Originally published on by Brookings Institute. Link to original report( < 1 min)
August 11, 2021
Global Economy and Development
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Africa in the news: Energy and climate finance updates, Mozambique’s debt write-off, and US COVID-19 vaccine donation
( 4 mins) Africa proposes expanding and tracking climate finance; Egypt and Greece plan to link electrical grids; South Africa seeks low-cost financing for clean energy
Frustrated with a lack of climate-related funding from wealthy nations, Africa’s lead climate negotiator proposed this week to build a new system to track climate finance contributions by country. Indeed, funding has fallen short of the 2006 agreement to raise $100 billion per year for climate change-related financing by 2020. From the existing pool, African countries only received 26 percent of the funding in 2016-2019, compared to 43 percent on average by Asian countries. African countries are now pushing to scale up funding tenfold by 2030 for global climate change mitigation and adaptation finance, calling the $100 billion package a political commitment and “not based on the real needs of developing countries to tackle climate change.”
Following the signing of an agreement on October 14, 2021 between Egypt and Greece to construct undersea interconnectors, transmission cables used to link electrical grids between countries, the Greek Prime Minister Kyriakos Mitsotakis pledged on Tuesday to connect Egypt with the European Union’s electricity market via an undersea cable network running beneath the Mediterranean Sea. Although formal details of the project have not been released, Prime Minister Mitsotakis is confident that connecting Egypt’s energy grid to Greece, and ultimately Europe, will promote energy security during times of global turbulence in the energy market and energy diversification.
In related energy news, South Africa continues its search for low-cost financing to develop its clean energy infrastructure and decommission coal-burning power plants. The world’s 12th largest carbon emitter seeks 400 billion rand ($27.6 billion) of electricity infrastructure for its energy transition, earmarking 180 billion rand for cleaner energy technology and 120 billion rand for transmission gear. The rest of the funding will go toward transformers, substations, and electrical distribution technology. With more than 80 percent of South Africa’s electricity generated by burning coal, the state energy company, Eskom, plans to decommission between 8,000 to 12,000 megawatts of coal-derived electricity over the next decade and replace this electrical capacity with other energy sources such as wind, photovoltaic, and natural gas.
Credit Suisse to write off $200 in Mozambican debt after defrauding prosecutors
Regulators announced on Tuesday, October 19, that Credit Suisse will forgive $200 million worth of Mozambican debt as part of a settlement with UK, Swiss, and U.S. authorities due to corruption issues. The regulators alleged that Credit Suisse employees received and paid bribes while they arranged industry loans totaling $1.3 billion. According to U.S. prosecutors, three Credit Suisse bankers, two middlemen, and three Mozambican government officials diverted at least $200 million of the loans for their private use. The debt write-off is part of a settlement agreement with regulators that includes a $175 million fine to the U.S. Justice Department, a $99 million fine to the U.S. Securities and Exchange Commission (SEC), and a $200 million fine to Britain’s Financial Conduct Authority. The SEC indicated on Tuesday that the Credit Suisse staff and their intermediaries have been indicted by the U.S, Department of Justice.
On Thursday, October 21, the Budget Monitoring Forum (FMO), an independent public finance organization based in Mozambique, called Credit Suisse’s offer insufficient and instead demanded the “full cancellation of illegal debts.” As of Friday, October 21, Mozambican officials have yet to comment publicly on the debt forgiveness.
US announces COVID-19 vaccine donations for Africa as South Africa rejects Sputnik V
On October 14, U.S. President Biden met with President Kenyatta of Kenya where Biden promised an additional donation of 17 million doses of the Johnson and Johnson (J&J) vaccine to the African Union . Indeed, this announcement is timely as the World Health Organization (WHO) announced in September that in order to fully vaccinate 70 percent of the continent by September 2022, COVID-19 vaccine shipments must increase from 20 million per month to 150 million.
In other related news, South Africa’s drug regulator has rejected the Russian Sputnik V vaccine due to safety concerns. According to the Associated Press, regulators asked the makers of Sputnik V for data proving the vaccine’s safety but their request was not suitably addressed. Sputnik V is currently being reviewed for authorization by WHO and the European Medicines Agency. Both AstraZeneca and J&J have been approved in South Africa.
( 2 mins) Development finance is critical to global development, including for the achievement of the sustainable development goals, low-income countries’ recovery from the pandemic, and the $100 billion commitment for climate finance. But to know whether finance and development goals are being met—and to keep institutions on track—we need better information on financial flows and how they impact development. Despite the scale of financing by development finance institutions (DFIs), few share detailed information on their private sector portfolios. This makes it difficult to assess their development impact and to foster learning within this space. Greater transparency will lay the foundation for more informed decisionmaking, more accountability, and better allocation of resources.
