GROSS DOMESTIC PRODUCT PER CAPITA

Economic

Economic Structure

Economic Performance

 1.                 INDICATOR 

(a)                Name:  Gross domestic product (GDP) per capita. 

(b)               Brief Definition:  Levels of GDP per capita are obtained by dividing annual or period GDP at current market prices by population.  A variation of the indicator could be the growth of real GDP per capita which is derived by computing the annual or period growth rate of GDP in constant basic producers' or purchasers' prices divided by corresponding population. 

(c)               Unit of Measurement:  $US. 

(d)               Placement in the CSD Indicator Set: Economic/Economic Structure/Economic Performance. 

2.         POLICY RELEVANCE 

(a)                Purpose:  The indicator is a basic economic growth indicator and measures the level and extent of total economic output.  It reflects changes in total production of goods and services. 

(b)               Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Growth in the production of goods and services is a basic determinant of how the economy fares.  By allocating total production to each unit of population, the extent to which the rate of individual output contributes to the development process can be measured.  It indicates the pace of per capita income growth and also the rate that resources are used up.  As a single composite indicator of economic growth, it is a most powerful summary indicator of the economic state of development in its many aspects.  It does not directly measure sustainable development but it is a very important measure for the economic and developmental aspects of sustainable development, including people's consumption patterns and the use of renewable resources.  

(c)                International Conventions and Agreements:  None. 

(d)               International Targets/Recommended Standards:  National targets are generally oriented towards priorities, availability of resources and, in large measure, to historical economic performance.  International targets are most often established by financial institutions and international organizations only for the purposes of intercountry comparison of economic performance in determining the direction of aid distribution or resource allocation projects. Country groupings to form economic entities, for example, the European Union, Organization of Petroleum Exporting Countries (OPEC), also set international targets among constituent members to serve as guidelines in national policy priority setting.  Moreover, the United Nations uses average world per capita income as a threshold in setting the level of relief allowance for countries with large population in its formulation of the scale of assessments of member states.

(e)                Linkages to Other Indicators:  As a highly aggregated composite measure, this indicator has close links with many, more disaggregated indicators.  Examples would include population growth, net migration, other GDP indicators, land use change, arable land per capita, and forest area. 

3.         METHODOLOGICAL DESCRIPTION 

(a)                Underlying Definitions and Concepts:  GDP as described in the 1993 SNA can be defined in three ways:  Firstly, it is the sum total value- added of all production units including all taxes and subsidies on products which are not included in the valuation of output.  It is also equal to the sum of final uses of goods and services (except intermediate consumption) measured in purchasers' prices, less the value of imports of goods and services.  Finally, it can be measured as the sum of primary incomes distributed by resident producer units. 

(b)               Measurement Methods: The current price estimates of GDP are adjusted to GDP at constant prices with the use of price deflators. Population estimates enable the conversion of total GDP to per capita levels, while exchange rates and other conversion factors are used to arrive at values based on a common unit of currency.  Real GDP is derived by extrapolating total value- added in the base year with production indicators in physical terms or by deflating current price values by a price deflator. 

(c)                Limitations of the Indicator: As a necessary condition to being a key economic performance indicator of sustainable development, one of the often‑cited limitations of GDP is that it does not account for the social and environmental costs of production; it therefore is not a good measure of the level of over‑all well being.  For example, GDP per capita reveals nothing concerning energy and material interactions with the environment.  GDP is also not considered a good measure of sustainable consumption because it does not allow for the capital used up in the production process. 

(d)               Status of Methodology: The 1993 System of National Accounts (SNA) provides international standards for national accounts.  There may exist some differences in national accounting and demographic reporting procedures and practices between countries.  One other possible drawback could lie in the comparability of price information used in deflating current price data and technical differences in the choice of base year for the original data.  Additionally, a considered basic limitation lies in the conversion of GDP into a common denomination as a result of current misalignments in exchange rates for some countries vis‑a‑vis the comparator currency (US dollar) particularly for those countries in transition whose market exchange rates produce unrealistic levels of GDP, making any meaningful inter-country interpretation difficult. 

(e)                Alternative Definitions/Indicators: Economic indicators that measure the achievement of higher levels of goods and services more efficiently are better indicators of sustainable development.  Consumption trends are better reflected by such indicators as Personal Consumption expenditures as used in the USA.  This indicator can be derived from the SNA. 

4.         ASSESSMENT OF DATA 

(a)                Data Needed to Compile the Indicator:  The conversion rates used by the UN Statistics Division (UNSD) are normally the market or blended rates of exchange obtained from the International Monetary Fund (IMF).  In some cases, use is made of UN operational rates that are established primarily for the settlement of administrative transactions between host countries and the UN.  In very unique circumstances the use of purchasing power parities (PPP) or price‑adjusted rates of exchange (PARE) is necessary.  The World Bank also uses a special exchange rate where the official exchange rate produces distortion in the dollar levels of GDP. 

