This chapter examines how society and markets shape the generation and application of new ideas and solutions for sustainable growth, and how markets and the economy evolve in response to environment-related innovation. It presents indicators of how society views today’s main environmental challenges compared to others, and societal attitudes towards the role of science, technology and innovation as potential solutions. It also examines how consumers regard environmentally friendly goods and services. It tracks increasing affordability of renewable technologies and mobility solutions as examples of markets transformed by innovation and concludes with measures of wider economic change.
Measuring Science and Innovation for Sustainable Growth
Abstract
This chapter examines how society and markets shape the generation and application of new ideas and solutions for sustainable growth, and how markets and the economy evolve in response to innovation.
Different survey-based data sources reveal how society views today’s main environmental challenges compared to others, as well as citizens’ positive attitudes about the role of science, technology and innovation (STI) in providing potential solutions. Specifically:
More than one in three people (35%) who responded to the 2022 OECD Environmental Policies and Individual Behaviour Change (EPIC) survey say they are concerned about climate change and other environmental issues. Slightly higher numbers are concerned about personal safety and the economy (42% and 41%, respectively). In the European Union, 78% agree that environmental issues have a direct effect on their daily lives and health.
People are generally optimistic about STI as a tool for solving environmental issues and energy-related challenges. The percentage of respondents who agree or strongly agree that environmental issues will be resolved primarily through technological progress is the highest in Israel (62%), followed by Sweden (48%) and United States (47%).
Solving energy problems features highly as a desired societal priority for scientists to address. There are discrepancies, however, between what the public would like scientists to focus on and what they perceive them to be focusing on.
Trust in climate scientists is high, reaching 85% in India and 77% in the People’s Republic of China (hereafter “China”). In these countries, there is also a high degree of trust that governments follow climate science, but there is less consensus on this issue in other countries. People generally want more action on climate and do not think governments are doing enough.
Subsidies for low-carbon energy technologies receive more than 55% of public support in high-income countries and more than 70% in middle-income countries, making them one of the most supported policies. Evidence suggests that carbon taxes become more acceptable when revenues are channelled into low-carbon technology subsidies.
Three out of four respondents believe climate action can have important economic co-benefits by spurring innovation and enhancing firms’ competitiveness.
Nearly three out of four respondents (73%) consider a product’s impact on the environment to be “very important” or “rather important” when making purchasing decisions. When asked to reflect on past purchases, this drops to one out of four respondents.
Consumers regard the adoption of new environmentally friendly goods and services favourably, but affordability considerations typically come first, and there is uncertainty about environmental claims. Specifically:
Sustainability labels are a key tool for providing consumers with information about the environmental attributes of products. About one of four respondents in Italy (28%), Romania (26%) and Cyprus (23%) say they “often” buy products with environmental labels, in contrast with 8% of respondents who reply the same in Belgium, Czechia, Estonia, Latvia and the Slovak Republic.
Some 39% of new food products launched in the European Union make sustainability-related claims (50% when organic claims are included).
This chapter provides evidence of the fast-accelerating affordability of renewable energy technologies and mobility solutions as examples of markets transformed by innovation and concludes with measures of wider economic change. Key examples include:
At the end of 2024, the electric car fleet had reached almost 58 million, about 4% of the total passenger car fleet and more than triple the total electric car fleet in 2021.
Electricity generated using key renewable energy technologies has become cheaper and scaled rapidly as a result. The levelised cost of electricity (LCOE) of solar photovoltaic (PV) was over half less (56%) than the weighted average fossil fuel-fired alternatives in 2023, having been four times more expensive in 2010.
In 2010, the global weighted average LCOE of onshore wind was 23% higher than the weighted average cost of new capacity additions for fossil fuels. By 2023, however, the global weighted average LCOE of new onshore wind projects was 67% lower than the weighted average fossil fuel-fired cost.
Other renewable energy technologies are still at earlier stages of technology readiness, and their installed capacity is much more limited. This includes, for instance, offshore wind, where total global installed capacity only reached 72 gigawatts (GW). In 2023, the installed capacity of onshore wind was more than ten times higher, at 943 GW. Bioenergy technologies, including biogas, liquid biofuels, concentrated solar power (CSP), geothermal and marine renewables, were all at 20 GW of installed capacity or less in 2023.
Measurement rationale
Effective use by the public of processes and outputs of STI is essential for effectively addressing environmental and energy challenges. Societal awareness of and trust in the scientific consensus on the state of the climate help inform political debate and individual consumption and lifestyle choices. Indicators of societal views on the severity and importance of environmental challenges, as well as on the possible courses of action, including the role of innovation policies, can be extremely helpful for guiding communication and engagement, in addition to informing an objective assessment of societal acceptability of and buy-in into different policy options under consideration.
However, measuring societal views on these aspects is fraught with methodological challenges, such as framing effects and country specificities, which prevent the consolidation of truly global measurement exercises (Box 5.1). This section presents a number of recent studies that have captured salient aspects of societal views on the role of science and innovation in the face of resource and environmental challenges. It is important to note that individual indicators will rarely be proof of specific hypotheses about drivers and implications of reported views. These often need to be considered in combination with complementary evidence.
Representative multi-country surveys with large samples are a key measurement tool in attempting to forge a representative and internationally valid overview of citizen values and attitudes around STI in the context of sustainable growth. The indicators in this chapter draw on the following multi-country surveys:
OECD EPIC: The OECD Environmental Policies and Individual Behaviour Change (EPIC) surveys explore the drivers of household behaviour and how policies may affect decisions in key consumption areas. Following two previous rounds of the EPIC survey in 2008 and 2011, the OECD implemented a third round in 2022 to more than 17 000 households across 9 countries: Belgium, Canada, Israel, France, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States. The third round examined household behaviour related to four key areas: energy, transport, waste and food consumption.
EU Eurobarometer: The Eurobarometer is a series of public opinion surveys conducted regularly by the European Commission to gauge public attitudes about various issues across all EU Member States since 1973. It collects data on topics such as trust in institutions, social and political values, economic concerns and attitudes toward EU policies. The surveys aim to compare countries over time. The special Eurobarometer 550 edition on the environment surveyed 26 346 respondents across the European Union and was carried out in 2024.
TISP: The Many Labs study, “Trust in Science and Science-Related Populism” (TISP), is a global, pre-registered, cross-sectional online survey with 71 922 participants across 68 countries. The survey measures individuals’ trust in science and scientists; science-related populist attitudes; perceptions of the role of science in society, policy making, and daily life; science-related media use and communication behaviour; attitudes to climate change and support for environmental policies; personality traits; political and religious views; and eight demographic characteristics. The data were collected between November 2022 and August 2023. More information about sampling and data post-processing can be found in Mede et al. (2025[1]).
BBVA Foundation: The BBVA Foundation is a Spanish non-profit organisation established by BBVA (Banco Bilbao Vizcaya Argentaria) to promote research, culture and social initiatives. The BBVA Foundation conducted an empirical study in 2024 of scientific culture in 18 countries, including Bulgaria, Czechia, Denmark, Estonia, France, Germany, Hungary, Israel, Italy, the Netherlands, Poland, Portugal, the Slovak Republic, Romania, Spain, Türkiye, the United Kingdom and the United States. It involved 26 068 respondents.
Dechezleprêtre et al. (2022[2]): An academic survey of more than 40 000 respondents in 20 countries that focused on understanding attitudes toward climate change and climate policies. The dataset includes a rich set of socio-demographic and lifestyle variables, such as car usage, public transport availability or education allowing for detailed subgroup analysis.
As discussed in Chapter 1, surveys have limitations, such as response bias and the inability to capture complex perspectives in depth. Nevertheless, they are often the only available source of quantitative information. The surveys used here have different limitations, which are typically discussed in the accompanying documentation. These include issues related to oversampling of certain segments of the population. For instance, the TISP survey suffers from oversampling of more educated population segments as it was fielded as an online survey, considerably limiting the representability of populations in certain countries with lower Internet penetration. These issues are often at least partially mitigated either ex-ante through survey design or ex-post through statistical techniques.
