The new metrics are designed to help policymakers assess the effectiveness of policies promoting green technologies and evaluate their economic and ecological impacts
The OECD has developed new indicators to measure green innovation, covering a wide range of areas, from renewable technologies to plastic waste recycling, using data from various sources. The goal is to arm policymakers with reliable indicators that can help them audit the effectiveness of policies aimed at promoting new green technologies and evaluate their economic and ecological impacts. The development and adoption of green technologies are crucial for achieving environmental goals.
However, the current metrics used to measure innovation are not comprehensive across all sectors and countries. Moreover, they are not available for detailed technology categories, can be costly to collect and may not fully capture innovations that make it to the market. They also fail to account for breakthrough innovations driving significant advancements in different fields or industries. This is a serious handicap, particularly in the area of environmental innovation, where rapid and widespread adoption is crucial in addressing climate change, biodiversity loss, and pollution.
Addressing these lacunae, the OECD has made significant progress by developing new metrics to measure innovation across different stages of the process. For example, it uses patent data to gauge innovation in environment-related technologies across countries, and it has created plastic innovation metrics using patents and trademarks to track trends over time and across countries. This proactive approach is a positive indication of advancements in green innovation metrics.
The current rate of innovation is not keeping up with the challenge of achieving carbon neutrality. Over the last decade, the pace of climate-related breakthroughs in technology, as indicated by the proportion of patent filings in climate-related technologies compared to all technology areas, has decreased. This decline is affecting nearly all relevant technologies and is noticeable across almost all major innovating countries worldwide.
On a more optimistic note, the use of current technologies appears to be increasing, as shown by the growth in trademark filings for climate-related products and services. This indicates that, despite reduced research and development efforts in climate-related technologies, the spread and commercialization of existing technologies have continued to grow. This trend is a positive indicator of the potential impact of these technologies in addressing environmental challenges.
Venture capital (VC) funds firms developing high-risk, high-reward innovation. Since these firms are typically small, young and highly inventive, the OECD has increasingly drawn on VC capital data to calculate innovation efforts in breakthrough technologies. Its analysis, based on an evaluation of VC funds raised for green innovation and the number of such deals, reveals that both have grown steadily since 2007.