On November 3, the Center for Sustainable Development at Brookings will host a virtual event to create space for DFIs, civil society organizations, and the private sector to engage with key issues on DFI transparency. As part of the event, Publish What You Fund will launch the report “Advancing DFI Transparency – The rationale and roadmap for better impact, accountability, and markets.” A panel will discuss recommendations for greater global disclosure and how donors can better engage with national stakeholders and improve the publication of their development financing. The event will introduce a new DFI Transparency Tool.
Questions for the panelists may be submitted with registration. During the live event, the audience may submit questions by emailing [email protected] or by using the Twitter hashtag #DFItransparency.
( 6 mins) More than 4 million people have died from COVID-19, and many others face long-lasting effects on their lives and livelihoods. While the full social, economic, and financial implications of COVID-19 are yet to be seen, millions have lost their jobs, and incomes in many countries have sharply declined. This raises concerns about sovereign debt sustainability and financial vulnerability in the medium term, particularly in developing countries and emerging markets.
The pandemic diverted the attention from another ongoing crisis: Climate change has affected the lives of more than 130 million people and resulted in over 15,000 deaths since the beginning of the COVID-19 crisis. Natural hazards such as tropical cyclones, floods, and wildfires are expected to become more frequent and intense in the coming years.
Understanding the economic and financial impacts of compound risks
With worsening climate change, compound risks (e.g., floods and droughts or pandemics and hurricanes hitting the same country shortly thereafter) could be more likely in the future. This should be the main concern for governments and financial supervisors because compound risks could exacerbate social and financial vulnerabilities. For instance, natural hazards destroying socioeconomic infrastructures, such as hospitals, provide a fertile ground for pandemics to spread, thus strengthening the pandemic’s socioeconomic toll and delaying recovery. In countries with limited fiscal space and capacity to respond, compound risk can lead to substantial fiscal impacts and slowed recovery.
The assessment and management of compound risks require a better understanding of how shocks of different nature (e.g., pandemics, climate change) are entering and passing through the economy. Eventually, we need to identify which assets and sectors are most vulnerable yet relevant in shocks’ transmission and amplification, in the economy and finance. This information would support policymakers and financial supervisors, answering the following questions “What are direct and indirect impacts of compound COVID-19 and climate physical risks, and how do they affect socio-economic and financial stability?” “Under which conditions can effective recovery policies be implemented?” “To what extent can countries strengthen their financial resilience to compound risks?”
Fit for purpose tools to assess compound risk
Answering these questions calls for macroeconomic models where heterogeneous agents—such as banks, firms, households, government, and a central bank—interact and adapt their investment and financing behavior, based on available information and on their expectations about the future. Consistently with the real world we live in, agents differ with regard to access to information (for instance, asset managers may have better information about financial market reaction to COVID-19 than car dealers) and risk management tools. Agents endowed with different access to information, preferences, and expectations, may diverge in their risk assessment and management strategies, with implications for the shock recovery.
Compound risk can amplify losses
A recent paper applies such a macroeconomic model to Mexico and shows that when shocks compound, such as the case of COVID-19 and natural disasters, losses could get amplified. Economic impacts are shock dependent, as a hurricane that might affect the supply side first by destroying productive plants and infrastructure differs from COVID-19 that enters as an aggregate demand shock by curbing people’s ability and willingness to spend money. The interplay between supply and demand shocks in the case of compound risk matters for the shock transmission through the economy and thus overall economic, private, and public finance impacts. This amplified impact is captured by the compound risk indicator in Figure 1, which compares GDP impacts of compound risks versus the sum of individually occurring pandemic and climate risk. A value of the indicator higher than 100 signals that the impact of the compound shocks is higher than the impact of the sum of individual shocks. In the case of a compounding strong climate physical shocks with COVID-19, non-linear amplification effects emerge.
Figure 1. Compound risk indicator for Mexico
Source: Dunz et al. 2021.
Drivers of shocks mitigation and amplification
Diverging preferences, expectations, and risk assessment are a main driver of compound shock amplification. Timely governments’ fiscal response is crucial to support the economic recovery and influence economic expectations. However, procyclical banks’ lending can counteract the effectiveness of fiscal stimulus by limiting firms’ recovery investments, creating the conditions for public finance distress (e.g., public debt sustainability). For instance, banks may revise their lending conditions to firms due to the uncertainty about the duration of the crisis, despite government and central banks’ actions (e.g., credit guarantees, recovery investments). By limiting the ability of firms to invest and of households to consume, procyclical lending can trigger persistent and nonlinear macroeconomic effects, such as higher unemployment and lower GDP (Figure 1).
Banks’ lending behavior is thus relevant for the success of government fiscal policies, and for their financial sustainability. Indeed, government’s recovery funds, financed by issuance of debt, are less effective in fostering the economic recovery in presence of credit and labor constraints. Coordination of fiscal and financial policies could help to tackle the complexity of the implications of compound risk, creating the conditions for functioning credit markets, and preserving sovereign debt sustainability.