Source: OECD (2022), Environmental Policies and Individual Behaviour Change Survey, in OECD (2023[3]), How Green is Household Behaviour?: Sustainable Choices in a Time of Interlocking Crises, https://doi.org/10.1787/2bbbb663-en; Eurobarometer (2024[4]), Attitudes of Europeans Towards the Environment, https://europa.eu/eurobarometer/surveys/detail/3173; Mede et al. (2025[1]), “Perceptions of science, science communication, and climate change attitudes in 68 countries – the TISP dataset”, https://doi.org/10.1038/s41597-024-04100-7; BBVA Foundation, Public opinion study on scientific culture, https://www.fbbva.es/wp-content/uploads/2024/03/appendix-scientific-culture-international.pdf; Dechezleprêtre et al. (2022[2]), “Fighting climate change: International attitudes toward climate policies”, https://doi.org/10.1787/3406f29a-en.
Awareness and perceived importance of environmental challenges
Evidence from the 2022 OECD Survey on Environmental Policies and Individual Behaviour Change (EPIC) suggests that concerns about climate change and other environmental issues are relatively salient, with 35% of respondents who think these issues are very important. However, environmental concerns remain less salient than personal safety and economic concerns, which are rated as very important by an average of 42% and 41% of respondents, respectively Figure 5.1). Concern for the climate and the environment was expressed to a greater extent by women, those with higher education and older respondents.
Percentage of respondents rating various issues as very important
Note: This survey item asked respondents: “How important are each of the following issues to you personally?” Respondents rated the level of importance on a 5-point scale from “not at all important” to “very important”.
Source: OECD (2022), Environmental Policies and Individual Behaviour Change Survey, in OECD (2023[3]), How Green is Household Behaviour?: Sustainable Choices in a Time of Interlocking Crises, https://doi.org/10.1787/2bbbb663-en.
Of all the environmental issues covered in the survey, climate change was ranked as one of the top three issues of concern in all countries. Further findings indicate that resource scarcity (e.g. water or food) and pollution (water, outdoor air and plastic pollution) and the fragility of land ecosystems among the top three issues of concern (OECD, 2023[3]).
The Eurobarometer surveys, which measure public attitudes on various issues in the European Union, report a somewhat higher degree of concern about environmental issues. More than three out of four Europeans (78%) agree that environmental issues have a direct effect on their daily lives and their health. In particular, in countries such as Cyprus, Greece, Italy, Malta, Portugal and Spain, there is clear concern, with around nine or more citizens out of ten (88-98%) saying the environment impacts their daily lives and health. These results are nearly identical to those from the previous survey conducted in 2019.
Views of innovation as a potential solution to environmental and energy challenges
Measures of confidence in the potential contribution of scientific and technological advancements help deepen understanding of citizens’ willingness to support a range of policy measures with such specific goals. Responses to more nuanced questions on trust can help inform the governance mechanisms that may need to be put into place.
Respondents to the OECD EPIC survey are generally confident that policy action and technological innovation will be able to effectively address environmental issues. Some 45% agreed or strongly agreed with the statement in 2022, compared to 38% in 2011. The percentage of respondents who agree or strongly agree is the highest in Israel (62%), followed by Sweden (48%) and United States (47%) (Figure 5.2). While it is not possible to make precise direct comparisons of results across the 2011 and 2022 rounds of the EPIC survey due to differences in samples across survey rounds, there has been a substantial increase in the percentage of those who agree or strongly agree with the statement in Canada, Israel, Sweden, France and Switzerland, whilst only in the Netherlands the proportion declined.
The Eurobarometer survey that focused on the environment asked respondents about their views on the four most effective ways of tackling environmental problems. Investing in research and development (R&D) to find technological solutions received a high endorsement, with 47% of respondents across the European Union on average classifying it among the most effective measures. Sweden, Denmark, and Finland lead Europe with this belief, at 68%, 61% and 59% of respondents, respectively (Figure 5.3).
Percentage of respondents who agree or strongly agree with the statement, “Environmental issues will be resolved primarily through technological progress”
Note: Respondents stated their level of agreement on a five-point scale from “strongly disagree” to “strongly agree”.
Source: OECD (2022), Environmental Policies and Individual Behaviour Change Survey, in OECD (2023[3]), How Green is Household Behaviour?: Sustainable Choices in a Time of Interlocking Crises, https://doi.org/10.1787/2bbbb663-en.
Percentage of respondents reporting that “Investing in R&D to find technological solutions is one of the four most effective ways of tackling environmental problems”
Note: Response to the question “In your opinion, which of the following actions would be the most effective way of tackling environmental problems (1st to fourth reported)?”
Source: Eurobarometer (2024[4]), Attitudes of Europeans Towards the Environment, https://europa.eu/eurobarometer/surveys/detail/3173.
The BBVA Foundation survey benchmarks views on the environmental problem-solving potential of science and technology, with respect to clean energy, global warming and biodiversity loss, against a number of other issues, including health-related issues, poverty, inequality, wars and food shortages. Expectations regarding science and technology’s power to solve different problems are highly favourable in the health field, including cancer treatment, ageing in good health and dealing with pandemics like the coronavirus (COVID-19). They are also positively considered with respect to the shortage of clean energy and, to a lesser extent, global warming. Expectations are also high, though more subduedly so, with regard to the potential of science and technology to address the biodiversity crisis. Respondents across all countries expressed more reservations about its potential to address social problems like poverty and inequality or to aid in resolving armed conflicts (Figure 5.4).
Overall, people assign a high priority to solving energy problems, although the highest priority is assigned to improving public health, based on results from the TISP survey. Responses here suggest a substantial discrepancy between what the public perceives science is currently prioritising and what they expect scientists to prioritise. Though this discrepancy is the highest for the goal of reducing poverty, it is also substantial for the goal related to solving energy problems (Figure 5.5).
Percentage of respondents answering “a lot” or “quite a lot” to the question, “To what extent do you think science and technology can help to solve the following issues?”
Note: Europe total = Bulgaria, Czechia, Denmark, Estonia, France, Germany, Hungary, Italy, the Netherlands, Poland, Portugal, the Slovak Republic, Romania, Spain; Eastern Europe = Rest of Europe = Bulgaria, Czechia, Estonia, Hungary, Poland, the Slovak Republic and Romania; Rest of Europe = Denmark, France, Germany, Italy, the Netherlands, Portugal, Spain, United Kingdom.
Source: BBVA Foundation, Public opinion study on scientific culture, https://www.fbbva.es/wp-content/uploads/2024/03/appendix-scientific-culture-international.pdf.
Trust in climate science and scientists
Indicators of trust in and support for scientific enquiry on key societal issues are of key importance to the governance of science and its communication. According to the TISP cross-sectional population survey (Mede et al., 2025[1]), trust in climate scientists remains high in most countries, despite concerns about media misrepresentation and “sticky” misinformation (Coen et al., 2020[5]; Leiserowitz et al., 2012[6]; van der Linden et al., 2017[7]). For most countries, more than 50% of respondents “strongly” or “very strongly” trust scientists in their country who work on climate (Figure 5.6). India and China score particularly high on trust in climate scientists (85% and 77% respectively), followed by New Zealand and Australia.
Average priority scores from 1 to 5, 1 being lowest, 5 being highest
Note: Participants were asked how much scientists should prioritise tackling four goals (1= very low priority – 5=very high priority) and how strongly they believe science aims to tackle these goals (1= not at all – 5= very strongly).
Source: Mede et al. (2025[1]), “Perceptions of science, science communication, and climate change attitudes in 68 countries – the TISP dataset”, https://doi.org/10.1038/s41597-024-04100-7.
Percentage of respondents answering “strongly” or “very strongly” to “How much do you trust scientists in your country who work on climate change?”
Source: Mede et al. (2025[1]), “Perceptions of science, science communication, and climate change attitudes in 68 countries – the TISP dataset”, https://doi.org/10.1038/s41597-024-04100-7.
Views about government action on climate and innovation
From a science and innovation policy perspective, it matters not only what people think about science and technology and their potential, but also how they view the government’s role and policies in this area. Survey data suggest that perceptions of policy alignment with climate science are closely related to views of policy action on climate change (Figure 5.7). On average, the shares of respondents who agree or strongly agree with relevant statements about governments acting in line with climate science and doing enough on climate change are substantially lower than the reported levels of public trust in climate scientists. China and India score particularly high on both measures: 79% of respondents in China agree that the government is acting in line with climate science, and 76% believe the government is doing enough to avoid climate change. In India, these percentages are 65% and 63%, respectively.