(b)               National and International Data Availability and Sources:  The indicator has no serious limitations in terms of data availability.  The principal data elements for a majority of countries are mostly and regularly available from national and international sources on a historical basis.  Internationally accepted conceptual guidelines, are also available to assist with the compilation of the indicator.  Annual GDP data in current and constant prices are generally reported by national statistical offices or central banks in the United Nations (UN) National Accounts questionnaire and supplemented by estimates prepared by the UN as well as other international organizations such as the World Bank and the IMF.  The Organisation for Economic Co-operation and Development  (OECD) compiles quarterly GDP estimates for its Members.  Population data are mainly obtained either through censuses or surveys.  These are supplemented by growth estimates prepared by the UN Population Division. 

(c)                Data References: Comprehensive national accounts statistics are published by the UN in the series National Accounts Statistics: Main Aggregates and Detailed Tables.  A historical series of GDP is available from the national accounts database of the UN Statistics Division.  Population data and projections are available in the World Population Prospects published by the Population Division of the UN Department of Economic and Social Affairs.  Exchange rates are published by the IMF in International Financial Statistics

5.                  AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)              Lead Agency:  The lead agency is the United Nations Department of Economic and Social Affairs (DESA).  The contact point is the Director, Statistics Division, DESA; fax no. (1 212) 963 9851. 

(b)             Other Contributing Organizations:  None. 

6.         REFERENCES 

(a)                Readings: The 1993 SNA provides international standards on national accounts and is the product of collaborative efforts between EUROSTAT, IMF, OECD, UN and the World Bank. 

(b)               Internet site:  United Nations Statistics Division: http://www.un.org/Depts/unsd 

 

INVESTMENT SHARE IN GROSS DOMESTIC PRODUCT

Economic

Economic Structure

Economic Performance

1.        INDICATOR 

(a)        Name:  Investment Share in Gross Domestic Product (GDP). 

(b)       Brief Definition:  This indicator measures the share of investment in relation to total production.  It is obtained by dividing gross production capital formation by gross domestic product, both at purchasers' prices. 

(c)            Unit of Measurement:  %. 

(d)       Placement in the CSD Indicator Set: Economic/Economic Structure/Economic Performance. 

2.       POLICY RELEVANCE 

(a)        Purpose:  The rate of investment measures the stimulus to economic development, reflecting the infusion of requisite capital to finance the development process. 

(b)          Relevance to Sustainable/Unsustainable Development (theme/sub-theme): This indicator deals with the processes and patterns of economic activities.  It is an important element of the sustainable development process in developing countries, aimed at increasing their partnership in the global economy.  It reflects an important financial component aimed at accelerating the pace of development. 

(c)            International Conventions and Agreements:  None. 

(d)       International Targets/Recommended Standards:  None.  National targets for investment share to GDP are usually included in government policy as a basis for budget funding programmes and for priority-setting exercises. 

(e)        Linkages to Other Indicators:  This indicator is closely linked with other measures of economic development, in particular GDP per capita and share of manufacturing in GDP. 

3.       METHODOLOGICAL DESCRIPTION 

(a)        Underlying Definitions and Concepts:  Gross capital formation (gross investment) is defined in the System of National Accounts (SNA) as the total value of gross fixed capital formation plus changes in inventories and acquisitions less disposal of valuables.  Fixed capital formation is the total value of a producer's acquisitions of fixed assets, less disposal, together with certain additions to the value of non-produced assets.  Gross capital formation includes outlays on additions of new durable goods to stocks of fixed asset by industries, producers of government services, the private sector, non-profit services, and households, but excludes outlays of government services on durable goods for military use.  It is further classified into new and existing tangible (dwellings, buildings and structures, machineries and equipment, etc.) and intangible (mineral exploration, computer software, entertainment, artistic and literary originals, etc.) assets. 

(b)       Measurement Methods:  Gross capital formation at purchasers’ prices (see under 3(a)) divided by gross domestic product at purchasers’ prices.  

(c)        Limitations of the Indicator:  Investments in SNA terms, as in this indicator, constitute only investments on produced assets.  Any expenditure on non-produced assets, for example, land or payments for education and health that enhance the quality of human capital are not included. 

(d)           Status of the Methodology:  The concepts of gross capital formation and GDP are standardized in the SNA and, therefore, comparable between countries. 

(e)        Alternative Definitions/Indicators:  An alternative indicator would be one which would identify selected investment expenditures by sector, such as environmental protection, health and education, housing, nutrition, etc., that are individually considered relevant to sustainable development.  A second alternative would report the indicator using gross fixed capital formation. 

4.       DATA ASSESSMENT 

(a)        Data Needed to Compile the Indicator: 

(i)      gross capital formation at purchasers’ prices; 

(ii)    gross domestic product at purchasers’ prices. 

