The methodology for tracking the total amount of approved funding to promote the development, transfer, dissemination, and diffusion of environmentally sound technologies has a two-pronged approach:

Level 1. Use globally available data to create a proxy of funding flowing to countries for environmentally sound technologies, or of trade in environmentally sound technologies:

Total trade of tracked Environmentally Sound Technologies (ESTs) that provides the closest indicator of investment flows is that of trade (e.g. traded goods and services that have been internationally agreed to have a positive environmental benefit), using HS codes of the Harmonized Commodity Description and Coding Systems, preferably more than 6-digit level.

Total trade of tracked Environmentally Sound Technologies (ESTs) is calculated as the sum of tracked exported, imported, re-exported and re-imported ESTs.

The sectors deemed to be ESTs through historical research include:

Air pollution control,
Wastewater management,
Solid and Hazardous waste management,
Renewable Energy,
Environmentally Preferable Products,
Water Supply & Sanitation,
Energy Storage & Distribution,
Land & Water Protection & Remediation.

Level 2. Collect national data on environmental goods and services sector (EGSS):

ESTs can be considered as the environmental goods and services sector (EGSS), described in the System of Environmental-Economic Accounting - Central Framework (SEEA CF). The EGSS consists of producers of all environmental goods and services. Thus, all products that are produced, designed, and manufactured for purposes of environmental protection and resource management are within scope of the EGSS. This aligns with the intent of the EGSS to provide information on the extent to which the economy may become more environmentally friendly and resource efficient. The types of environmental goods and services in scope of the EGSS are environmental specific services, environmental sole-purpose products, adapted goods and environmental technologies.

Environmental specific services are environmental protection and resource management specific services produced by economic units for sale or own use. Examples of environmental specific services are waste and wastewater management and treatment services, and energy and water-saving activities. Environmental specific services are those services that have the main purpose of:

(a) Preventing or minimizing pollution, degradation or natural resources depletion (including the production of energy from renewable sources);

(b) Treating and managing pollution, degradation and natural resource depletion;

(c) Repairing damage to air, soil, water, biodiversity and landscapes;

(d) Carrying out other activities such as measurement and monitoring, control, research and development, education, training, information, and communication related to environmental protection or resource management.

Environmental sole-purpose products are goods (durable or non-durable) or services whose use directly serves an environmental protection or resource management purpose and that have no use except for environmental protection or resource management. Examples of these products include catalytic converters, septic tanks (including maintenance services), and the installation of renewable energy production technologies (e.g., solar panels).

Adapted goods are goods that have been specifically modified to be more “environmentally friendly” or “cleaner” and whose use is therefore beneficial for environmental protection or resource management. For the purposes of the EGSS, adapted goods are either:

(a) “Cleaner” goods, which help to prevent pollution or environmental degradation because they are less polluting at the time of their consumption and/or scrapping, compared with equivalent “normal” goods. Equivalent normal goods are goods that provide similar utility except for the impact on the environment. Examples include mercury-free batteries and cars or buses with lower air emissions;

(b) “Resource-efficient” goods, which help to prevent natural resource depletion because they contain fewer natural resources in the production stage (e.g., recycled paper and renewable energy, heat from heat pumps and solar panels); and/or in the use stage (e.g., resource efficient appliances and water-saving devices such as tap filters).

Adapted goods differ from environmental specific services and sole-purpose products because, while they serve an environmental protection or resource management purpose (through being cleaner or more resource-efficient), these are not the primary reasons for their production (e.g., the primary purpose for manufacturing buses with lower air emissions is transportation).

Environmental technologies are technical processes, installations and equipment (goods), and methods or knowledge (services), whose technical nature or purpose is environmental protection or resource management. Environmental technologies can be classified as either:

(a) End-of-pipe (pollution treatment) technologies, which are mainly technical installations and equipment produced for measurement, control, treatment and restoration/correction of pollution, environmental degradation, and/or resource depletion. Examples include plants within which to treat sewage, equipment for measuring air pollution, and facilities for the containment of high-level radioactive waste;

(b) Integrated (pollution prevention) technologies, which are technical processes, methods or knowledge used in production processes that are less polluting and less resource-intensive than the equivalent “normal” technology used by other producers. Their use is less environmentally harmful than that of relevant alternatives.

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