Percentage of respondents who “agree” or “strongly agree” with “I believe my government is acting in line with climate science” and “I believe my government is doing enough to avoid climate change”
Note: Following Hickman et al. (2021[8]), participants indicated their level of agreement with seven statements about government action on climate change. In this case, the statements were: 1) “I believe my government is acting in line with climate science”; and 2) “I believe my government is doing enough to avoid climate change”. Responses ranged from “strongly disagree” to “strongly agree”.
Source: Mede et al. (2025[1]), “Perceptions of science, science communication, and climate change attitudes in 68 countries – the TISP dataset”, https://doi.org/10.1038/s41597-024-04100-7.
A study by Dechezleprêtre et al. (2022[2]) offers multi-country evidence on the public acceptability of specific policies mitigating climate change, including subsidies to low-carbon technologies. Figure 5.8 shows marked differences in support for policies across countries. Subsidies for low-carbon energy technologies receive support from more than 55% of people in high-income countries and more than 70% in middle-income countries, making them one of the most supported policies. Moreover, while carbon taxes, especially taxes on fossil fuels, appear to be among the least popular policies, the use of revenue matters substantially. Carbon taxes with revenues used to subsidise low-carbon technologies are much more popular than a carbon tax with equal cash transfers or where the revenue is used to reduce corporate income taxes. The EPIC survey also examined specific policy measures in the transport sector, which confirm the high popularity of subsidies in low-carbon technologies (OECD, 2023[3]).
In the European Union, three out of four respondents agree that taking action on climate change will lead to innovation that will make EU companies more competitive (Figure 5.9). While this is an overall positive view, it entails a 3 percentage-point decline from the previous round of the Eurobarometer survey carried out in 2021. In the most recent 2023 round, levels range from 89% in Malta, 88% in Cyprus and 87% in Greece and Italy to 51% in Estonia, 53% in Czechia and 56% in Latvia.
Respondents who indicated somewhat-to-strongly support, as a share of total
Note: Policy views were elicited on a five-point scale ranging from “strongly oppose” to “strongly support”.
Source: Dechezleprêtre et al. (2022[2]), “Fighting climate change: International attitudes toward climate policies”, https://doi.org/10.1787/3406f29a-en.
Percentage of respondents who agree that “taking action on climate change will lead to innovation that will make EU companies more competitive”
Source: European Union (2023[9]), Climate Change – Report, https://data.europa.eu/doi/10.2834/653431.
Measurement rationale
Within the boundaries set by affordability considerations, values and trust shape changes in consumers’ preferences and behaviour, driving shifts in demand for goods and services with features that impact the environment (OECD, 2025[10]). Measures of consumer preferences and actual behaviour around new goods and services with significantly improved environmental performance are highly relevant inputs to businesses considering whether to invest in developing and implementing the technologies and practices that render those possible, beyond what existing regulatory standards might dictate. Expectations of consumers willing to pay a “green” premium define the parameters of emerging markets for environmentally superior goods and services. Additionally, data that confirms or revises expectations of consumer demand for such products is particularly relevant for investors. It also helps governments assess the policy measures that are most appropriate in each context. Expansion of markets for environmentally superior goods and services is likely to yield progressive reduction of their relative production costs, which may, in some cases, result in visible aggregate environmental effects without the need for stringent forms of regulation. Measurement is key for understanding the interconnected dynamics between consumers, businesses and policymakers, however, there are few data sources that provide reliable and internationally comparable indicators (Box 5.2).
There are few international initiatives that gather evidence on consumer preferences and attitudes concerning the environmental attributes of goods and services. The measurement of consumer preferences needs to account for different attributes and variations, and how those are framed in surveys can often shift responses. Furthermore, different markets and geographical areas have unique features that make comparisons particularly challenging. Many private companies specialised in market insights undertake consumer sentiment surveys, with variations in how survey participants are recruited into the study and encouraged to participate.
This section draws in part on the Flash Eurobarometer 535 survey, which interviewed 26 635 people across the European Union, a Joint Research Centre (JRC) study on sustainability labels in the food sector, and a forthcoming OECD sustainable consumption study.
Revealed preference methods, based on actual consumer behaviour, which track “dollars rather than sentiments”, offer a more robust approach to measuring consumer preferences but are constrained by the limited availability of micro-transaction data, which is often based on specific supplier and market platforms. Recent studies, like those by Ito and Zhang (2020[11]), have used data such as air purifier purchases, while others rely on environmental pollution search data from platforms to infer consumer preferences. However, there are currently no multi-country studies using this approach that are considered suitable for reporting in this publication.
The role of environmental considerations in product purchases
The quality and price of a product are the two most important self-reported factors in European consumers’ purchasing decisions, by a large margin, with 64% of respondents to a 2023 survey saying that the quality of a product is “very important” for them and 55% saying the same about its price (Figure 5.10). By comparison, 23% of respondents consider a product’s impact on the environment to be “very important” when deciding what products to buy (73% if including those reporting “rather important”). The brand of the product is seen as less important, with 16% considering it to be “very important” or “rather important”.
As a percentage of Eurobarometer respondents
Note: Responses to the question, “How important are the following aspects when making a decision on what products (goods or services) to buy?”
Source: European Union (2023[12]), The EU Ecolabel, https://europa.eu/eurobarometer/surveys/detail/3072.
The environmental impact of a product is considered “very important” or “rather important” in purchasing decisions by over eight in ten respondents in Portugal (85%), Italy (84%) and Romania (84%), but by not much more than five in ten in Estonia (53%) and Latvia (54%) (Figure 5.1). Moreover, although between 41% and 55% of respondents in all EU Member States report that a product’s environmental impact is “rather important” in their purchasing decisions, those saying it is “very important” is much smaller in all Member States (ranging between 6% in Estonia and 37% in Romania).
As a percentage of Eurobarometer respondents
Note: Responses to the question, “How important are the following aspects when making a decision on what products (goods or services) to buy?”
Source: European Union (2023[12]), The EU Ecolabel, https://europa.eu/eurobarometer/surveys/detail/3072.
Enabling sustainable choices through information
A lack of clear, accurate and reliable information about the environmental impact of products may impede consumer demand for environmental innovations. Common “green” claims, such as “recycled”, “recyclable”, or “carbon neutral”, are inconsistently understood. Given the abundance of misleading or unsubstantiated green claims (OECD, 2025[10]), sustainability labels help consumers make informed choices by indicating whether a product meets specific environmental standards.
Sustainability labels aim to promote transparency, encourage sustainable production and consumption, and incentivise businesses to adopt responsible practices. Sustainability-related labels feature in most consumer product categories. For instance, energy labels are an important tool for helping consumers to better understand and choose more energy-efficient products. The EU Ecolabel is a scheme promoting goods and services that demonstrate environmental excellence, based on standardised processes and scientific evidence across a wide range of consumer goods.
While there is no comprehensive multi-country evidence documenting the awareness of a wider range of sustainability labels, a dedicated Eurobarometer survey finds that citizens’ awareness and trust in the EU Ecolabel are increasing. Almost four in ten EU citizens (38%) recognise the EU Ecolabel (Figure 5.12). The share of respondents who “often” buy products with the EU Ecolabel is the highest in Romania (20%), followed by Italy (14%). More than three in ten “sometimes” buy EU Ecolabel products in Romania (41%), Italy (37%), France (37%) and Belgium (35%).
Percentage of respondents who recognise having seen the Ecolabel before, by country
Note: Responses to question, “Please take a close look at the logo shown below. Have you seen this logo before?”
Source: European Union (2023[12]), The EU Ecolabel, https://europa.eu/eurobarometer/surveys/detail/3072.
There are country differences in terms the share of respondents “often” buying products with environmental labels. In some countries, around one in four respondents report doing so, e.g. in Italy (28%), Romania (26%) and Cyprus (23%). Fewer than one in ten (8%) report doing so in Belgium, Czechia, Estonia, Latvia and the Slovak Republic (Figure 5.13). The share of respondents saying they “sometimes” buy products with environmental labels is higher than 50% in Finland (57%), Croatia, Portugal and Sweden (all 55%), and Italy (51%). By comparison, 34% answer the same in Hungary.
