Professor Jeffrey Sachs and Professor John Helliwell discuss how governments can benefit from the first-ever Global Happiness Policy Report.
Professor Jeffrey Sachs and Professor John Helliwell discuss how governments can benefit from the first-ever Global Happiness Policy Report.
The SDGs are a universal agenda of sustainable development, calling on all nations to pursue a holistic strategy that combines economic development, social inclusion, and environmental sustainability. We are gratified that throughout the world, local and national governments are rallying around the goals, seeking ways to incorporate them into planning processes. Businesses, universities, and civil society are also recognizing that the SDGs and the Paris Climate Agreement (incorporated into the sustainable development agenda as SDG 13) require a new orientation of strategy and national planning.
The SDGs rightly emphasize a universal agenda that requires all countries – both rich and poor alike – to take decisive actions to support sustainable development. In this year’s report we note that development patterns of the rich countries may generate adverse “spillovers” that may hinder the ability of poorer countries’ to achieve the SDGs. For example, the high consumption levels, banking secrecy and tax havens, and weapons exports, by the rich countries may severely inhibit sustainable development in poorer and more vulnerable countries. On the other hand, international development finance by high-income donor nations also directly supports the SDGs.
The 2017 SDG Index and Dashboards report generates “tough grading” for all countries, including the richest ones. We choose this approach not to be punitive or pessimistic about the prospects for dramatic improvements, but to draw attention to the most urgent SDG-related challenges facing each country for each SDG.
Agenda 2030 and the Sustainable Development Goals (SDGs, Figure 1), which were adopted by all member states of the United Nations in 2015, describe a universal agenda that applies to and must be implemented by all countries, both developed and developing.
To help fill a major gap in last year’s report and in SDG discussions more generally, we focus this year’s report on countries’ global responsibilities and international spillover effects in achieving the SDGs. Such spillovers must be understood and measured since countries cannot achieve the goals if others do not do their part. For example, rising sea levels will submerge Small Island Developing States (SIDS) unless all countries curb greenhouse gas emissions, and African elephants and rhinos face extinction unless demand for ivory and horns is curbed outside of Africa. Poor countries require increased Official Development Assistance to co-finance the investments needed to achieve the Goals, and all countries must avoid a race to the bottom on taxation and transparency to protect the public revenues required to finance the goals. Only if such positive and negative spillovers across countries are managed carefully can the promise of Agenda 2030 be fulfilled, particularly since negative effects tend to flow from rich to poor countries. It is therefore critical to understand spillover effects and to measure them as part of SDG monitoring, as done for example by the OECD.
Our effort is motivated by the realization that traditional SDG metrics mostly ignore such spillover effects and therefore favor the high-income countries that tend to generate significant negative spillover effects and that have the greatest capacity to misappropriate the resources of the global commons.
In this report we consider three groups of international spillover effects:
Environmental spillovers, include anthropogenic climate change; transboundary pollution and pollution embedded in trade; biodiversity loss embedded in trade; and the misuse of the global commons, such as overfishing in the high seas. Unfortunately, data are limited or unavailable for some of these spillovers.
Spillovers related to the economy, finance, and governance include official development finance and policies related to international investments; trade rules; inefficient tax competition; international tax evasion; banking secrecy; and cross-border corruption.
Security spillovers, include trade in arms, particularly in small arms; international crimes; and investment in conflict prevention (positive spillover).
Overall, the nine spillover indicators affect six goals: SDG 6 on water, SDG 12 on sustainable consumption and production, SDG 13 on climate change, SDG 15 on terrestrial biodiversity, SDG 16 on peace and justice, and SDG 17 on the global partnership. Since high-income countries tend to generate negative spillover effects vis-à-vis the poorer countries, the inclusion of spillover indicators changes the scores and rankings attributable mainly to the high-income countries.
RESULTS AND INTERPRETATION
The SDG Index
The SDG Index score signifies a country’s position between the worst (0) and best (100) outcomes. So Sweden’s overall index score of 85.6 suggests that the country is on average 85.6% of the way to the best possible outcome across the 17 SDGs.
Three Scandinavian countries (Sweden, Denmark, and Finland) top this year’s SDG Index, but they score significantly below the maximum score of 100. Each of these countries scores “red” on at least one SDG (Figure 3), particularly on climate change and other environmental SDGs. The addition of the spillover indicators discussed in the next chapter has lowered the SDG Index score for many rich countries, particularly Switzerland, the United States, and several Gulf States. However, additional spillover indicators represent only a subset of SDG Indicators, so they do not profoundly change the overall rankings in the SDG Index.