Insights to build back better
Introducing compound risk considerations in fiscal and financial risk management can help governments and financial authorities build resilience to compounding shocks that could be more likely in the near future. Nevertheless, the assessment of compound risks requires an adaptation of the analytical tools that support policy making. Accounting for adaptive expectations and finance-economy interactions (e.g., bank lending conditions) that affect economic and financial agents’ response (e.g., investment, consumption) in times of crises could improve our understanding of how and why individual and compounding shock impacts might amplify. Such a new generation of macroeconomic models can thus support investors and policy makers in the assessment of risk and in the design of better-informed risk financing strategies. This, in turn, would enable the role of public and private finance in building resilience to compounding climate, pandemic, and other risks, for the benefit of the environment, the economy, and society.
( 6 mins) Background
The COVID-19 pandemic has, thus far, spared Africa from the high number of cases and deaths seen in other regions in the world (Figure 1). As of April 2021, sub-Saharan Africa accounted for just 3 percent of the world’s cases and 4 percent of its deaths. Some experts attribute the relatively low case counts in sub-Saharan Africa to the region’s extremely young population or, importantly, the swift and preemptive lockdowns that many countries implemented in March 2020. While these lockdowns have likely saved lives, they have also left significant scars on the fiscal position of sub-Saharan Africa and the market conditions it faces. Dwindling revenues following the fall in global trade met a wave of unemployment among a population that lacks widespread access to safety nets and health infrastructure.
Figure 1. Population, COVID cases, and COVID deaths, sub-Saharan Africa vs. world
Source: Our World in Data, 2021. Data taken on September 1, 2021.
In response, African governments have, by and large, borrowed to finance stimulus packages to support at-risk groups, struggling businesses, creative education solutions, and health-related infrastructure. International and regional financial institutions, such as the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB), and European Union (EU) countries (both bilaterally and multilaterally) have responded through debt relief measures and restructurings. The fiscal and monetary responses of sub-Saharan Africa and various financial institutions will have important consequences for indebtedness, debt servicing capacity, and debt sustainability more broadly.
Debt was an increasing problem across all income groups of African countries prior to COVID-19, and the pandemic has only exacerbated the problem. In fact, African countries had been borrowing heavily in the global financial markets in recent years—a trend that has created both new opportunities and new challenges. Rising debt levels have corresponded with rising debt service cost, but countries have not necessarily improved their ability to finance such obligations. Indeed, failure to meet debt service obligations will have devastating impacts, including downgrading of credit ratings (and, hence, future higher costs), heightened pressure on foreign exchange reserves and domestic currency depreciation, and the real possibility of being rationed out of the market—and negative reputational consequences.
This paper utilizes new data to study the impact of the COVID-19 pandemic on debt sustainability and vulnerability in sub-Saharan Africa and sheds light on the channels through which these impacts have taken place. We find that debt levels have risen substantially in sub-Saharan Africa since the onset of the COVID-19 pandemic. We utilize IMF projections as a comparison to analyze the impacts on the pandemic on debt levels and how they covary with key determinants of growth and fiscal space.
In particular, sub-Saharan Africa experienced a 4.5 percent increase in “pandemic debt”—the debt taken on above and beyond projections due to the COVID-19 crisis. HIPC countries in particular saw large increases in pandemic debt, with levels 8.5 percent higher than projected. Non-HIPC countries took on mostly planned debt and borrowed from both private and official (that is, bilateral or multilateral) credit markets alike. HIPC countries, on the other hand, were largely shut out of private credit markets and instead relied on official credit to fund increases in (largely unplanned) debt. We also find that the domestic bond market played a more important role in private borrowing than it has in recent years and that eurobond issuance was relatively scarce. Countries that rely on metal exports issued less pandemic debt than did those that rely on oil, thanks to the strong growth and relative stability of metal prices during the pandemic.
Despite taking on substantial pandemic debt, HIPC countries experienced less extreme drops in GDP compared to their non-HIPC counterparts, underscoring the need for HIPC countries to accelerate financial sector development and enhance public-sector financial management, including mitigating financial leakages, curbing illicit follows, and galvanizing domestic resource mobilization. Looking forward, this paper argues that both sub-Saharan Africa’s recovery and debt sustainability depend on two factors: the success of the African Continental Free Trade Agreement (AfCFTA) and obtaining the participation of private partners in debt restructuring. Economic recovery, in this regard, will affect the millions of informal workers that have lost their jobs at the hands of the pandemic as well as revenue levels that coincide to some degree with the workers’ eventual participation in the formal economy.
Debt levels in 2020 were 4.5 percent higher in sub-Saharan Africa than projections. The increase was particularly acute in HIPC countries, whose debt had mirrored non-HIPC countries the decade prior.