Reported purchase frequency, as a percentage of respondents
Note: Based on the question, “How often do you buy products with environmental labels?”
Source: European Union (2023[12]), The EU Ecolabel, https://europa.eu/eurobarometer/surveys/detail/3072.
A recent Joint Research Centre report (Sanye Mengual et al., 2024[13]) provides a comprehensive overview of existing sustainability-related labelling in the EU food market (Box 5.3). One part of the study analysed the uptake of sustainability claims in new food product launches as tracked by Mintel, a private data provider, using the company’s product claims classification related to environmental and social sustainability (Figure 5.14). It indicates that the current share of new food products launched with a sustainability-related claim is 39% (50% if organic claims are included). More than one in three products carry a sustainability claim related to their environmental domain (36%), just over one in five carry an organic label (22%), and social-related claims are less frequent (13%). Domain-specific claims are more frequent in relation to the environment (19% of labels referring to the environment and, in addition, 11% to organic production) than in the social domain (just 2%). Analysis of the trends from 2011 indicates a constant increase in the uptake of sustainability claims among new product launches, with a slight plateau in more recent years. Further analysis of sustainability labelling was conducted by mapping the presence of sustainability-related logos among new food products launched in 2021, which represented 20% of all food product launches that year. When logos related solely to packaging, recycling, or charity were excluded, this share dropped to 12%.
Note: Data extracted from Mintel online analytics for 24 EU countries between Jan-Dec/year observation; share corresponds to the share of products classified with an ethical claim e.g. (environmental, social, animal welfare, charity, sustainable packaging), organic or GMO free in total products launched.
Source: Sanye Mengual et al. (2024[13]), Sustainability Labelling in the EU Food Sector: Current Status and Coverage of Sustainability Aspects, https://dx.doi.org/10.2760/90191.
Sustainability-related labelling refers to structured information displayed on product packaging or marketing materials that is based on a recognised set of standards, criteria, or certification schemes (e.g. EU organic logo, Fairtrade, Marine Stewardship Council). Labels are usually verifiable and tied to a governance or certification process. Sustainability-related claims refer to any statement, text, or image suggesting a product has environmental or social sustainability attributes, regardless of whether they are linked to a formal label or certification. Claims can be self-declared by producers and may not follow harmonised criteria (e.g. “eco-friendly,” “climate neutral,” “plastic-free”). Labels are generally regulated and standardised, while claims can be unverified marketing statements that do not necessarily meet specific, certified standards.
In Sanye Mengual et al. (2024[13]) sustainability-related claims were analysed using Mintel’s Global New Products Database (GNPD) classification of “ethical & environmental” product claims. This includes any text, symbol, or image on food packaging that Mintel associates with environmental or social benefits (e.g. “carbon neutral,” “supports farmers”). The analysis quantified their prevalence in new EU food product launches, distinguishing between environmental, social, organic, and multi-domain claims. Trends from 2011–2022 were examined to track growth in the share of products making such claims.
Sustainability-related labelling was analysed by first mapping logos visible on products with sustainability-related claims in the GNPD, then verifying each logo’s sustainability relevance through label-owner websites. Only logos linked to environmental and/or social aspects (excluding purely organic, origin, or dietary logos already regulated) were retained. These “sustainability-related labels” were characterised (type, scope, ownership, verification) and, for a subset, assessed in depth for coverage of sustainability aspects, life cycle stages, environmental impacts, and reliability.
Source: Sanye Mengual et al. (2024[13]) Sustainability Labelling in the EU Food Sector: Current Status and Coverage of Sustainability Aspects, https://dx.doi.org/10.2760/90191.
Measurement rationale
The adoption and use of novel technology is not only a driver of environmental improvements but also an important source of economic resilience and competitiveness. Environmental innovations have radically altered the landscape for possible transformation across the economy, especially in the transport and electricity sectors, where market-specific indicators of cost-reduction and adoption of low-carbon technologies provide a clear view of the market impact of environmental innovation. Relevant measures for other sectors or areas of application still need to be developed at the international level. It is also relevant to develop and consult indicators that provide measures of economic performance and exchange relating to the industries and economic activities specifically concerned with providing solutions for the effective use of natural resources and contributing towards environmental protection. By assessing their economic footprint through manufacturing capacity investment, employment and trade, and tracking their evolution over time, it is possible to gauge not only to what extent different economies are transforming and reorienting themselves, but also how effective they are in creating new economic opportunities.
Increasing the affordability and diffusion of low-carbon electricity
Electricity generated using key renewable energy technologies has become cheaper and is now largely on or beyond grid parity with electricity generated using fossil fuels (Figure 5.15). Levelised Cost of Electricity (LCOE) is a standard metric used to compare the cost of generating electricity from different technologies over their entire lifetime. The most dramatic price decline has been seen for solar PV generation, whose LCOE was 56% less than the average fossil fuel-fired alternatives in 2023, from 414% more expensive in 2010. The global weighted average LCOE of onshore wind went from being 23% higher than for fossil fuels in 2010, to an LCOE of new onshore wind projects of USD 0.033/kWh (US dollars per kilowatt-hour) in 2023 – 67% lower than the weighted average fossil fuel-fired cost. Over the same period, the global weighted average LCOE of offshore wind went from being 126% more expensive than the weighted average fossil fuel cost to being 25% less expensive (IRENA, 2024[14]).
Global weighted average levelised cost of energy, relative to the cost of fossil fuel-based energy
Source: IRENA Renewable Cost Database in IRENA (2024[14]), Renewable Power Generation Costs in 2023, https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023.
Apart from enabling a rapid expansion of utility-scale installations, the cost reductions allowed for the emergence of “prosumers”, i.e. consumers of electricity who also supply electricity generated with their assets to the grid and therefore actively contribute to a transition to an energy system less reliant on fossil fuels. For example, the number of PV prosumers in the Netherlands increased from fewer than 500 000 in 2015 to over 1 million in 2020, and the number of PV prosumers in Portugal increased from 3 000 to over 30 000 in 2019. In Poland, the number of prosumers grew from 51,000 in 2018 to 847,000 in 2021, with an installed capacity of almost 6 GW (EEA, 2022[15]).
Renewable power capacity increased 14% year-on-year in 2023, a new annual maximum. In 2023, solar PV and onshore wind together represented more than 95% of the 473 GW in added renewable energy capacity. Solar PV experienced an increase of 73% in 2023, adding 346 GW, while onshore wind added 104 GW, representing 48% year-on-year growth. Meanwhile, offshore wind capacity additions reached 11 GW, marking a 27% rise compared to 2022. This was, however, still below the maximum capacity additions for this technology in 2021. New additions were more modest for other technologies, such as CSP, geothermal, bioenergy and hydropower. Combined, these totalled 12 GW of additional installed capacity in 2023, of which 7 GW was hydropower.
Annual additions for CSP and geothermal have been flat in recent years, while hydropower and bioenergy experienced a decrease in 2023 compared to 2022 (IRENA, 2024[14]).
In terms of absolute new installed capacity added, China leads with over 60 GW of onshore wind and over 160 GW of solar PV added in 2024 (IEA, 2023[16]) (Figure 5.16). China represented the largest market for solar PV (63%), onshore wind (66%), offshore wind (65%) and hydropower (44%) in 2023 (IRENA, 2024[14]).
GW installed capacity
Source: IEA (2023[16]), Renewable Energy Market Update - June 2023, https://www.iea.org/reports/renewable-energy-market-update-june-2023.
Solar PV and onshore wind were the technologies with the highest share of new capacity deployed by most regions in 2023. Solar PV was the technology with the largest share of deployment for all regions except Africa that year. Onshore wind was the second-most deployed technology in six out of nine regions. Africa saw more diverse energy deployment, with the same share for onshore wind and hydropower, at 34%; while in the Middle East, onshore wind and CSP both had 6%; and in Central America and the Caribbean, hydropower was the second-most deployed technology at 5% (Figure 5.17).