Poorer countries tend to be closer to the bottom of the rankings. This result is not surprising, since SDGs 1 to 8 focus on ending extreme poverty in all its forms. Moreover, poorer countries tend to lack adequate infrastructure and the mechanisms needed to manage key environmental issues that are the focus of other SDGs. For this reason, the commitments to provide adequate development assistance and climate finance made by rich countries at the 2015 Financing for Development Summit in Addis Ababa and the Paris Climate Agreement are a critical part of the SDGs.
Contribution of International Spillovers
The data on each spillover indicator (Annex 1) show that high-income countries tend to generate negative SDG spillover effects for poorer developing countries. Figure 2 illustrates this point further. It plots countries’ average performance on the spillover indicators (note that the vertical axis is inverted so that worst performers on spillover indicators are at the top) against per capita GDP PPP (horizontal axis). Negative spillover effects are most common among wealthier countries, but there’s high variation in spillover effects. Some high-income countries generate large negative spillovers (e.g. Belgium Israel, Luxemburg, Netherlands, Switzerland, Singapore, United Arab Emirates, UK, USA) while others score above 70 on spillovers (e.g. Australia, Canada, Denmark). This suggests that good SDG outcomes are often associated with negative spillover effects, but this effect can be tempered through policies.
These results underscore that rich countries in particular need to address negative spillover effects in their SDG implementation strategies and reporting.
The SDG Dashboards for OECD countries show that every rich country faces major challenges in meeting several SDGs, as indicated by a red rating. The greatest challenges exist on sustainable consumption and production (SDG 12), climate change (SDG 13), clean energy (SDG 7), and ecosystem conservation (SDGs 14 and 15). Here the international spillover effects that are included in the 2017 SDG Index report show up strongly. Several OECD countries are rated “red” on SDG 2 because their agricultural systems are unsustainable, and some countries are rated low because of very high rates of obesity, which we interpret to be a measure of malnutrition. A large number of OECD countries face major challenges in achieving SDG 17 because of their insufficient financial contributions towards international development cooperation, banking secrecy, or unfair tax competition. Some experience low growth and high unemployment (SDG 8) as well as major shortfalls on gender equality (SDG 5). Notably, several OECD countries score “red” on income inequality (SDG 10) and SDG 16 (peace and sound institutions). We recommend that OECD countries carefully study their performance against individual indicators to identify the areas where greater progress is required.
The dashboards for East and South Asia outperform many other developing regions on the SDGs, but several challenges do remain. While tremendous progress has been made on reducing extreme income poverty (SDG 1), the dashboard shows that the region faces major SDG challenges in health (SDG 3) and education (SDG 4). SDG 2 (improved nutrition and sustainable agriculture) comes up as red across the region since countries either face high levels of malnutrition and stunting or unsustainable agricultural practices. There are still significant shortfalls on ensuring access to basic infrastructure services and innovation (SDGs 6, 7, 9) across the region. Many countries face major challenges on ensuring gender inequality (SDG 5) and promoting environmental sustainability (SDGs 11, 12, 13, 14, 15, as well as SDG 2 on sustainable agriculture). Overall, the dashboard shows that the region needs to better balance its economic performance with environmental sustainability. The expanded data used for the 2017 SDG Index also suggest that SDG 16 (peaceful and inclusive societies) represents major challenges in countries across the region.
Countries in Eastern Europe and Central Asia have met some of the most pressing challenges in providing social services and access to basic infrastructure, though greater progress is needed to achieve these SDGs. The region has largely ended extreme income poverty (SDG 1). The greatest challenges remain in promoting health (SDG 3), achieving gender equality (SDG 5), addressing renewable energy and climate change (SDGs 7, 13), sustainable consumption and production (SDG 12), and protecting ecosystems (SDGs 14, 15). Available data for SDG 2 show that many countries also need to shift towards more environmentally sustainable agricultural practices and improve nutrition outcomes. Under SDG 9 (infrastructure) countries will need to prioritize greater access to information and communication technologies and promote innovation. A few countries in the region exhibit very high rates of income inequality (SDG 10), and insecurity remains widespread (SDG 16).
Extremely high levels of inequality (SDG 10) are a critical challenge across Latin America and the Caribbean. The same applies to the promotion of peaceful societies (SDG 16) with many countries scoring poorly on measures of insecurity and violence. Given the relatively higher levels of per capita incomes in the region it is notable that some countries continue to face major challenges in health (SDG 3), education (SDG 4), as well as poor nutrition (SDG 2). The expanded indicators for the 2017 SDG Index show that countries in the region need to promote innovation (SDG 9) and improve employment outcomes (SDG 8). The SDGs’ stronger focus on environmental sustainability brings out major challenges across the region in meeting SDGs 12 (sustainable consumption and production), 13 (climate change), 14 (oceans), and 15 (terrestrial ecosystems). As the poorest country in the region, Haiti faces particular challenges across the full breadth of the SDGs.