(b)       National and International Data Availability and Sources:  Data is of reasonable quality and commonly available from national sources on a historical basis.  Data on gross capital formation and GDP are generally reported by national statistical offices or central banks to the UN National Accounts questionnaire.  These are supplemented by estimates prepared by the United Nations Statistical Division (UNSD) as well as other international organizations, such as the World Bank and the International Monetary Fund (IMF). 

(c)        Data References: National accounts statistics are published in the series National Accounts Statistics: Main Aggregates and Detailed Tables. 

5.       AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)        Lead Agency:  The lead agency is the United Nations Department of Economics and Social Affairs (DESA).  The contact point in terms of SNA references as well as data compilation on an international level is the Director, Statistics Division, DESA; fax no. (1 212) 963 9851.  

(b)       Other Contributing Organizations:  None. 

6.       REFERENCES 

(a)        Readings:  Further details on the conceptual definition of GDP are contained in the System of National Accounts, 1993. 

(b)       Internet site:  United Nations Statistics Division: http://www.un.org/Depts/unsd

  


BALANCE OF TRADE IN GOODS AND SERVICES

Economic

Economic Structure

Trade

          

1.         INDICATOR 

(a)                Name:  Balance of trade in goods and services. 

(b)               Brief Definition: The difference between the value of exported goods and services and the value of imported goods and services. 

(c)                Unit of Measurement:  $US. 

(d)               Placement in the CSD Indicator Set:  Economic/Economic Structure/Trade. 

2.         POLICY RELEVANCE 

(a)                Purpose: The indicator shows the relation of an economy with other economies in the world.  The components of the indicator (exports and/or imports) are reflecting the change in economic behavior of the domestic trade enterprises, the change in exchange rate, the effect of the change in exchange rate, and international competitiveness.  The change can imply economic policy changes.  The components of the indicator show how an economy is participating in international co-operation.  Its components show the openness of an economy if it is compared to the value of GDP and can also reflect an economy’s dependence and vulnerability. 

(b)               Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Trade liberalization, in general, may have positive effects on sustainable development.  It can stimulate economic diversification, improve the efficiency of resource allocation and encourage the transfer of innovative technologies.  On the other hand, it can also result in increased and unsustainable resource use when the environmental costs of production are not fully internalized and reflected in market prices. 

(c)                International Conventions and Agreements:   None. 

(d)               International Targets/Recommended Standards:   None. 

(e)                Linkages to Other Indicators: This indicator is the balancing item of the External account of goods and services in the sequence of the national accounts in the 1993 SNA.  It is a component of GDP. It is linked to other indicators of economic structure, financial status, production and consumption patterns. 

3.         METHODOLOGICAL DESCRIPTION 

(a)                Underlying Definitions and Concepts: The balance of trade in goods and services is defined in the 1993 SNA, and partly in the International Trade Statistics. 

(b)               Measurement Methods:  Exports of goods and services are standard items in the balance of payments and national accounts.  Exports of goods and services consist of sales, barter, or gifts or grants, of goods and services from resident to non-residents, while imports consist of purchases, barter, or receipts of gifts or grants, of goods and services by resident from non-residents.  Exports and imports of goods in the SNA are recorded at border value.  Total imports and exports of goods are valued free-on-board (at the exporter’s customs frontier).  The balance of trade in goods and services is the difference of the above-mentioned exports and imports of goods and services. 

(c)                Limitations of the Indicator:  The indicator has no serious limitations in terms of methodology and data availability.  In terms of interpretation, as it is the balancing item of exports and imports, it does not tell too much without looking at its components and their relation to other indicators. 

(d)               Status of Methodology:  The treatment of exports and imports of goods and services in the 1993 SNA is generally identical with that in the balance of payments accounts as described in the Balance of Payments Manual (IMF, 1993). 

(e)                Alternative Definitions/Indicators:    The material composition (goods/services, highly manufactured products/raw materials) of exports and imports also has direct relationship with sustainability. 

4.         ASSESSMENT OF DATA 

(a)                Data Needed to Compile the Indicator: (i) Exports of goods and services; (ii) Imports of goods and services. 

(b)               National and International Data Availability and Sources: The principal data elements for a majority of countries are mostly and regularly available from national and international sources on a historical basis.  Internationally accepted guidelines, are also available to assist with the compilation of the indicator.  Annual exports and imports of goods and services are generally reported by national statistical offices or central banks in the United Nations (UN) questionnaires and/or central bank/statistical agency reports/data transmissions, national publications. 

(c)                Data References:  Comprehensive national accounts statistics are published by the UN in the series of National Accounts Statistics: Main aggregates and Detailed Tables, and in IMF’s International Financial Statistics Yearbook. 

5.                AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)             Lead Agency: The lead agencies are the United Nations Department of Economic and Social Affairs, Statistics Division, and the International Monetary Fund, Statistics Department. 

(b)            Other contributing organizations:  OECD Statistical Directorate, World Bank 

6.               REFERENCES

(a)                Readings:  1993 System of National Accounts; Balance of Payments Manual, 1993 IMF; World Development Indicators 2000, CD Rom of the World Bank. 