Source: IRENA Renewable Cost Database in IRENA (2024[14]), Renewable Power Generation Costs in 2023, https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023.
While the steep cost reductions and scale-up of solar PV and onshore wind are remarkable, other renewable energy technologies are still at earlier stages of technology readiness, and their installed capacity is much more limited. This includes, for instance, offshore wind, where total global installed capacity only reached 72 GW in 2023, the installed capacity of onshore wind was more than ten times higher at 943 GW (Figure 5.18). Bioenergy technologies, including biogas, liquid biofuels, concentrated solar power (CSP), geothermal and marine renewables, were all at 20 GW of installed capacity or less in 2023.
Source: IRENA (2024[17]), Renewable Capacity Statistics 2024, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2024/Mar/IRENA_RE_Capacity_Statistics_2024.pdf.
Examining the relative contribution of renewables to the overall energy supply by country reveals a relatively widespread increasing trend between 2017 and 2021 (the last year on record in the OECD Green Growth Indicators database). Seven countries have a renewable energy share of 20% or more, and Iceland stands out with a 90% renewables rate, followed by Norway and Costa Rica at just under 50% (Figure 5.19).
As a percentage of total energy supply
Source: OECD (2025[18]), OECD Green Growth Indicators (database), https://stats.oecd.org/wbos/fileview2.aspx?IDFile=0eddc076-a4f9-4a2b-8e86-4190c8523b59.
Carbon intensity reductions in the energy sector are an important indicator of decoupling of electricity production from its carbon footprint. Austria, France, and Sweden have the lowest greenhouse gas (GHG) footprint among the surveyed countries. China is actively transitioning by investing heavily in renewable energy, particularly solar and wind power (Figure 5.20). While its energy GHG intensity remains high due to its continued reliance on coal, investments in green energy and a shift towards cleaner alternatives are driving significant reductions in China’s carbon footprint.
Carbon intensity measured in grammes of CO2 equivalents emitted per kWh of electricity generated
Source: Ember (2024[19]), Energy Institute - Statistical Review of World Energy (2024) – with major processing by Our World in Data, https://ourworldindata.org/grapher/carbon-intensity-electricity.
Increasing material efficiency in solar panels is crucial for improving the sustainability and cost-effectiveness of solar energy systems. One significant indicator in this regard tracks the reduced thickness of silicon wafers used in PV cells (Figure 5.21). Technological advances have enabled the development of thinner silicon wafers that maintain efficiency while using less material. Wafers were typically 400μm thick in 1990 and are now less than half that thickness, lowering the production costs by reducing the amount of raw silicon needed and minimising the energy and environmental impact of mining and refining the material. The trend toward thinner wafers has been accompanied by innovations in manufacturing methods, including new cutting techniques that minimise material loss and maintain performance under high-stress conditions. New coatings and manufacturing processes can enhance the durability and efficiency of thinner wafers.
Source: Fraunhofer ISE (2025[20]), Photovoltaics Report, https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/Photovoltaics-Report.pdf.
The transformation of mobility
The growing demand for electric vehicles (EVs), driven by their increasing affordability, has enticed automakers to develop high-performance batteries, expand charging networks, and improve energy efficiency, which has fed further preference shifts towards EVs and resulted in a rapid increase in the size of the EV market. Electric car sales in 2023 were 3.5 million higher than in 2022, a 35% year-on-year increase (figure 5.22). This is more than six times higher than in 2018, just five years earlier (IEA, 2025[21]).
Most EV sales are concentrated in a few countries: 95% of the nearly 14 million EVs sold in 2023 were sold in China and Europe (IEA, 2025[21]). As shown in Figure 5.23, the share of EVs in total cars sold has increased rapidly from under 1% in most countries in 2015 to double-digit shares in 2023 in over half of the surveyed countries.
Number of new vehicles sold
Note: BEVs are battery electric vehicles. PHEVs are plug-in hybrid electric vehicles. FCEVs are fuel cell electric vehicles. EVs = BEVs + PHEVs.
Source: IEA (2025[21]), Global EV Outlook 2025, https://www.iea.org/reports/global-ev-outlook-2025 and https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer
As a percentage of new cars sold
Source: IEA (2025[21]), Global EV Outlook 2025, https://www.iea.org/reports/global-ev-outlook-2025 and https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer
The role of batteries in shaping mobility transformation
Batteries are key to the transition from fossil fuels to renewables. They also accelerate the pace of energy efficiency improvements through electrification and greater use of renewable sources in power generation. Batteries play an important role in both the electric mobility sector and, increasingly, other energy sector applications (Figure 5.24). Lithium-ion batteries dominate both EV and storage applications, and chemistries can be adapted to mineral availability and price (Box 5.4), demonstrated by the market share for lithium iron phosphate (LFP) batteries rising to 40% of EV sales and 80% of new battery storage in 2023. Lithium-ion chemistries represent nearly all batteries in EVs and new storage applications today. For new EV sales, over half of the batteries use chemistries with relatively high nickel content, which gives them higher energy densities. LFP batteries account for the remaining EV market share. They are a lower-cost, less-dense lithium-ion chemistry that does not contain nickel or cobalt, with even lower flammability and a longer lifetime. While energy density is of utmost importance for EV batteries, it is less critical for battery storage, leading to a significant shift towards LFP batteries.
Source: IEA (2024[22]), Batteries and Secure Energy Transitions, IEA, Paris https://www.iea.org/reports/batteries-and-secure-energy-transitions
Driven mainly by low carbon energy applications, demand for critical minerals experienced strong growth in 2023. Lithium consumption rose by 30%, while demand for nickel, cobalt, graphite and rare earth elements all saw increases ranging from 8% to 15%. At around USD 325 billion, today’s aggregate market value of key energy transition minerals aligns broadly with that of iron ore. Demand for critical minerals is set to expand as the uptake of low carbon energy technologies continues to accelerate. If countries fully implement the national energy and climate pledges they have announced, mineral demand for clean energy technologies would more than double by 2030 and triple by 2040, reaching nearly 35 million tonnes (Mt) annually.
Recent developments in the battery industry are a compelling example of how innovation can reshape the demand for critical materials. Batteries are a high-stakes technology due to their widespread use in electronic devices and their pivotal role in the transition to electric transportation and renewable energy storage. The IEA projects a surge in demand for battery metals, driving a substantial increase in demand for lithium, graphite, cobalt and nickel. However, the production of these critical materials is highly geographically concentrated, introducing supply chain vulnerabilities (Figure 5.25).
As percentage of GDP
Source: IEA (2025[23]) Global Critical Minerals Outlook 2025, https://www.iea.org/reports/global-critical-minerals-outlook-2025
Figure 5.26 illustrates the recent evolution of the chemical composition of anodes and cathodes in eV batteries based on a recent IEA report. Over the past five years, this chemistry has evolved significantly, notably reducing reliance on some critical minerals, and this trend is expected to continue. On the cathode side, low-nickel, high-cobalt compositions – once widely used – have been progressively phased out in favour of alternatives with lower cobalt content, such as high nickel chemistries and, more recently, LFP batteries, which contain neither cobalt nor nickel.
Source: IEA (2025[23]) Global Critical Minerals Outlook 2025, https://www.iea.org/reports/global-critical-minerals-outlook-2025
Over the last decade, lithium-ion batteries have outclassed alternatives, thanks to 90% cost reductions since 2010, higher energy densities and longer lifetimes. Lithium-ion battery prices have declined from USD 1 400/kWh in 2010 to less than USD 140/kWh in 2023, one of the fastest cost declines of any energy technology ever, as a result of progress in R&D and economies of scale in manufacturing (Figure 5.27). They have also achieved much higher energy densities than lead-acid batteries, allowing them to be stacked in much lighter and more compact battery packs.
USD per kWh
Source: IEA (2024[24]), “Average electric vehicle battery price in the Net Zero Scenario, 2023 and 2030”, https://www.iea.org/data-and-statistics/charts/average-electric-vehicle-battery-price-in-the-net-zero-scenario-2023-and-2030.
China accounts for around 55% of battery volumes in use in EV fleets. However, its share is gradually declining as EV shares accelerate elsewhere, particularly in the European Union and the United States (Figure 5.28).
