BOX 3A
OECD ENVIRONMENTAL INDICATORS

Myriam Linster¹

The OECD initiated a specific programme on environmental indicators in 1990 following a request at the 1989 G-7 summit. This programme led in particular to: 

• agreement on terminology and a conceptual framework common to OECD countries (e.g. pressure-state-response model, core issues of concern); 
• identification and definition of indicators on the basis of three major criteria: policy relevance, analytical soundness and measurability; 
• measurement of these indicators for a number of countries; 
• regular use of these indicators in the OECD's analytical work and environmental performance reviews.

The OECD thus accumulated practical experience not only in the definition and measurement of indicators but also in their use. The results of this work, and in particular its conceptual framework using the pressure-state-response (PSR) model, have influenced similar activities launched by a number of countries and by a number of international organizations.

PURPOSES

The approach adopted by the OECD and its Member countries relies on the assumption that there is no unique set of indicators, and that the appropriate set depends on its particular use. The OECD's work aims at developing environmental indicators for three major purposes: 

1. tracking environmental progress (monitoring the environment and changes over time); 
2. better integrating environmental concerns into sectoral policies; 
3. better integrating environmental concerns into economic policies. 

Indicators thus provide a tool for measuring environmental performance and for stimulating greater accountability from countries' governments towards public opinion.

OECD work has led to the development of a Core Set of environmental indicators, supplemented with various sets of sectoral indicators to help improve the integration of environmental concerns into sectoral policies (see Box 3M), and with indicators derived from environmental and natural resource accounting.

TRACKING ENVIRONMENTAL PROGRESS: THE OECD CORE SET OF ENVIRONMENTAL INDICATORS

A major source for environmental indicators is the OECD Core Set of environmental indicators. The Core Set is published regularly and provides a first mechanism to track environmental progress for OECD countries and the factors having a bearing on it. Characteristically, the Core Set is limited in size, and it covers a broad range of environmental issues. It represents a commonly agreed upon set of environmental indicators for OECD countries and, in addition, incorporates major indicators derived from sectoral sets as well as from environmental and natural resource accounting. 

• The PSR model is used to provide a first classification of OECD Core Set indicators into indicators of environmental pressures, indicators of environmental conditions and indicators of societal responses. 
• Indicators of environmental pressures describe pressures from human activities exerted on the environment, including natural resources. 'Pressures' here cover underlying or indirect pressures i.e. the activity itself and trends of environmental significance, as well as proximate or direct pressures (e.g. the use of resources and the discharge of pollutants). 
• Indicators of environmental conditions relate to the quality of the environment and the quality and quantity of natural resources. As such they reflect the ultimate objective of environmental policies. Indicators of environmental conditions are designed to give an overview of the situation (the state) of the environment and its development over time. 
• Indicators of societal responses show the extent to which society is responding to environmental changes and concerns. They refer to individual and collective actions a) to mitigate, adapt to or prevent human-induced negative impacts on the environment, b) to halt or reverse environmental damage already inflicted, and c) to preserve and conserve nature and natural resources.

The second dimension of the conceptual framework is given by a number of environmental issues which reflect major environmental preoccupations and challenges in OECD countries.

PROMOTING INTEGRATION: SECTORAL INDICATORS

The sets of sectoral indicators developed by the OECD to facilitate the integration of environmental concerns into sectoral policymaking are another important source for environmental indicators. Each set is limited to a specific sector and its interactions with the environment. (It should be noted that sets of indicators have been or are being developed for the following sectors: transport policies, energy policies, forestry policies, and agricultural policies.) It describes the sector itself and sectoral trends of environmental significance, along with their effects (positive and negative) on the environment and on natural resources, as well as related economic and policy considerations, placed in a context of sustainable development.

PROMOTING INTEGRATION: ENVIRONMENTAL ACCOUNTING

Finally, environmental indicators are also derived from the broader area of environmental accounting, in both physical and monetary terms. This includes physical natural resource accounts as a tool for sustainable management of natural resources (forest, water), as well as pollution abatement and control and other environmental expenditures.