(b)               Internet sites: 

United Nations Statistics Division: http://www.un.org/Depts/unsd 

International Monetary Fund: http://www.imf.org

World Bank: http://www.worldbank.org 

 

 

DEBT TO GROSS NATIONAL PRODUCT RATIO

Economic

Economic Structure

Financial Status

1.         Indicator 

(a)        Name:  Debt to Gross National Product Ratio (GNP). 

(b)        Brief Definition:  The ratio of total external debt to gross national product. 

(c)        Unit of Measurement:  %. 

(d)        Placement in the CSD Indicator Set:  Economic/Economic Structure/Financial Status. 

2.         Policy Relevance 

(a)        Purpose:  Debt/GNP is a measure of the degree of indebtedness, and the indicator helps to assess the external debt situation (and debt carrying capacity) of a country. 

(b)        Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  The ratio measures the outstanding obligations in relation to the broadest measure of the income-generating power of an economy.  The higher the ratio, the greater is the output that has to be forgone from sustainable development to service the debt.  A debt overhang exists when the debt stock exceeds that which could reasonably be serviced by the debtor country in the medium or long-term.  There are no simple rules on what constitutes a reasonable burden, however, and it will vary from country to country. 

(c)        International Conventions and Agreements:  None.  

(d)        International Targets/Recommended Standards:  None. 

(e)        Linkages to Other Indicators:  This indicator, as a measure of unsustainability, is closely linked to other financial and international cooperation indicators.  It also has general bearing on several of the social and environmental indicators that show progress towards sustainable development. 

3.         Methodological Description 

(a)        Underlying Definitions and Concepts:  Total external debt stock is defined as the sum of long-term external debt, the use of International Monetary Fund (IMF) credit, and short-term external debt.  Long-term external debt is defined as debt that has an original or extended maturity of more than one year, that is owed to non-residents, and repayable in foreign currency, goods, or services.  Long-term debt has three components:

i)     Public debt, which is an external obligation of a public debtor, including the national government, a political subdivision (or an agency of either), and autonomous public bodies; 

ii)    Publicly guaranteed debt, which is an external obligation of a private debtor that is guaranteed for repayment by a public entity; and 

iii)  Private non-guaranteed debt, which is an external obligation of a private debtor that is not guaranteed for repayment by a public entity. 

Use of International Monetary Fund (IMF) credit denotes repurchase obligations to the IMF with respect to all uses of IMF resources, excluding those resulting from drawings in the reserve tranche.  Use of IMF credits comprises purchases under the credit tranches, including enlarged access resources and all special facilities (the buffer stock, compensatory financing, extended fund, and oil facilities), trust fund loans, and operations under the Stand-by Arrangement, Extended Stand-by Arrangement, the Poverty Reduction and Growth Facility (formerly known as the Enhanced Structural Adjustment Facility). 

Short-term external debt is defined as debt that has an original maturity of one year or less.  No distinction is made between public and private non-guaranteed short-term debt.  The Global Development Finance includes interest in arrears (defined as interest payment due but not paid) on long-term debt, on a cumulative basis, under short-term debt. 

(b)        Measurement Methods:  Total external debt is measured by the sum of long-term external debt, the use of IMF credit and short-term external debt. For definition of these terms see 3(a) above. 

Gross national product (GNP) is the sum of value added by all resident producers plus any taxes (less subsidies) not included in the valuation of output, plus net receipts of primary income (compensation of employees and property income) from abroad. 

(c)        Limitations of the Indicator:  No one indicator can provide an exhaustive analysis of the debt situation of a country.  While this indicator is a measure of the extent of the debt overhang of a country, it needs to be interpreted carefully.  The nominal stock of outstanding debt fails to take into account the differing concessional terms of the external debt.  This can give misleading indications regarding the future debt-servicing burden.  

(d)        Status of Methodology:  Not Available. 

(e)        Alternative Definitions/Indicators:  One measure that takes into account both the profile of debt servicing payments and the concessional aspect of the debt is the present value of external debt.  When the debt stock of a country is mostly on non-concessional terms then the difference between the present and nominal value are small.  Another reason why this ratio can be problematic is because of erratic changes arising from real exchange rate movements. 

4.         Assessment OF DATA 

(a)        Data Needed to Compile the Indicator:  Data required includes the sum of total external debt stock  to include long-term external debt, the use of International Monetary Fund (IMF) credit and short-term external debt. In addition, gross national product data (GNP) is needed. 

(b)        National and International Data Availability and Sources:  The principal sources of the information for the long-term external debt indicator are reports from member countries to the World Bank through the Debtor Reporting System (DRS).  These countries have received either IBRD loans or IDA credits.  Reporting countries submit detailed loan-by-loan reports through the DRS on the annual status, transactions, and terms of the long-term external debt of public agencies, and that of private ones guaranteed by a public agency in the debtor country.  Information on debt owed to multilateral institutions is drawn from the files of these institutions.  A total of 137 individual countries report to the World Bank’s DRS. 