Capacity in use (GWh) (left scale) and EV market share in sales (right scale)
Source: IEA (2024[22]), Batteries and Secure Energy Transitions, IEA, Paris https://www.iea.org/reports/batteries-and-secure-energy-transitions
China also leads global battery production. This position is accompanied by significant domestic overcapacity. In 2023, excluding portable electronics, the country used less than 40% of its maximum cell production capacity, while its installed cathode and anode material manufacturing capacity was nearly four and nine times greater than global EV cell demand, respectively (Figure 5.29). To mitigate this surplus, China has become the largest exporter of EV cells, cathodes and anodes. However, this has driven down producers’ margins, posing financial risks for manufacturers that struggle to secure customers beyond the domestic market.
Note: Flows represent battery packs produced and sold as EVs, in GWh. Battery net trade is simulated, accounting for the battery needs of each region for each battery manufacturer, and assuming that domestic production is prioritised over imports. The eventual gap between domestic production and battery needs is filled through imports, which are assigned as a function of the unused manufacturing capacity of the other regions after satisfying their internal demand. This analysis does not consider battery production for stationary or portable electronics applications or stockpiling.
Sources: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024 based on data from Benchmark Mineral Intelligence and EV Volumes.
The steep cost reductions and corresponding adoption increases found for electricity and mobility are often hailed as the ultimate indicators of the sustainability transition gathering critical momentum. Many other key technologies vital in sectors such as industry, buildings, and agriculture have not registered similar gains, however (IEA, 2023[26]). The range of applicable technologies and practices is more diverse in many of these sectors, and robust indicators of progress that would allow for international comparisons are not readily available.
Production and employment in environmental goods and services
Measurement frameworks integrated in existing economic statistics provide another view of the economic footprint of environment-related technologies (Box 5.5). The characterisation of resource and environmental goods and service production and use requires grouping through clear resource management or environmental purpose of goods or services supplied by industries, as far as the statistical assessment of these activities and products allows for. A strong connection with innovation and technology adoption stems from the ambition to identify and measure goods, services and processes with “improved” environmental outcomes and features, but this remains a somewhat crude approximative exercise.
Environmental accounts are a multipurpose data system encompassing a conceptual framework and tables which describe the interrelations between the economy and the environment in a way that is consistent with the national accounts.
Environmental goods and services (EGSS) sector
EGSS accounts report information on the production of goods and services that have been specifically designed and produced for the purpose of environmental protection. The EGSS accounts cover characteristics such as output, exports of the produced products, related gross value added and employment. It is not possible to exclusively or exhaustively identify environmental goods and services. Many goods that can be used for environmental protection, for example, pumps, can also be used for quite different activities, and some goods that at first sight may seem unconnected with the environment may in certain applications be so used (OECD/Eurostat, 1999[27]). EGSS statistics are usually compiled with reference to curated lists of goods and services based on existing classifications, mapped as “environmental” through different types of consensus-setting exercises.
Environmental protection expenditure accounts (EPEA)
EPEA measure the economic resources devoted to all activities undertaken to preserve and protect the environment. It covers measures of: 1) expenditure on environmental protection products by resident units; 2) expenditure related to the production of environmental protection products, including the gross capital formation; and 3) transactions related to the financing of environmental protection expenditure. The scope of EPEA is in practice operationalised in terms of the Classification of Environmental Protection Activities (CEPA), which includes different categories by natural resource or amenity (e.g. air and climate; wastewater, waste; soil, groundwater and surface water; noise and vibration; biodiversity and landscapes; radiation) as well as environmental R&D. EPEAs make use of already existing information from the national accounts (production and generation of income accounts; capital formation [“investment”] by industry, supply and use tables; data based on the classification of functions of government), structural business statistics, business registers and other sources.
Estimates presented in this section are based on Eurostat. However, other countries have their own related systems and sources. For example, Canada’s survey of Environmental Goods and Services collects data on sales for a suite of products and services within the Canadian clean technology taxonomy.
Note: In addition to CEPA, there exists a classification of resource management activities (CReMA), which classifies activities, products, expenditures, and other transactions that aim to preserve and enhance the stock of natural resources. Resource management comprises a large variety of activities, including the production of energy from renewable sources, measures to improve energy efficiency, recovery of materials, and sustainable management of water and forest resources.
Source: Authors, based on OECD/Eurostat (1999[27]) and Eurostat (2017[28]).
Eurostat employment and growth statistics define the environmental economy through the European EGSS accounts. The environmental economy encompasses activities and products that serve one of two purposes: “environmental protection”, that is, preventing, reducing and eliminating pollution or any other degradation of the environment; or “resource management”, that is, preserving natural resources and safeguarding them against depletion. EGSS accounts provide information on production (output) and export of environmental goods and services, and the related employment and gross value added.
Eurostat estimates that employment in the EU environmental economy increased from 3.2 million full-time equivalents in 2000 to 5.2 million full-time equivalents in 2021. The EGSS sector generated EUR 937 billion (euros) in output and EUR 369 billion in gross value added in 2021. Between 2000 and 2021, employment and gross value added grew faster in the environmental economy than in the overall economy (Figure 5.30).
Index with base year 2000 = 100
Source: Eurostat (2025[29]), Environmental economy – Statistics on employment and growth, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Environmental_economy_%E2%80%93_statistics_on_employment_and_growth.
Figure 5.31 presents a breakdown of environmental employment growth into environmental protection activities and resource management activities. Employment related to the management of energy resources grew by a factor of 4.3 since 2000. Employment in waste management also increased, but by a factor of 2.4 less than two-thirds as much as the management of energy resources. The number of full-time jobs in the other three domains grew at a lower rate.
Employment in the renewable energy and energy efficiency domain increased from 0.6 million full-time equivalents in 2000 to 2.56 million full-time equivalents in 2022. The second-largest contribution to environmental employment in 2021 came from waste management, with the number of jobs increasing from 0.9 million full-time equivalents in 2000 to 2 million full-time equivalents in 2022 (overall increase of 143%). Whereas environmental protection accounted for more than three-quarters (77%) of employment in the environmental economy in 2000, the share decreased to 59 % in 2022 following the creation of jobs related to renewable energy and energy efficiency.
Thousands, full-time equivalents
Source: Eurostat (2025[29]), Environmental economy – Statistics on employment and growth, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Environmental_economy_%E2%80%93_statistics_on_employment_and_growth.
Measures of investment in environmental protection activities
Monitoring investment in climate change mitigation is essential for assessing the scale and effectiveness of economic responses to the climate crisis. While environmental accounts provide a comprehensive framework for tracking environmental and economic interactions, they currently fall short in capturing some critical policy areas, such as climate change mitigation. Box 5.6 highlights recent efforts to fill this gap by leveraging structural business surveys to estimate private sector investment in mitigation activities.
While the environmental accounts are a multipurpose data system defined in the System of Environmental-Economic Accounting 2012 - Central Framework (UN et al., 2014[30]), they do not yet measure some environmental policy themes, such as climate change mitigation. Eurostat, in co-operation with EU Member States, has been co-ordinating data collection and reporting on climate change mitigation investments.
The climate change mitigation sector is a subsector of the whole economy. Economic goods and services of the climate change mitigation sector are those that substantially reduce greenhouse gas emissions by source or from the atmosphere. It reflects the internationally accepted definition, per the United Nations Framework Convention on Climate Change (based on the Intergovernmental Panel on Climate Change).
Limitations
The estimation method makes assumptions about the share related to climate change mitigation applicable to each economic activity. Data from structural business surveys (SBS) cover the business or market economy in Europe, which includes manufacturing, utilities, construction and services, while other economic sectors and public administration are outside the scope. Investment by the general government and from households is not included. The investments are defined using the SBS approach on “investment in tangible goods”, which is more restrictive than the broader concept of gross fixed capital formation, reflecting investments in tangible and intangible goods. This has important implications for the study of the role of innovation, since the focus on tangible goods will understate the contribution of industries and firms that specialise in the generation and application of knowledge.
Source: Authors, based on Eurostat (2024[31]), Investments in climate change mitigation by NACE Rev. 2 activity (env_ac_ccminv), https://ec.europa.eu/eurostat/cache/metadata/en/env_ac_ccminv_esms.htm.
