index measures the degree to which economies are pivoting toward clean energy, industry, agriculture, and society through investment in renewables, innovation, and green policy. The overall rankings tab shows the performance of the examined economies relative to each other and aggregates scores generated across the following five pillars: Carbon emissions, Energy transition, Green society, Clean innovation, and Climate policy.

The index was developed through in-depth primary and secondary research processes. Secondary research included the review of several hundred articles, research reports and papers in scientific literature, and news and legal analysis journals. Primary research was conducted through in-depth interviews with global experts on climate change, green energy, and decarbonization technologies. The data came from a wide range of publicly available sources, including the International Energy Agency (IEA), the International Renewable Energy Agency, the World Bank, the United Nations Food and Agriculture Association (FAO), the World Intellectual Property Organization, and the Climate Action Tracker (CAT).

The structure of the index included specific pillars with indicators:

• Pillar 1: Carbon emissions This pillar measures how effectively countries are curbing carbon dioxide emissions overall, as well as in key sectors.

• Pillar 2: Energy transition This pillar assesses the contribution and growth rate of renewable energy sources, and now includes nuclear power.

• Pillar 3: Green society This pillar measures the efforts made by government, industry, and society to promote green practices

• Pillar 4: Clean innovation This pillar measures the innovation environment for building a low-carbon future, such as the relative penetration of green patents, investment in cross-border clean energy, and investment in food technology.

• Pillar 5: Climate policy This pillar measures the ambition and effectiveness of climate policy, including carbon financing initiatives, sustainable agriculture policy, and the use of pandemic recovery spending to achieve a green economic recovery.

These pillars were constructed to comprehensively evaluate each country’s green future across two dimensions: the progress they have made on achieving carbon reduction goals and other climate-friendly societal activities, and the ambitions that the country must achieve to maintain a carbon-neutral economy.

The first four “progress pillars” account for 60% of the weighting in the index. The fifth pillar—climate policy—measured the extent to which investment and policy activities were channeled into green infrastructure initiatives and legislation frameworks. These factors collectively provided the primary impetus toward establishing and sustaining a country’s green future, and thus this pillar accounts for 40% of the Index weighting.

THE RESULTS

In this year’s ranking, MIT Technology Review has found that many countries may not be maintaining the rate of change first brought about by pandemic-related slowdowns and lockdowns. Moreover, faced with uncertainty as the pandemic drags on, many have reverted to old carbon-intensive habits to recharge their economies.

Yet, there has also been an incredible ramp-up in the investment in renewable energy (accounting for more than 70% of all new power generation in 2021) and many of the world’s leading nations—including some of its largest polluters— committed to firm dates to achieve carbon neutrality.

Overall top 10 and bottom 10: The Green Future Index comparative rankings for 2021 and 2022

The Green Future Index 2022 rankings world map