Data on the use of IMF credit is obtained from the IMF’s Treasury Department.  

The short-term debt data are as reported by the debtor country or estimates derived from creditor sources.  The principal creditor sources are the semiannual series of commercial banks’ claims on developing countries, published by the Bank for International Settlements (BIS), and data on officially guaranteed suppliers’ credits compiled by the Organisation for Economic Co-operation and Development (OECD).  For some countries, estimates are prepared by pooling creditor and debtor information. 

Data on non-debt creating flows are derived from several sources.  Data on FDI come from the IMF balance of payments, supplemented by detailed data on direct investment from source and recipient countries.  Data on portfolio equity flows are obtained from market sources and national statistical offices or securities exchanges, and that on grants from the OECD Development Assistance Committee. 

Data on GNP are from national statistical offices, complemented by World Bank staff estimates. 

(c)        Data References:  The World Bank Global Development Finance and World Development Indicators (Annual Publications). 

5.         Agencies Involved in the Development of the Indicator

(a)        Lead Agency:  The lead agency is the World Bank (WB).  The contact point is the World Development Indicators Team, Development Data Group, the World Bank; fax no. (1 202) 522-1785. 

(b)        Other Contributing Organizations:  None. 

6.         References 

(a)        Readings: 

The World Bank. Global Development Finance. 2000. 

The World Bank. 2000 World Development Indicators. 2000 

(b)        Internet site:  www.worldbank.org/data 

 

         TOTAL OFFICIAL DEVELOPMENT ASSISTANCE GIVEN OR RECEIVED AS A PERCENTAGE OF GROSS NATIONAL PRODUCT

Economic

Economic Structure

Financial Status

1.         Indicator 

(a)        Name:  Total Official Development Assistance (ODA) given or received as a percentage of Gross National Product (GNP). 

(b)        Brief Definition:  This indicator is defined as the total ODA given or received as a share of GNP of the source or recipient country, respectively.  When ODA flows by donor countries are measured, ODA comprises bilateral disbursements of concessional funds to developing countries and multilateral institutions.  When ODA receipts by developing countries are measured, ODA comprises disbursement of concessional finance from both bilateral and multilateral sources. 

(c)        Unit of Measurement:  %. 

(d)        Placement in the CSD Indicator Set:  Economic/Economic Structure/Financial Status. 

2.         Policy Relevance 

(a)        Purpose:  The indicator is a measure of the size of flows that are both concessional, and aimed mainly at promoting development and welfare of developing countries.  It conveys information about the borrower’s receipt of aid from official lenders or official lender’s concessional flows to developing countries. 

(b)        Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Financial resources are obviously needed for the attainment of sustainable development.  Agenda 21 calls for the monitoring of the provision of financial resources, particularly in developing countries, so that the international community can take further action on the basis of accurate and reliable data. 

(c)        International Conventions and Agreements:  None.  

(d)        International Targets/Recommended Standards:  For developed countries, the United Nations has established that ODA should represent 0.7% of GNP. 

(e)        Linkages to Other Indicators:  This indicator is particularly linked with the other financial and international cooperation indicators. 

3.         Methodological Description 

(a)        Underlying Definitions and Concepts:  Not Available. 

(b)        Measurement Methods:  There are several ways of measuring Official Development Assistance (ODA) flows.  The World Bank takes a developing-country/debtor perspective and the Organization for Economic Co-operation and Development (OECD) takes a donor/creditor-country perspective.  ODA consists of grants or loans to developing countries that are undertaken by the official sector with the purpose of promoting economic development and welfare. Grants are defined as disbursements, in money or in kind, for which there is no repayment required.  ODA loans are provided at concessional financial terms, that is with a grant element of 25 percent or more.  The degree of concessionality is determined by the terms of a loan -interest rate, maturity, and grace period.  The OECD includes grants for technical cooperation, but the World Bank excludes them because these grants mostly represent the provision of services rather than a flow of funds. 

Gross national product (GNP) is the sum of value added by all resident producers plus any taxes (less subsidies) not included in the valuation of output, plus net receipts of primary income (compensation of employees and property income) from abroad. 

(c)        Limitations of the Indicator:  Not Available. 

(d)        Status of Methodology:  Not Available. 

(e)        Alternative Definitions/Indicators:  Not Available. 

4.         Assessment OF DATA 

(a)        Data Needed to Compile the Indicator: Total Official Development Assistance (ODA) given or received and GNP data. 

(b)        National and International Data Availability and Sources:  The principal source of the information are the OECD and the World Bank’s Debtor Reporting System. The OECD data are obtained from donor and creditor sources through the information collected by the Development Assistance Committee.  It includes information from the Creditor Reporting System and the joint OECD/Bank for International Settlements (BIS) system for identifying officially guaranteed claims of private banks on developing countries. 