According to Eurostat’s estimates, private investment in climate change mitigation in the European Union saw an overall increasing trend since 2005, reaching EUR 95.3 billion in 2023 (in current prices), the equivalent of 0.55% of the European Union’s gross domestic product (GDP). Price change-adjusted data available up to 2022 show an overall 42% increase. As a percentage of GDP, climate change mitigation investment remained stable at around 0.5% between 2005 and 2016. It subsequently increased, reaching a peak of over 0.6% in 2021, with investment sharply dropping to 0.55% of GDP (Figure 5.32). In 2023, Lithuania and Denmark reported the highest shares of investment in climate change mitigation, with 1.5% of GDP, followed by Latvia and Sweden with 1.2%. In all remaining countries, investment in climate change mitigation was below 1% of GDP in 2023 (Eurostat, 2024[32]).
As a percentage of GDP
Source: Eurostat (2024[32]), Investments in climate change mitigation by NACE Rev. 2 activity, https://doi.org/10.2908/ENV_AC_CCMINV.
Measures of trade in energy and environmental technology goods and services
Trade in low-carbon technologies (LCTs) is a critical enabler of the global net-zero transition. Open and efficient markets for climate-friendly goods can accelerate the diffusion of key technologies across borders, helping countries to decarbonise faster and at lower cost. However, assessing trade in LCTs requires a clear and agreed definition of what constitutes a low-carbon good - an issue that remains contested. Box 5.7 explores how different efforts have approached this challenge and presents the classification used to track global trade in LCTs in this report.
Determining which products to include in an analysis of low-carbon technology (LCT) is a non-trivial challenge. This was evidenced by the collapse of the World Trade Organization (WTO) Environmental Goods Agreement (EGA) negotiations in late 2016 when negotiators could not agree on competing product lists. Multiple lists coexist, such as those produced by the World Bank, the multilateral Asia-Pacific Economic Cooperation forum, and Howell et al. (2023[33]). Each list varies in scope but provides a representative and manageable sample of traded climate change mitigation technology products, backed by a degree of consensus on their environmental friendliness.
Data presented in this section on LCT trade comes from the International Monetary Fund’s (IMF’s) climate change dashboard. The dashboard defines LCT products as those that “produce less pollution than their traditional energy counterparts and will play a vital role in the transition to a low-carbon economy”. They include equipment like wind turbines, solar panels, biomass systems and carbon capture equipment. Aggregate LCT imports are constructed using the classification presented in Howell et al. (2023[33]). These comprise 124 5-digit Harmonised System (HS) codes (2017 vintage of the standardised numerical method of classifying traded goods), and data are extended to construct country-level series dating back to 1994. LCT goods comprise a subset of “environmental goods” (OECD/Eurostat, 1999[27]).
The IEA global trade figures are based on units (not mass) for eVs. For other selected technologies, measurement is either based on mass or value, reflects only the final exported unit, and does not separately account for the value of embedded materials and components.
Source: Authors, drawing on Pigato et al. (2020[34])(2020); Pienknagura (2024[35]); and IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
Data on international trade in LCT goods show that China is the current leading exporter in this area, followed by Germany, the United States and Japan (Figure 5.33).
As a percentage of global total exports
Source: Authors, based on IMF (2025[36]), Climate Change Dashboard, https://climatedata.imf.org/pages/mitigation#mi1 (accessed March 2025).
Figure 5.34 shows, as examples, the divergent trajectories of LCT trade since 1998 in three major economies: China, the United States and Japan. From being rather unspecialised in this area, China has become particularly specialised in LCT exports, while the opposite applies in the case of the United States. In China, LCTs are a growing part of its exports and have caught up with the level of its imports, which have been on the decline since 2005. There has been a comparable reversal in the relative importance of LCT in exports and imports for these two economies. Japan’s revealed comparative advantage for LCT exports remains particularly high. Its exports are increasingly accounted for by LCTs, while there has been no change for imports.
Note: Graphs on the left display a country’s trade in low-carbon technology products as a share of its total imports and exports. Graphs on the right report the degree of revealed comparative advantage when it comes to the export of low-carbon technology products. A value greater than one indicates a relative advantage in exports of low-carbon technology products, while a value of less than one indicates a relative disadvantage. Source: IMF (2025[36]), Climate Change Dashboard, https://climatedata.imf.org/pages/mitigation#mi1 (accessed March 2025).
IEA data confirm that global trade in clean technologies is increasing rapidly. Global exports of solar PV modules have increased more than tenfold since 2015; those of electric cars have increased nearly twentyfold (Figure 5.35). Exports for several clean technologies have increased more quickly than those of other more established sectors of the economy, like food, pharmaceuticals, textiles and clothing, from 2010 to 2023. The clean energy transition is changing the landscape of trade – economies rely less on fossil fuels, which are consumed, and more on manufactured technologies, which are added to installed capacity and operated for years at a time. This is changing the nature and structure of global supply chains.
Note: For electric cars (*), the index is based on units (not mass) and scaled in 2015 = 100. The trade value of the selected technologies reflects only the final exported unit and does not separately account for the value of the materials and components embedded in them.
Source: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
According to the IEA, by 2035, the value of China’s clean technology exports is expected to reach levels comparable to the combined projected oil export revenues of Saudi Arabia and the United Arab Emirates in 2024 (Figure 5.36). This highlights a significant shift in global trade dynamics, where clean energy technologies – such as batteries, solar panels, and eV components – become as economically significant as fossil fuels. As China strengthens its role as the world’s leading supplier of clean tech, countries dependent on energy imports, particularly in Europe, are seeing their trade expenditures transition from fossil fuels to renewable and low-carbon technologies.
Source: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
Investment in low carbon energy technology manufacturing assets
As previously noted, the production capacity for clean energy technologies has been expanding rapidly. Between 2021 and 2023, solar PV module production grew from just over 450 GW to 1.2 TW (terawatts); wind capacity rose from 125 GW to 180 GW; eV manufacturing increased from 10.5 million to 22.2 million units; battery capacity expanded from 1.1 TWh (terawatt-hour) to 2.5 TWh; and electrolyser capacity tripled to 25 GW. Future IEA projections indicate further growth, with solar manufacturing potentially reaching 1.6 TW, wind at 260 GW, batteries at 9.3 TWh, and electrolysers at 165 GW by 2030.
China remains the dominant producer of clean energy technologies and essential materials, such as steel, aluminium and ammonia (Figure 5.37). Based on current project announcements, manufacturing will continue to be highly concentrated in China, the European Union, and the United States through 2030. These economies are expected to account for over 80% of global production capacity for six key clean energy technologies: solar PV, wind, eVs, batteries, electrolysers, and heat pumps.
Note: RoW = Rest of World. “Electric cars” values are calculated based on 2023 production numbers, adjusted according to the utilisation rates of car assembly plants in the region.
Source: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
From 2021 to 2023, the global distribution of manufacturing remained largely unchanged, with production still significantly more concentrated than fossil fuel supply. China continues to dominate clean energy technology supply chains, and this trend is expected to persist despite new project announcements. If all planned expansions materialise, China, the European Union, and the United States will according to the IEA still account for roughly 80% of global capacity, though their individual shares may shift slightly. In battery manufacturing, China’s share could decline as the European Union and the United States expand their production. Meanwhile, China is expected to strengthen its position in wind manufacturing, while Europe is set to see the largest growth in heat pump production.
In 2023, global investment in manufacturing across five key clean technologies – solar PV, wind, EVs (including batteries), electrolysers, and heat pumps – rose by 50%, reaching USD 235 billion, up from USD 160 billion in 2022 (Figure 5.38). The majority of this investment was directed toward solar PV and battery production, which together made up 80% of the total. China dominated clean tech manufacturing investment, contributing nearly three-quarters of the global total. Meanwhile, the United States and the European Union combined accounted for about one-fifth of total spending. The remaining investments came primarily from India, Japan, Korea, and Southeast Asia, while Africa, Central America, and South America saw almost no investment in this sector.
Note: FID = final investment decision. Materials includes investment associated with global capacity additions for crude steel and iron for steel, and alumina and primary production for aluminium. Only investments in new capacity are included. Completed projects include all projects in operation at end 2023. FID or under construction is as of end June 2024.