Non-HIPC countries and especially upper-middle-income countries retained access to credit markets and used a mixture of private and official creditors to finance increases in debt (which were largely in line with projections).
HIPC countries were largely shut out of private debt markets and instead relied on unplanned borrowing from official creditors.
Domestic bond markets played a relatively more important role in private borrowing. Eurobond issuance dropped sharply.
Some resource-rich countries saw sharp increases in bond yields despite having comparatively low yields pre-pandemic.
Metal prices showed more stability and higher growth than oil prices during the pandemic. Consequently, top metal exporters took on less debt than top oil-exporting countries.
Many sectors, especially manufacturing, witnessed “formalization” of employment during the pandemic.
Obtain full participation of all creditors, including private ones, in debt restructuring
Accelerate financial sector development
Enhance public financial management and internal resource mobilization
Mitigate financial leakages and illicit flows
Harness and accelerate opportunities afforded by AfCFTA
Design incentive-compatible and state-contingent contracts
Revisit existing institutional mechanisms for debt resolution
This paper is organized as follows. Section 2 begins by taking brief stock of the region’s debt landscape prior to the advent of COVID-19, before illustrating how the debt burden has changed during the pandemic. It also reviews key reasons why indebtedness has risen, including stimulus packages, current account deficits, and borrowing costs. Section 3 examines key economic channels along which the pandemic shock unfolded. Section 4 considers the magnitude of revenue loss and the vulnerability of the informal workers during the pandemic. Section 5 discusses attempts to rectify the unexpected, unsustainable increases in debt (or “pandemic debt”) and explores important considerations of which effective policies must take account. Section 6 recommends a number of policies and the way forward.
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( 6 mins) In August 2020, as a response to the pernicious impact of the COVID-19 pandemic on the global economy and on the finances of member states, the International Monetary Fund (IMF) decided to issue $650 billion of special drawing rights (SDRs). Conceptually, SDRs are a form of unconditional financing for addressing urgent liquidity challenges.
SDRs were created in the late 1960s as a precautionary mechanism to address potential sovereign liquidity shortfalls in the context of the rigid monetary order of fixed exchange rates of the Bretton Woods system. SDRs were designed to serve as a low-cost reserve asset that could be sold by a government via the IMF acting as intermediary to another government and thereby converted into currency using an exchange rate pegged to a basket representing five of the world’s leading currencies. Currently, these five currencies are the U.S. dollar, the Chinese renminbi, the euro, the Japanese yen, and the British pound sterling. SDRs are not technically the IMF’s currency but a claim on reserves. To that effect, SDRs are not money per se but rather a means to establish a line of credit with a sovereign lender (government) acting as buyer of SDRs. Besides paying a low rate of interest on SDR use, countries benefit from the absence of refinancing risks imposed by conventional maturities. For foreign currency-strapped economies, many emerging markets, and lower-income economies in Africa, SDRs can, therefore, provide the immediate means to pay for vaccines and/or other health care investments.
As the pandemic has wreaked havoc on both developed and developing country finances, the IMF moved to address the liquidity shortfalls in the global economic system and help provide financing for many countries. Given the pronounced contraction in output and employment, this injection of liquidity represents a lifeline to countries with scarce reserves. SDRs buy time as they can be used to finance critical expenditure, build reserves, and service debts, although they do not provide a long-term remedy for underlying problems. In operational terms, the IMF SDR department facilitates the exchange of existing SDRs between countries and reduces any transaction costs.
The formula for SDR allocation is based on a country’s quota within the IMF, which reflects its relative position in the world economy (Table 1). The problem with the SDR allocation is that richer countries receive more than poorer countries. In fact, barely 3 percent of the $650 billion total in pandemic response went to low-income countries, and only 30 percent went to middle-income emerging markets. In other words, the countries that are most in need of financial relief and support are not the top beneficiaries of the SDRs. Instead, countries like the U.S., which can print its money, and China, which has several trillions in reserves, benefit the most.
This disconnect occurs because SDRs were created to address potential liquidity shortfalls in an entirely different monetary system rather than in the present context. As a result, experts are proposing reforms to this system. In October 2021, the IMF began building support among members for a proposed “Resilience and Sustainability Trust”—a funding mechanism that would allow richer countries to channel their IMF reserves to poorer countries in need. By lending at cheaper rates and with longer maturities than the IMF’s traditional lending terms, and with funding targeted toward areas such as climate and pandemic preparedness, the trust could help channel funds toward development projects. Another potentially good option is for the IMF to work closely with the regional development banks, such as the African Development Bank, to channel some of the SDR financing through the regional bank’s lending program. Given the regional banks’ proximity to the client, this approach could help to ensure greater links to the development strategies and programs of member states.
