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Glossary


Move the slider to the desired time period. All measures are calculated using rolling 5-year averages, starting from 1995-1999 and ending in 2016-2020.


Mission

The transition to the green economy is teeming with risks and opportunities. Our mission is to help countries identify them.

No two countries are the same

When it comes to navigating growth opportunities in the green economy, each country is different. Each has unique production capabilities and faces a different landscape of green growth opportunities and transition risks. Consequently, one-size-fits-all green industrial strategy policies are likely to fall short.

A map of green competitiveness, transition risk - and future green growth possibilities

Drawing on an expansive dataset of traded green* products , the Green Transition Navigator identifies countries' current competitive strengths and maps out new export opportunities that

(i) align with their existing productive capabilities, and
(ii) offer advantages in terms of technological sophistication and greater potential to open up future diversification opportunities.

The Green Transition Navigator also highlights areas of specialization which are at risk of stranding, and indicates the likely ease of transitioning to climate compatible areas of comparative advantage.

Team

The Green Transition Navigator has been developed by Pia Andres (Grantham Research Institute at the London School of Economics and Oxford Martin School) and Dr Penny Mealy (World Bank Group, SoDa Labs at Monash Business School, Institute for New Economic Thinking at the Oxford Martin School and the Oxford Smith School of Environment and Enterprise).

Methodology

The Green Transition Navigator is based on previous research by Mealy and Teytelboym, 2020, which developed a quantitative methodology for measuring countries' current green production capabilities, identifying new green export opportunities, and predicting future green export growth.

It also incorporates recent work by Andres et al, 2023, which develops measures of country lock-in and transition possibilities to climate-compatible areas of comparative advantage, based on countries' exports of brown products.

*Green products - or products with environmental benefits - are based on a compilation of the APEC, OECD and WTO green goods classifications.

*Brown products - those likely to decline in use if the world mitigates climate change - come from a list of products compiled by Andres et al, 2023.

The methodology draws on existing work in economic geography that has shown that places are more likely to develop a competitive advantage in proximate products and sectors that involve similar (or 'related') underlying production know-how to those they are already competitive in (Hidalgo et al., 2007a; Neffke et al., 2011).

It also leverages previous research on economic complexity, which has demonstrated that developing competitiveness in more complex products or industries tends to generate higher future growth and diversification outcomes (Hidalgo et al., 2007a; Hidalgo et al., 2007b; Hausmann et al., 2007).

The Navigator measures are calculated using country-level trade data at the HS1992 6-digit level from CEPII's BACI database. The data shown is based on annual averages in trade values for rolling 5-year-periods from 1995-1999 to 2016-2020 (where no time range is selected or shown, the data is based on the most recent period, which is 2016-2020). This approach was taken in order to prevent the analysis from being skewed by short-term fluctuations in trade.

Importantly, the analysis presented by the Navigator is not prescriptive or intended to be definitive. It is up to the user to consider the relative merits of proximity and complexity, and to use and interpret the analysis presented alongside other relevant indicators and information. While empirical analysis has shown that countries have a higher probability of developing future competitiveness in more proximate products, this does not mean that targeting more distant sectors is without its benefits.

Please give credit when using the data or analysis presented here in other work. Suggested citation:
Andres, P and Mealy, P (2023) Green Transition Navigator. Retrieved from www.green-transition-navigator.org.