Source: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
China’s production of clean energy technologies, as for most other manufactured goods, generally far exceeds domestic demand, with the surplus available for export markets. Around 40% of the country’s output of solar PV modules and about one-fifth of that of battery cells was available for exports in 2023; the share was about 12% for wind nacelles and 10% for EVs (Figure 5.39). By contrast, the European Union and the United States rely on imports to meet their full demand, especially in the case of solar PV and batteries, with some exceptions, such as wind nacelles and electrolysers. For materials, production in China is generally in line with or slightly in excess of domestic demand. The picture for the European Union and the United States for materials is similar to that for clean energy technologies, with production generally falling short of demand, with the exception of alumina in the European Union, for which production is in excess of regional demand.
Note: ICE cars = Internal combustion engine cars. Battery cells are for both electric vehicles and stationary storage. Steel includes crude steel as well as semi-finished and finished products.
Source: IEA (2024[25]), Energy Technology Perspectives 2024, https://www.iea.org/reports/energy-technology-perspectives-2024.
Green growth measures: Resource productivity and efficiency
This publication has shown how adopting new technologies and practices transforms the society and markets. However, do these changes ultimately contribute to sustainable growth? Do they decouple economic growth from GHG emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services? To answer these questions, it is necessary to connect the measures described in this publication with broader economic and environmental performance indicators, as suggested in the OECD Green Growth Indicators (Box 5.8). Sustainability requires the active involvement of all sectors, leading to more systemic approaches to environmental issues, such as the concepts of a green and circular economy. Improving resource productivity at the system level can enhance competitiveness while contributing to a more sustainable economy.
The OECD Green Growth Indicators are a set of metrics developed to measure and track progress toward environmentally sustainable economic growth. They aim to help policymakers assess whether economic growth is accompanied by improvements in environmental performance and efficient use of natural resources. The indicators are categorised into four main areas:
Environmental and resource productivity indicators measure how efficiently an economy uses natural resources, such as energy, materials, and carbon emissions, including in relation to GDP.
Indicators on the natural asset base assess the stock and quality of natural resources like forests, biodiversity and freshwater reserves.
Environmental quality-of-life indicators examine the impact of environmental conditions, such as air pollution and access to clean water, on human well-being.
Indicators of economic opportunities and policy responses focus on the role of green technologies, environmental taxes and employment trends in fostering a greener economy.
The Green Growth Indicators include a few measures specifically related to STI, which have been addressed in previous chapters. The current chapter showcases indicators that are relevant to STI less directly but that capture important innovation outcomes related to resource efficiency improvements at the aggregate level. These include:
Production-based CO2 productivity measures how efficiently an economy generates GDP relative to its energy-related CO2 emissions. It is calculated as GDP per unit of CO2 emissions from energy use, reflecting the carbon intensity of economic activities. The unit is typically expressed as GDP (in constant US dollars) per unit of CO2 emitted. In order to account for potential carbon leakage, i.e. the moving of CO2-emitting production activities to other countries, a new set of GHG footprint indicators reveals emissions embodied in domestic and international production networks and emissions associated with final demand patterns.
Energy productivity measures how efficiently an economy uses energy to generate economic output. It is calculated as GDP per unit of total energy supply (TES), where TES refers to the total amount of energy available for consumption in a country, including both domestic production and imports, minus exports. The unit for energy productivity is typically expressed as GDP (in constant US dollars) per kilogramme of oil equivalent (kgoe) or GDP per tonne of oil equivalent (toe).
Non-energy material productivity measures how efficiently an economy generates GDP relative to its consumption of non-energy materials like minerals, metals and biomass. It is calculated as GDP per unit of domestic material consumption (DMC), where DMC represents the total materials used domestically (domestic extraction + imports - exports), excluding fossil fuels. This is typically expressed in US dollars per kilogramme.
Collectively, the Green Growth Indicators are crucial for governments to balance economic growth with environmental sustainability considerations. They are important when considering impacts of innovation since they help assess the extent to which resource and environmental improvements may be found, e.g. at the levels of individual technologies or companies, add up to the country and global level, both in relative and absolute terms, and eventually help steer key environmental system indicators into safe and sustainable levels.
Source: OECD (2025[18]), OECD Green Growth Indicators (database), https://stats.oecd.org/wbos/fileview2.aspx?IDFile=0eddc076-a4f9-4a2b-8e86-4190c8523b59 and OECD (n.d.[37]), Greenhouse Gas Footprint Indicators, https://www.oecd.org/en/data/datasets/greenhouse-gas-footprint-indicators.html.
Production-based CO₂ productivity and demand-based CO₂ productivity differ in how they attribute carbon emissions in relation to economic activity. Production-based CO₂ productivity measures the amount of economic output (GDP) generated per unit of CO₂ emissions produced within a country’s borders, focusing on emissions from domestic industries, energy production and manufacturing, regardless of where the goods are consumed. In contrast, demand-based CO₂ productivity accounts for emissions based on consumption by including emissions embedded in imported goods and excluding those from exported goods. This approach reflects the carbon footprint of a country’s consumption patterns and highlights the impact of global supply chains. While production-based CO₂ productivity measures emissions where they are produced, demand-based CO₂ productivity attributes them to the final consumer, offering a more comprehensive view of a country’s true carbon footprint.
A higher value in production-based CO2 productivity indicates that an economy produces more economic output with lower carbon emissions, signalling improvements in energy efficiency, adoption of cleaner technologies, and a shift toward low-carbon energy sources. The top three countries with the highest CO₂ productivity in 2022 were Switzerland, Sweden and Ireland, all achieving values above USD 15 per unit of CO₂. Most countries improved over the decade, as indicated by higher values in 2022 compared to 2012. However, some countries remained at the lower end of the spectrum, indicating a higher carbon intensity relative to their economic output. The overall trend suggests that while many economies have become more carbon-efficient, significant disparities remain between countries (Figure 5.40).
USD per unit of CO2
Source: OECD (2025[18]), OECD Green Growth Indicators (database), https://stats.oecd.org/wbos/fileview2.aspx?IDFile=0eddc076-a4f9-4a2b-8e86-4190c8523b59.
The energy productivity indicator helps track the transition towards more energy-efficient growth. Ireland leads with the highest energy productivity, exceeding USD 45 000 per tonne of oil equivalent in 2022, followed by Switzerland and Luxembourg. These countries demonstrate a strong decoupling of economic growth from energy consumption, likely due to energy-efficient industries and a shift towards service-based economies. In contrast, the countries on the lower end of the spectrum, such as Iceland and Canada, have energy productivity values near or below USD 5 000 per tonne of oil equivalent, reflecting higher energy use relative to economic output, often due to energy-intensive industries and colder climates. Most countries have improved their energy productivity since 2012 (Figure 5.41). However, the extent of progress varies, influenced by factors such as energy sources, industrial structures and efficiency policies.
USD per tonne of oil equivalent, 2015
Source: OECD (2025[18]), OECD Green Growth Indicators (database), https://stats.oecd.org/wbos/fileview2.aspx?IDFile=0eddc076-a4f9-4a2b-8e86-4190c8523b59.
GDP per unit of domestic material consumption (DMC), in USD per kilogramme
Source: OECD (2025[18]), OECD Green Growth Indicators (database), https://stats.oecd.org/wbos/fileview2.aspx?IDFile=0eddc076-a4f9-4a2b-8e86-4190c8523b59.
A higher value of non-energy material productivity indicates that more economic output is generated with less material input. This reflects improvements in resource efficiency and sustainable production, as well as broader shifts in industrial structure such as transition towards more service-focused economies. The Netherlands leads with over USD 12/kg in 2022, showing an increase from USD 10 in 2012. Switzerland follows at USD 9.18/kg, also rising from USD 7.15 in the previous decade. Italy ranks third at USD 7.83/kg, slightly higher than its 2012 value of USD6.35/kg. Most countries show an upward trend, indicating increasing decoupling in generating economic value from the consumption of material resources (Figure 5.42). However, variations exist across countries, with some seeing stagnation or slight declines, reflecting differences in economic structures, resource efficiency policies and industrial compositions.
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