A famous physicist once said: “When you can measure what you are speaking about, and express it in numbers, you know something about it”.
Nearly 140 years later, this maxim remains true and is particularly poignant for policymakers tasked with addressing climate mitigation and adaptation.
That’s because they face major information gaps that impede their ability to understand the impact of policies—from measures to incentivize cuts in emissions, to regulations that reduce physical risks and boost resilience to climate shocks. And without comprehensive and internationally comparable data to monitor progress, it’s impossible to know what works, and where course corrections are needed.
This underscores the importance of the support of G20 leaders for a new Data Gaps Initiative to make official statistics more detailed, and timely. It calls for better data to understand climate change, together with indicators that cover income and wealth, financial innovation and inclusion, access to private and administrative data, and data sharing. In short, official statistics need to be broader, more detailed, and timely.
The sector where change is needed the most is energy, the largest contributor to greenhouse gas emissions, accounting for around three-quarters of the total.
Economies must expand their renewable energy sources and curb fossil fuel use, but while there’s been a gradual shift in that direction, the pace is still not sufficient. And not only is there a lack of policy ambition in many cases, there also is a lack of comprehensive and internationally comparable data to monitor progress.
To accelerate cuts to emissions, policymakers need detailed statistics to monitor the path of the energy transition and assist them in devising effective mitigation measures that can deliver the fastest and least disruptive pathway toward net zero emissions.
At the same time, countries also need to monitor how mitigation and adaptation measures affect household incomes, consumption, and wealth. How, for example, will rising fossil fuel costs impact vulnerable households? And how should we prioritize investments to address new weather patterns and more frequent climate shocks?
Robust data are vital—because policies must be based on a clear understanding of the broad impacts of climate change, the green transition, and the associated physical, economic, and financial risks.
Encouragingly, the new Data Gaps Initiative argues for G20 economies to go beyond gross domestic product in their national statistics, by capturing a suite of climate indicators and distributional estimates of household income and wealth. This will help policymakers better weigh the distributional implications of policies.
In welcoming the new data gaps initiative, G20 Leaders asked the IMF to coordinate with the Financial Stability Board, the Inter-agency Group on Economic and Financial Statistics, and statistical authorities across the G20 to “begin work on filling these data gaps and report back on progress in the second half of 2023, noting that the targets are ambitious and delivery will need to take into account national statistical capacities, priorities, and country circumstances as well as avoiding overlap and duplication at the international level.”
The initiative will draw on the collective expertise of the international agencies that are coordinating the work as well as on work undertaken by groups such as the Network for Greening the Financial System to develop a common understanding of climate-related financial instruments.
This work is also closely linked to other IMF initiatives such as the IMF’s Climate Indicators Dashboard, which is another statistical initiative to help supply relevant climate-related data for economic analysis. It is also linked to the IMF joint project to provide implementation guidance on G20 high-level principles for taxonomies and other sustainable-finance alignment approaches.
G20 policymakers have recognized that better data is needed to inform the more complex challenges they face. The data gaps initiative will play a key role in addressing this.
— The latest announcements and data releases from the initiative are available here.