(c)        Data References: The World Bank Global Development Finance and World Development Indicators (Annual Publications). 

5.         Agencies Involved in the Development of the Indicator 

(a)        Lead Agency:  The lead agency is the World Bank (WB).  The contact point is the World Development Indicators Team, Development Data Group, the World Bank; fax no. (1 202) 522-1785. 

(b)        Other Contributing Organizations:  The Organization for Economic Co-operation and Development (OECD) represents a contributing agency to the development of this indicator. 

6.         References 

(a)        Readings

The World Bank. Global Development Finance. 2000. 

The World Bank. 2000 World Development Indicators. 2000 

(b)        Internet site:  www.worldbank.org/data

 


            INTENSITY OF MATERIAL USE

Economic

Consumption and Production Patterns

Material Consumption

1.         INDICATOR 

(a)        Name:  Intensity of Material Use. 

(b)        Brief Definition:  The quantities of minerals and metals, including primary and secondary (recycled) materials, consumed per unit of real Gross Domestic Product (GDP). 

(c)        Unit of Measurement:  kgs, tonnes or m3 per $1,000 of GDP. 

(d)        Placement in the CSD Indicators Set:  Economic/Consumption and Production Patterns/Material Consumption. 

2.         POLICY RELEVANCE 

(a)        Purpose:  The indicator provides a basis for policies to increase the efficient use of raw materials in order to conserve natural resources and reduce environment degradation resulting from primary production, material processing, manufacturing and waste disposal. 

(b)        Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Primary production of raw materials, processing of the materials into products, and ultimate disposal of the waste material has major environmental impacts. Reducing the material intensity of production and consumption of goods and services is essential to environmental protection and resource conservation.  Reductions in intensity of material use can be achieved by more efficient use of natural resources in production and consumption, by recycling used and waste material, and by shifts in consumption patterns to less material intensive goods and services.  The indicator allows an analysis of consumption of natural resources, as well as trends in recovery and recycling. 

The four-component structure of the indicator (consumption of primary material, consumption of secondary material, changes in stocks, and material embodied in imports and exports) provides a measure of the total material consumption of the economy.  Per-capita consumption of the materials could also be determined, facilitating the interpretation of trends in material intensity. 

The indicator can also be used as a proxy for assessing trends in industrial pollution.  In the United States, for example, it is estimated that material-intensive industries account for about 70% of total air and water pollution. Throughput-to-pollution ratios can be used for this calculation, although technological change would affect the results. 

(c)        International Conventions and Agreements:  None. 

(d)        International Targets/Recommended Standards:  None. 

(e)        Linkages to Other Indicators:  This indicator is linked to other indicators which reflect the stage of economic development and the structure of the economy, such as share of manufacturing value-added in GDP and energy use per unit GDP. 

3.         Methodological Description 

(a)        Underlying Definitions and Concepts:  Not Applicable. 

(b)        Measurement Methods:  Using the UNCTAD database on minerals and metals, consumption of primary and secondary materials can be estimated. These data are then adjusted for (i) changes in stocks of producers, traders and manufacturers, and (ii) the volume of material contained in imports and exports of material-intensive semi-fabricates and manufactures. The calculated volume of material consumption is then divided by real GDP in order to compute material consumption per unit of GDP.  Material intensity data can be disaggregated into intensity of use of primary and secondary materials. 

(c)        Limitations of the Indicator:  It is difficult to accurately estimate the consumption of secondary materials, changes in stocks and the material contained in traded semi-fabricates and manufactures.  For manufactures, conversion factors for material content are being compiled and updated to take account of changing manufacturing technologies.  National and regional differences in this regard, however, are difficult to reflect. 

(d)        Status of the Methodology:  There is limited use of indicators of material intensity in some developed countries, with varying methodologies. 

(e)        Alternative Definitions/Indicators:  None. 

4.         ASSESSMENT OF DATA 

(a)        Data Needed to Compile the Indicator:  Most of the required consumption and trade data are available in UNCTAD's database on minerals and metals. Information on consumption of secondary materials is incomplete but can be estimated with reasonable accuracy.  Data on changes in stocks, in particular at the level of traders and manufacturers, are scant, although some reasonable estimates can be made. Conversion factors for material content in semi-fabricates are being compiled and updated in collaboration with various industry associations. Information, however, is often incomplete, not representative, or too general. 

(b)        National and International Data Availability and Sources:  New estimates of national consumption of some 20 commodities per unit of GDP are currently being prepared, updating the results of a 1991 survey.  The analysis emphasizes consumption trends of primary versus secondary materials. 

(c)        Data References:  Not Available. 

5.         AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)        Lead Agency:  The lead agency is the United Nations Conference on Trade and Development (UNCTAD).  The contact point is the Coordinator, Sustainable Development, UNCTAD; fax no. (41 22) 907 0047. 