Table 1. Select country SDR quotas and SDR allocations
Allocation (USD billions)
SDRs were not originally designed as open-ended cash transfers. For one, SDRs are not included in the assessment of debt sustainability. While the SDRs can provide liquidity, there is no mechanism for ensuring that money is used productively and reaches those in need. Conversion of SDRs into foreign currency happens on a sovereign level with few strings attached, meaning multilateral leaders cannot ensure that the SDRs are properly used for COVID-19 relief. There is also no discrimination between progressive or dictatorial countries in terms of SDR allocation. Some of the SDRs can end up being used by developing-country governments to pay debt service to public and private creditors in the absence of debt restructuring. For instance, SDRs can be used to boost reserves in Nigeria and South Africa, to pay back debt in the case of Argentina or, in the case of the CFA franc zone, especially in countries like Equatorial Guinea and Republic of Congo, to postpone necessary governance and exchange rate reforms. In this context, it would be good to have oversight by international experts to ensure SDRs are used for developmental impact. However, even assuming effective governance frameworks, for low-income African countries, the flows of SDRs may be too low to have a strong impact anyway.
Unless we believe limited liquidity shortfalls of a more-or-less temporary nature are the only consequence of current macroeconomic and public health stresses, policymakers should not just fall back on SDRs to avoid the more complex questions typically raised in the context of conventional debt or more permanent financial transfers. Beyond a limited (and welcome boost), liquidity SDRs appear to be an imperfect substitute for a financing package able to serve both specific pandemic relief and long-term development objectives. In sum, SDRs represent a second-best solution to a complex problem, with clear advantages and clear shortcomings.
( 6 mins) COVID-19 has left a legacy of record-high debt and shifted the trade-offs between benefits and costs of accumulating government debt. How do these trade-offs manifest themselves? And how does the current debt boom compare with previous episodes? We argue that the debt legacy of the pandemic is exceptional by historical standards in a way that warrants prompt policy action.
The pandemic’s debt legacy
The recent fiscal deterioration in advanced economies and emerging market and developing economies (EMDEs) stands apart over the past half-century. Output collapses and government spending to keep economies afloat triggered a massive increase in global debt levels. In 2020, global government debt increased by 13 percentage points of GDP to a new record of 97 percent of GDP. In advanced economies, it was up by 16 percentage points to 120 percent of GDP and, in EMDEs, by 9 percentage points to 63 percent of GDP.
Even before the pandemic, the global economy experienced an unprecedented wave of debt accumulation that started in 2010—the largest, fastest, and most broad-based of four global debt waves since 1970. In EMDEs, the accompanying widening of fiscal deficits and the speed at which both government and private debt rose far exceeded changes in previous waves of debt.
This rapid increase in debt is a major cause for concern because of the risks associated with high debt. Previous waves of debt ended in widespread financial crises, such as the Latin American debt crises in the 1980s and the East Asian financial crisis in the late 1990s.
Trade-offs of debt accumulation
The pandemic has vividly illustrated the benefits of accumulating debt in the role of large fiscal support programs during the 2020 global recession. They were a critical policy response to avoid worse economic outcomes. They supported household incomes, kept businesses afloat, and helped stabilize financial markets.
However, as the initial recovery from the pandemic gives way to a new normal, the balance of benefits and costs of debt accumulation is increasingly tilting toward costs. The costs of debt include interest payments, the possibility of debt distress, constraints that debt may impose on policy space and effectiveness, and the possible crowding out of private sector investment (Figure 1).
As the global economy strengthens, financial conditions are likely to tighten, whether because central banks begin to normalize monetary policy or because investors expect higher inflation. In EMDEs, this may be accompanied by depreciations that put pressure on debt sustainability in those countries with a large share of foreign currency-denominated debt. Even where foreign currency-denominated debt is limited, rising borrowing cost may erode debt sustainability, especially if growth fails to rebound strongly. Record-high EMDE debt makes countries vulnerable to financial market stress. Meanwhile, a recovery in domestic demand and closing output gaps may make additional fiscal stimulus unhelpful.
Ongoing debt booms
And many EMDEs are now particularly vulnerable to financial stress. More than two-thirds of EMDEs are currently experiencing debt booms. Their median government debt boom currently underway is similar in magnitude to, but has already lasted three years longer than, the median past debt boom (Figure 2). Current booms have been accompanied by a considerably larger fiscal deterioration than past booms (Figure 3). And booms currently underway have also been associated with slower output, investment, and consumption growth than in previous episodes.
Historically, about half of such booms in EMDEs were associated with financial crises either during the boom itself or in the two years after the end of the boom. Government debt booms associated with financial crises featured significantly weaker macroeconomic outcomes than booms without crises.
Low-income countries (LICs) are particularly at risk of debt distress, both because of high debt levels and because of a fragile composition of debt. In LICs, government debt rose by 7 percentage points, to 66 percent of GDP, in 2020. The composition of LIC debt has become increasingly non-concessional over the past decade as they have accessed capital markets and borrowed from non-Paris Club creditors. Since the end of April 2021, about one-half of LICs have been classified as being at high risk of debt distress or already in debt distress.