In the dryland Middle East and North Africa food security and sustainable agriculture (SDG 2) and sustainable water management (SDG 6) are high-priority challenges in most countries. Several countries face major challenges in achieving gender equality (SDG 5). Our expanded indicators now underscore the importance of promoting innovation and investments in communication technologies across the region. The data on SDG 8 show that many countries are not growing fast enough and experience high rates of unemployment. These countries also face major challenges in decarbonizing their energy systems to fight climate change (SDG 13), and in conserving marine (SDG 14) and terrestrial (SDG 15) ecosystems. Several countries perform poorly across the full range of SDGs owing to instability and conflict, which also show up in SDG 16. The high-income countries in the region generate substantial negative spillover effects on other countries.
As the world’s poorest region, albeit one that is now experiencing important advances, Sub-Saharan Africa faces nearly across-the-board challenges in meeting the SDGs. In particular, major challenges remain in ending extreme poverty (SDG 1) and hunger (SDG 2), health (SDG 3), education (SDG 4), and access to basic infrastructure (SDGs 6 – 9), while noting the tremendous progress that was made in many of these areas under the Millennium Development Goals. The broader SDGs bring out additional challenges for Sub-Saharan Africa that require urgent action. These include sustainable urban development (SDG 11) and reducing high inequality (SDG 10). Similarly, significant challenges remain on SDGs 16, including peace, security, and institutions. Countries in the region fare much better on sustainable consumption and production (SDG 12), climate change (SDG 13), and terrestrial ecosystems (SDG 15), underscoring that richer countries are responsible for a disproportionate share of environmental pressure relating to these goals. The remaining red scores on Goal 17 highlight that Sub-Saharan Africa has significant potential in mobilizing domestic revenue collection.
We propose five major findings from this year’s SDG Index report:
1. Every country faces major challenges in achieving the SDGs: The SDG Dashboards highlights some “red” priority SDGs for every country. Even “yellow” and “orange” of course signify important room for improvement and should be interpreted as a major challenge, particularly in wealthier countries. Poor countries face significant challenges in ending extreme poverty in all its forms, social inclusion, access to essential infrastructure, and many forms of environmental degradation. Richer countries face more specific but nonetheless major challenges in areas such as climate change mitigation, inequality, sustaining the global partnership, and targeted challenges in areas such as nutrition, gender equality, or education.
2. Poor countries need help to achieve the SDGs: The SDGs are undoubtedly a very bold agenda. It is clear from this analysis, that the poorest countries will face major challenges in achieving the SDGs. They will need considerable global assistance to supplement national leadership. This assistance should come in many forms: foreign direct investment, global tax reform to enable the poor countries to fight tax evasion by international investors, technology sharing, capacity development, and of course, more Official Development Assistance.
3. The universal SDG agenda contains important spillover effects: Actions by rich countries in particular affect other countries’ ability to achieve the SDGs. Examples include environmental spillovers, such as pollution embedded in international trade, transboundary effects of resource use, or the use of global commons, such as oceans and the high seas. There are also important spillovers related to the economy, finance, and governance, including unfair tax competition by a few tax havens, deliberately opaque financial systems that foster money laundering, corruption, tax evasion, as well as insufficient financing for global public goods. And finally, trade in weapons and insufficient support for peacekeeping generate important security spillovers. Rich countries in particular should spell out in their SDG strategies how they plan to tackle these spillover effects so that every country can achieve the SDGs.
4. Countries should usefully benchmark themselves against their peers as well as against the goal thresholds: The SDG Index and Dashboards highlight substantial variation across countries in a region or income group. In combination, the SDG Index and Dashboards can help countries benchmark their progress against that of their peers and against the top performers to understand reasons for differential performance and to devise better strategies to achieve the SDGs by 2030.
5. Countries and international agencies need to make substantial investments in statistical capacity to track the SDGs: Despite our best efforts to include as many indicators as possible, a number of important data gaps remain. Addressing these gaps will require increased investments in statistical capacity and other forms of data collection especially but not only in low-income developing countries. Table 6 summarizes some of the most important indicator and data gaps.
To read the full report click here
On May 20th, 2017, Professor Jeffrey Sachs addressed the Global Solutions T20 Summit in Berlin. In this speech, Sachs puts our current economic, social and environmental crises into historical context and addresses the importance of new ideas and solutions to the most pressing issues facing the world today, specifically those in the 2030 agenda of Sustainable Development Goals that were unanimously decided upon in September 2015 by a group of world leaders.