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PPPs for policy making: a visual guide to using data from the ICP - Chapter 8: Energy and climate

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Emissions and climate change

The extreme socioeconomic consequences of climate change have brought fossil fuel emissions and mitigation and adaptation efforts to the fore in both national and international policy making. Emissions are correlated with the volume of activity and production of a country and PPP-based GDP growth is identified as a major driver of increasing emissions. The indicator CO2 emissions per unit of value added is used to measure progress towards Sustainable Development Goal (SDG) target 9.4, which looks to upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes. When calculated at the level of the whole economy, PPP-based GDP is used as the denominator and the measure reflects the effects of the average carbon intensity of the energy mix, the structure of an economy, and the average efficiency in the use of energy. Measuring GDP in constant 2017 PPP terms allows an examination of the change in emission intensity over time. Figure 8.2 shows changes by income group since 2001.

The World Bank quantifies the impact of natural hazards and disasters on the most vulnerable in PPP terms. It does so by first assessing the risk to assets as the average monetary value of the damages that disasters inflict on assets (often measured as replacement or repair value). Second, it also assesses the potential loss to well-being, which is expressed as the loss in national consumption. These data enable policy makers to monitor the social resilience of a country – that is, its ability to minimize the impact of asset losses on well-being. They can also use the data to set intervention priorities such as expanding financial inclusion, disaster risk and health insurance, social protection and adaptive safety nets, contingent finance and reserve funds, and universal access to early warning systems. Figure 8.3 shows the estimated losses avoided by reducing by 5 percent the share of the population exposed to natural hazards by targeting the poorest 20 percent of people in each country.