What to do?
National policymakers, as well as the global community, need to act urgently to address debt-related risks. Unfortunately, there is no easy policy fix that EMDE policymakers can implement to overcome these risks. For these economies, containing the potential risks associated with accumulating debt may mean resorting to alternatives for borrowing, including better spending and revenue policies, in an improved institutional environment. Spending can be shifted toward areas that lay the foundation for future growth, including education and health spending as well as climate-smart investment to strengthen economic resilience. Government revenue bases can be broadened by removing special exemptions and strengthening tax administrations. Business climates and institutions can be strengthened to support vibrant private sector growth that can yield productivity gains and expand the revenue base.
The global community can play a significant role in supporting a return to fiscal sustainability in EMDEs. In the near term, this includes supporting the vaccine rollout in these economies, where it has lagged and has weighed on the recovery. In the medium term, this includes fostering an open and rules-based trade and investment climate that has been a critical growth engine for many economies in the past. For some EMDEs, and LICs in particular, additional support may be needed to return debt to manageable levels, including debt relief.
( 14 mins) Avant même que la COVID-19 ait laissé 1,6 milliard d’élèves non scolarisés au début de 2020, des millions d’enfants et de jeunes dans le monde n’avaient pas accès à l’éducation de qualité dont ils avaient besoin pour mener une vie saine, sure et productive. Pire encore, les enfants les plus pauvres et les plus marginalisés continuent d’être les plus touchés par cette crise de l’apprentissage, perdant ainsi leur droit à l’éducation. Cette situation est lourde de conséquences pour les générations à venir, notamment en termes de pauvreté, d’inégalités, de changement climatique et de santé publique.
Il est urgent d’agir pour élargir rapidement et durablement l’accès à des possibilités d’apprentissage de qualité pour tous les enfants. Bien entendu, la question est de savoir “comment?” S’il existe de nombreuses innovations qui améliorent l’apprentissage des enfants, la grande majorité ne touche qu’une petite fraction des enfants qui en ont besoin. Par conséquent, il existe une demande croissante pour plus de probations et de conseils sur la manière d’identifier, d’adapter et d’étendre des politiques et des pratiques rentables qui aboutiraient à l’apprentissage de millions d’enfants supplémentaires.
Laboratoire de Mise à l’Echelle en Temps Réel de la Côte d’Ivoire : Accompagner les efforts pour générer des changements durables et significatifs dans l’apprentissage fondamental des enfants
En réponse, le Centre pour l’Education Universelle (CEU) de Brookings a étudié les efforts visant à mettre à l’échelle et à soutenir les initiatives fondées sur des preuves et conduisant à des améliorations à grande échelle dans l’apprentissage des enfants. Le CEU a mis en oeuvre une série de Laboratoires de Mise à l’Echelle en Temps Réel (RTSL), en partenariat avec des institutions locales dans plusieurs pays, afin de produire des preuves et de fournir des recommandations pratiques autour du processus de mise à l’échelle dans l’éducation mondiale – encourageant un lien plus fort entre la recherche et la pratique. Ce rapport porte sur l’un des laboratoires de mise à l’échelle en Côte d’Ivoire – lancé en 2019 en collaboration avec le programme Transformer l’Education dans les Communautés du Cacao (TRECC) et le Ministère de l’Education Nationale et de l’Alphabétisation (MENA).
Il est articulé autour du processus de mise en oeuvre, d’adaptation et de mise à l’échelle du Programme d’Enseignement Ciblé (PEC), dirigé par le gouvernement, à travers une approche de rattrapage scolaire visant à améliorer la lecture et le calcul en début de scolarité et adapté de l’approche Teaching at the Right Level (TaRL). Bien que le laboratoire se soit concentré sur l’expérience du PEC à ce jour, ce programme sert d’étude de cas pour des questions plus larges sur la manière dont une initiative basée sur des preuves peut progresser vers une échelle nationale durable, avec des leçons qui sont transférables au-delà du PEC et de la Côte d’Ivoire.
La première section du rapport fournit un bref historique du cas, y compris une vue d’ensemble du Laboratoire de Mise à l’Echelle en Temps Réel et de l’écosystème de l’éducation en Côte d’Ivoire, ainsi qu’une brève description des principaux acteurs et initiatives engagés dans le PEC. La deuxième section détaille le parcours de la mise en oeuvre, de l’adaptation et de l’expansion du PEC en Côte d’Ivoire à ce jour, en explorant les facteurs critiques, les opportunités et les défis liés à sa conception, sa mise en oeuvre, son financement et son environnement favorable. La troisième section propose des leçons et des recommandations ciblées organisées autour de quatre thèmes clés qui sont apparus comme essentiels pour renforcer l’expansion continue du PEC, ainsi que pour informer les futurs efforts de mise à l’échelle de l’éducation en Côte d’Ivoire et au-delà.