USING ENVIRONMENTAL INDICATORS

An indicator should help reveal trends and draw attention to phenomena or changes that require further analysis and possible action. The interpretation of an indicator is thus essential. When using environmental indicators in analytical and evaluation work, the OECD respects the following principles: 

• Indicators are only one tool for evaluations and require scientific and policy-oriented interpretation to acquire their full meaning. This is particularly needed to explain driving forces behind indicator changes which form the basis for an assessment.
• Indicators must be reported and interpreted in the appropriate context, taking into account the ecological, geographical, social, economic and structural features of countries. 
• There is no single method of standardization for the comparison of environmental variables across countries. When comparing indicators across countries, the outcome of the assessment will depend on the chosen denominator (GDP, population, land area) as well as on national definitions and measurement methodologies. Nevertheless, standardization is needed to facilitate inter-country comparisons.

ENVIRONMENTAL INDICATORS AND OECD ENVIRONMENTAL PERFORMANCE REVIEWS

In the OECD context, environmental indicators are used as a specific tool for evaluating environmental performance. They support and illustrate the analysis made in OECD Environmental Performance Reviews and provide all reviews with a common denominator. This creates a synergy in which regular feedback is provided on the indicators' policy relevance and analytical soundness.

Using environmental indicators in environmental performance reviews implies linking these indicators to the measurement and analysis of achievements, as well as to underlying driving forces and to the country's specific conditions. Indicators can be linked to explicit quantitative objectives (goals, targets, commitments) or to broad qualitative objectives concerning the efficiency of human activities or the sustainability of natural resource use and development. It is however important to recognize that indicators cannot provide a mechanical measure of environmental performance. They are further complemented with relevant background information and appropriate analysis and interpretation.

In the OECD Environmental Performance Reviews, international indicators derived from OECD work are generally used in combination with specific national indicators and data. These national indicators provide a more detailed picture of the country's situation through a greater sectoral and/or spatial breakdown (e.g. subnational data) and often point at particular issues of concern.

The following two figures (Figures 2 and 3) show examples of environmental indicators published in OECD Environmental Performance Reviews. These examples focus on air pollution: 

NO_x emissions reached 2.75 million tonnes in 1991. The transport sector produced 62 per cent, and power generation 26 per cent. Over most of the last two decades, total NO_x emissions have been around 2.3 million tonnes a year, but there has been a steady increase since 1986, largely attributable to transport. 

Emissions of CO₂ have fluctuated considerably over the last two decades, through 1991 emissions, at 159 million tonnes of carbon, were 12 per cent lower than in 1970. The carbon intensity of primary energy supply fell by 18 per cent between 1970 and 1990 as oil, natural gas and nuclear power replaced coal. Coal is now essentially used for electricity generation; the greater importance of electricity has tended to offset the falling carbon intensity of final consumption, especially in the industrial and commercial sectors.ln contrast with the progress achieved with SO_x, black smoke and lead, emissions and atmospheric concentrations of NO₂ have risen in recent years. The occurrence of photochemical smog, particularly in southern England during summer, raises serious concern about ground-level ozone and therefore about emissions of other substances, such as NO₂ and VOCs, which act as precursors of photochemical oxidants, as well as airborne particulates. To address these problems, emission reduction efforts would need to be directed primarily at the transport sector and electricity generation.

CURRENT OECD WORK

The OECD experience shows that environmental indicators have proven to be cost-effective and powerful tools to track and chart environmental progress and to measure environmental performance. However, experience also shows that an important lag remains between the demand for environmental indicators, the related conceptual work and the actual capacity for mobilizing and validating underlying data. Following the conceptual work which laid down the common framework and basic principles for developing international environmental indicators in the OECD context, progress is now needed in: 

• improving the quality and comparability of existing indicators; and 
• further using environmental indicators in a performance logic and linking them more closely to established goals and commitments, and to results obtained.

This requires greater policy relevance and increased quality of basic data sets. The current quality and timeliness of the environmental data used for calculating indicators remain insufficient in this respect and need improvement as a matter of priority.

Continued work is being done by the OECD to refine the indicators and their measurement. Major efforts are devoted to improving the quality of underlying data, including further international harmonization of these data, and to developing a second generation of performance oriented indicators.

NOTES 

¹ This text reflects the authors own opinions and not necessarily the views of the OECD.