(b)        Other Contributing Organizations:  Eurostat, World Resources Institute, and the Wuppertal Institute on Climate, Environment and Energy have contributed to the development of this indicator. 

6.         REFERENCES 

(a)        Readings: 

Eurostat.  Primary Material Balances. 

Ndiaye, D.  Statistical Study on the Consumption of Metals. Centre d'Economie des Ressources Naturelles, Ecole Nationale Supérieure des Mines de Paris. Paris, 1991. 

World Resources Institute.  World Resources 1994-95, part IV, Chapter 21, 1995. 

Behrensmeier, R. and  S. Bringezu. On the Methodology of Analysing Macro-economic Material Intensity. Wuppertal Institute on Climate, Environment and Energy, Wuppertal Papers, No. 34, April 1995. 

Hammond, Allen, et al. Environmental Indicators: A Systematic Approach to Measuring and Reporting on Environmental Policy Performance in the Context of Sustainable Development, (Chapter VI and Appendix I).  World Resources Institute, Washington, D.C., 1995. 

Hoffmann, U and D. Zivkovic. Demand Growth for Industrial Raw Materials and its Determinants: An Analysis for the Period 1965-1988. UNCTAD Discussion Papers, No. 50, Geneva, November 1992. 

(b)        Internet site:  None. 

 


            ANNUAL ENERGY CONSUMPTION PER CAPITA

Economic

Consumption and Production Patterns

Energy Use

 1.                INDICATOR 

(a)                Name:  Annual energy consumption per capita. 

(b)               Brief Definition:  The per capita amount of energy - liquids, solids, gases and electricity – available in a given year in a given country or geographical area. 

(c)                Unit of Measurement:  Gigajoules. 

(d)               Placement in the CSD Indicator Set:  Economic/Consumption and Production Patterns/ Energy Use.

 2.         POLICY RELEVANCE 

(a)                Purpose:  The indicator is a widely used measure of access to and use of energy, individual and industrial energy consumption patterns and the energy intensity of a society. 

(b)               Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Energy is a key factor in industrial development and in providing vital services that improve the quality of life.  Traditionally energy has been regarded as the engine of economic progress.  However, its production, use, and byproducts have resulted in major pressures on the environment, both from a resource use and pollution point of view.  The decoupling of energy use from development represents a major challenge of sustainable development.  The long-term aim is for development and prosperity to continue through gains in energy efficiency rather than increased consumption and a transition towards the environmentally friendly use of renewable resources.  On the other hand, limited access to energy is a serious constraint to development in the developing world, where the per capita use of energy is less than one sixth that of the industrialized world. 

(c)                International Conventions and Agreements:  UNFCC and the Kyoto Protocol call for limitations on total greenhouse gas emissions, which are dominated by COs from the combustion of fossil fuels. 

(d)               International Targets/Recommended Standards:  The Kyoto Protocol sets targets for total greenhouse gas emissions for Annex I (developed) countries. 

(e)                Linkages to Other Indicators: The indicator is closely linked with other indicators of the economy, with environmental indicators such as climate change, air quality and land use, and also with social indicators. 

3.         Methodological Description 

(a)                Underlying Definitions and Concepts:  Gross inland consumption of energy is a key aggregate in the energy balances.  Consumption of energy refers to “apparent” consumption and is derived from the formula that takes into account production, exports, imports and stock changes.  Production refers to the first stage of production. International trade of energy commodities is based on the “general trade” system, that is, all goods entering and leaving the national boundary of a country are recorded as export and imports.  Bunkers refer to fuels supplied to ships engaged in international transport, irrespective of the carriers’ flag. In general, data on stocks refer to changes in stocks of producers, importers and/or industrial consumers at the beginning and the end of the year. 

(b)               Measurement Methods: The indicator is calculated as the ratio of total energy requirement and mid-year population. Total energy requirement (gross inland consumption) is calculated from the following formula: Primary production + Imports – Exports – Bunkers +/- Stock changes = Total energy requirement. 

(c)                Limitations of the Indicator:  Apparent consumption may in some cases represent only an indication of the magnitude of actual gross inland availability.  The actual value of the indicator is strongly influenced by a multitude of economic, social and geographical factors.  When using it as an indicator of sustainability the indicator has to be interpreted in connection with other indicators of economic development and energy use, as smaller or larger values of the indicator do not necessarily indicate more or less sustainable development.           

(d)               Status of the Methodology: The indicator is in widespread use, but without a standardized methodology.  International recommendations are available. 

(e)                Alternative Definitions/Indicators:  None. 

4.         ASSESSMENT OF DATA 

(a)                Data Needed to Compile the Indicator:  Energy commodity data for production and consumption (energy balances) and mid-year population estimates. 

(b)               National and International Data Availability and Sources:  Energy commodity data for production and consumption, and population data are regularly available for most countries at the national level; and for some countries, at the sub-national level.  Both types of data are compiled by and available from national statistical offices and country publications. 

