Measuring the Green Economy: exploring new definitions and testing new methods

As the world confronts the challenges of multiple environmental crises – particularly the climate emergency – it is important for policymakers to be able to track the scale of economic activity related to the achievement of environmental goals. We highlight the shortcomings of existing definitions and typologies for measuring the ‘environmental goods and service sector’ and related environmental activities. We first set out a new approach to defining green economic activity, which aims to overcome some of the shortcomings of existing approaches. We then explore the potential of new web-scraping tools for supporting the estimation of green economic activity in the UK. We test the alignment between lists of firms identified as involved in low-carbon and renewable energy by an existing ONS survey and by a web-scraping tool (TheDataCity). Our analysis highlights both the limitations and the advantages of web-scraping tools and advocates their use only when coupled with sufficient relevant sector-specific expertise. We also provide illustrative estimates of the scale of green economic activity in the UK, adjusted for our new set of definitions, showing that the true scale of such activities may be at least 70% greater than is captured in the current ONS Environmental Goods and Services Sector estimates.