Le parcours de passage à l’échelle du PEC: Une confluence de facteurs avantageux
A bien des égards, le PEC représente le « scénario idéal » pour le passage à l’échelle et la pérennisation d’une initiative au sein d’un système éducatif formel. Le PEC a bénéficié d’une confluence de facteurs en sa faveur – dont certains ont été orchestrés de manière stratégique et systématique, et d’autres ont émergé de manière fortuite. L’approche de TRECC axée sur les problèmes a favorisé le développement de l’adhésion du gouvernement au PEC dès le début et a contribué à sa forte appropriation par le gouvernement. La simplicité de l’approche, le fait qu’elle rejoint les príncipes théoriques que les enseignants apprennent au cours de leur formation initiale, son pilotage par la prestation directe du gouvernement, ses résultats convaincants et sa trajectoire précise pour la mise à l’échelle dans le système éducatif ont également favorisé l’engagement du gouvernement et facilité l’expansion du PEC.
Les partenariats noués dans le cadre du modèle TRECC ont été d’autres facteurs importants pour susciter le soutien au PEC, notamment la possibilité d’expérimenter différentes solutions potentielles avant d’en retenir une, le rôle d’une tierce partie neutre évaluant les résultats des projets pilotes, le soutien technique d’organisations ayant initialement développé et étudié l’approche TaRL, et l’existence d’un laboratoire de mise à l’échelle réunissant diverses parties prenantes pour la réflexion et l’apprentissage par les pairs. Le PEC a également réussi à obtenir un soutien de haut niveau au sein du MENA, avec des personnes influentes qui le défendent. Ce soutien essentiel a été maintenu malgré les changements politiques et les changements dans l’environnement éducatif plus large, incluant une pandémie mondiale. Enfin, la disponibilité d’un financement pour le PEC au-delà de la phase pilote initiale – y compris un financement pour une adaptation et une expansion supplémentaires et un accès potentiel à un financement quinquennal par la création d’un fonds commun public-privé – a été essentielle pour que le PEC dépasse le stade de projet éphémère et devienne une approche que le gouvernement a l’intention d’étendre au sein du système.
Néanmoins, malgré les nombreux facteurs en sa faveur, l’expansion et le maintien du PEC en Côte d’Ivoire ne sont pas garantis et des défis critiques demeurent, notamment la capacité limitée du gouvernement à incorporer et à pourvoir le modèle dans les systèmes existants avec qualité, la persistance d’une mentalité de projet chez certains acteurs clés impliqués, et une attention insuffisante à l’engagement des parties prenantes de l’éducation au niveau local (y compris les enseignants et les communautés). D’autres contraintes potentielles à l’expansion future et au maintien du PEC incluent des retards dans le lancement du nouveau fonds commun et des difficultés à identifier et à garantir un financement national durable.
Les leçons à tirer pour renforcer l’expansion du PEC et informer les futurs efforts de mise à l’échelle
En accompagnant le parcours de mise à l’échelle de PEC, des leçons ont été tirées du cas centré autour de quatre thèmes clés qui ont été déterminants pour le succès de la mise à l’échelle de PEC à ce jour, et qui continueront à jouer un rôle essentiel dans les efforts futurs. Ces thèmes sont: 1) l’institutionnalisation comme voie vers une mise à l’échelle durable; 2) les partenariats et les champions; 3) les coûts et le financement; et 4) l’adaptation et l’apprentissage continu. Chacun de ces thèmes offre des leçons tirées du cas du PEC et des recommandations ciblées, non seulement pour soutenir les progrès en cours afin d’étendre et d’approfondir l’impact du PEC, mais aussi pour informer les efforts de mise à l’échelle d’autres initiatives d’éducation basées sur des preuves. Un bref aperçu de chacune des leçons est présenté ci-dessous, avec des recommandations ciblées pour les responsables de la mise en oeuvre, les décideurs politiques, les bailleurs de fonds et les chercheurs, lesquelles sont plus amplement détaillées dans le rapport complet.
1. L’institutionnalisation comme voie à la mise à l’échelle dans l’éducation
Assurer sans relâche dès le départ une concentration sur qui va livrer à grande échelle : Le pilotage d’une initiative avec le gouvernement demande plus de temps et de capacités au départ, mais il favorise également l’adhésion, détermine ce qui est faisable et démontre le potentiel de fonctionnement d’une solution dans le système.
Se concentrer sur la scalabilitéa d’une innovation dans le contexte local : S’il est tentant de rechercher des innovations qui bouleversent considérablement les méthodes de travail existantes ou qui testent des technologies de pointe, il est essentiel de se concentrer sur l’aspect pratique de la mise à l’échelle d’une innovation dans un contexte particulier, notamment sur la meilleure façon de l’intégrer durablement et équitablement dans les systèmes existants. Souvent, les innovations ayant le plus grand potentiel d’impact à grande échelle sont celles qui sont les plus faisables à supporter par le système.