5.         AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)             Lead Agency: The lead agency is the United Nations Department of Economic and Social Affairs (DESA).  The contact point is the Director, Statistics Division, DESA; fax no. (1 212) 963 9851. 

(b)              Other Contributing Organizations: Other organizations involved in the indicator development include the International Energy Agency of the Organisation for Economic Co-operation and Development (OECD/IEA), and  Eurostat. 

(c)               Data References:  United Nations: Energy Statistics Yearbook. United Nations: Energy Balances and Electricity Profiles. 

6.         REFERENCES 

(a)               Readings: 

Concepts and Methods in Energy Statistics, with Special Reference to Energy Accounts and Balances. United Nations, 1982. 

Energy Statistics:  Definitions, Units of Measure and Conversion Factors. United Nations, 1987. 

Energy Statistics:  A Manual for Developing Countries. United Nations, 1991. 

(b)             Internet site:  United Nations Statistics Division: http://www.un.org/Depts/unsd  

 


            SHARE OF CONSUMPTION OF RENEWABLE ENERGY RESOURCES

Economic

Consumption and Production Patterns

Energy Use

1.                 INDICATOR 

(a)          Name:  Share of consumption of renewable energy resources. 

(b)         Brief Definition: The percentage of a country’s total energy consumption supplied from renewable energy souces. 

(c)          Unit of Measurement: 

(d)         Placement in the CSD Indicator Set:  Economic/Consumption and Production Patterns/ Energy Use. 

2.        POLICY RELEVANCE 

(a)        Purpose:  This indicator measures the proportion of energy mix between renewable and non-renewable energy resources. 

(b)       Relevance to Sustainable/Unsustainable Development (theme/sub-theme):  Chapter 4 of Agenda 21 calls for an improvement of efficiency in the use of energy sources and for a transition towards the environmentally friendly use of renewable resources.  Energy is a key aspect of consumption and production.  Dependence on non-renewable resources can be regarded as unsustainable in the long term.  Renewable resources, on the other hand, can supply energy continuously under sustainable management practices and their use in general create less environmental pressure.  The ratio of non-renewable to renewable energy resources represents a measure of a country's sustainability. 

(c)         International Conventions and Agreements:  None. 

(d)        International Targets/Recommended Standards:  None. 

(e)         Linkages to Other Indicators:  Interpretation of this indicator is enhanced when combined with annual energy production, annual energy consumption per capita, and lifetime of proven energy reserves.  It is also closely linked to some of the environmental indicators such as greenhouse gas emissions. 

3.                Methodological Description

(a)        Underlying Definitions and Concepts: The elements comprising this indicator are consumption of renewable resources and total energy consumption.  Renewable energy sources refer to energy collected from current ambient energy flows or from substances derived from them.  This definition includes energy derived from geothermal, hydro, solar, tide, wind and wave power, and biofuels, such as fuelwood, bagasse, charcoal, animal and vegetal wastes, and other (industrial and municipal) wastes.  Consumption refers to "apparent consumption". 

(a)            Measurement Methods: This indicator is computed by calculating the ratio of consumption of energy from renewable resources over total energy consumption.  Apparent consumption is calculated by the following formula: Primary production + Imports – Exports – Bunkers +/- stock changes. 

Limitations of the Indicator:  Due to the large variety of forms of renewables and their uses, data collection is difficult.  Comparability of national data is limited due to the lack of standardized methodologies. 

Alternative Definitions/Indicators:  None. 

4.        ASSESSMENT OF DATA 

(a)        Data Needed to Compile the Indicator: Consumption of energy from renewable resources; total energy consumption. 

(b)       National and International Data Availability and Sources:  National data and estimates on renewable resources are available from national statistical offices and country publications for many countries.  The United Nations Statistics Division, and the International Energy Agency of the Organisation for Economic Co-operation and Development compile data and estimates based on information from national and international sources. 

(c)        Data References:  United Nations: Energy Statistics Yearbook and Energy Balances and Electricity Profiles; International Energy Agency: Energy Balances of OECD Countries, Energy Balances of Non-OECD Countries; World Energy Council: Survey of Energy Resources.  

5.       AGENCIES INVOLVED IN THE DEVELOPMENT OF THE INDICATOR 

(a)        Lead Agency:  The lead agency is the United Nations Department of Economic and Social Affairs, Statistics Division.   

(b)       Other Contributing Organizations: The agencies involved in the development of this indicator are the World Energy Council (WEC), the International Energy Agency of the Organisation for Economic Co-operation and Development (OECD/IAE), Eurostat, and the Economic Commission for Europe. 

(c)        Data References: World Energy Council: Survey of Energy Resources. United Nations: Energy Statistics Yearbook. 

6.       REFERENCES 

(a)        Readings:  See 5(c) 

(b)       Internet site:  United Nations Statistics Division: http://www.un.org/Depts/unsd