Créer des structures de coordination dotées de capacités suffisantes et d’un mandat gouvernemental fort : Le passage à l’échelle par l’institutionnalisation nécessite une structure de coordination dotée d’un mandat de haut niveau pour prendre des décisions, harmoniser les efforts et s’assurer de l’avancement du travail de mise à l’échelle – en particulier lorsque l’institutionnalisation progresse au-delà de la description de poste
d’un individu ou d’un département.
Maintenir un pied sur l’accélérateur, et l’autre sur les freins : Même avec l’adhésion substantielle du gouvernement à la mise à l’échelle, il est important que toutes les parties prenantes comprennent la nécessité d’une approche à plus long terme et progressive de la mise à l’échelle, en mettant l’accent sur les questions de qualité et d’équité, et en équilibrant les compromis inévitables au cours du processus de la mise à l’échelle.
2. Partenariats et collaboration pour la mise à l’échelle dans l’éducation
Catalyser l’action collective, et repérer le point de rendement décroissant: L’engagement du gouvernement dans le processus de mise à l’échelle peut être essentiel pour étendre et soutenir une initiative d’éducation, mais une action collective est néanmoins nécessaire pour apporter des perspectives, des ressources, des expertises et des rôles différents. En même temps, une attention suffisante doit être accordée à la clarification de la motivation et des incitations de chaque partenaire, de la valeur ajoutée, de la vision de la mise à l’échelle et du succès, et de la tolérance au risque.
Soutenir les intermédiaires pour favoriser les partenariats et aligner les intérêts: Les organisations intermédiaires ou tierces – y compris les bailleurs de fonds – peuvent jouer un rôle essentiel de passerelle pour aligner des incitations disparates, développer des approches innovantes pour tirer parti des forces et perspectives uniques de chaque acteur, et rassembler les parties prenantes pour défendre un objectif commun.
Cultiver une ligue de champions de la mise à l’échelle: La création des conditions nécessaires à la diffusion de solutions efficaces requiert des champions de la mise à l’échelle à tous les niveaux au sein et en dehors du gouvernement, des salles de classe et des communautés, ainsi que la création délibérée d’un espace pour travailler ensemble différemment – appelé à perturber les modèles existants de collaboration et de prise de
décision. Le recours à une approche d’apprentissage collaborative, telle que le Laboratoire de Mise à l’Echelle en Temps Réel, est un moyen permettant de “rassembler les éléments du système dans la réunion” et à instaurer une nouvelle façon de travailler.
Soutenir un changement d’état d’esprit et de comportement pour la mise à l’échelle: L’identification et la mise en place d’un cadre de leaders et d’agents du changement pour la mise à l’échelle ne se limite pas à obtenir le soutien des parties prenantes pour la mise à l’échelle d’une initiative particulière: elles requièrent une sensibilisation aux principes clés de la mise à l’échelle, l’encouragement de l’application de ces principes par des actions concrètes et un changement de comportement, ainsi que le renforcement des compétences et des aptitudes nécessaires à la mise à l’échelle de l’impact.
3. Coûts et financement de la mise à l’échelle
Faire la lumière sur le financement public à long terme : Pour beaucoup d’innovateurs et de praticiens, les processus budgétaires et les filières du gouvernement restent opaques, et davantage de clarté est indispensable sur la méthode d’alignement ou d’intégration dans ces processus pour mobiliser des ressources à long terme pour une échelle durable.
Augmenter le soutien pour faire des projections de coûts solides à l’échelle: Il existe un besoin important de renforcer l’expertise et les capacités locales pour collecter, analyser et utiliser les données sur les coûts afin d’informer les projections à l’échelle. Des incitations sont nécessaires pour soutenir la collecte, l’analyse et le partage de ces données, et pour encourager une plus grande transparence et des opportunités d’apprentissage.
Tirer parti du potentiel du financement commun pour franchir la “vallée de la mort”: La collaboration des donateurs et le financement groupé peuvent fournir un financement relais important pour la mise à l’échelle, en aidant les initiatives à effectuer la difficile transition du stade pilote à la mise en oeuvre à grande échelle, mais il faut en apprendre davantage sur les avantages et les défis de ces mécanismes.
4. Adaptation et apprentissage collaboratif dans le processus de mise à l’échelle
Intégrer un processus d’apprentissage continu dans les systèmes gouvernementaux: L’intégration d’une approche d’apprentissage continu, telle que le Laboratoire de Mise à l’Echelle en Temps Réel, dans les systèmes gouvernementaux présente des avantages tangibles pour soutenir la mise en oeuvre, l’adaptation et la mise à l’échelle, avec des circuits de retours d’informations rapides et des possibilités de réflexion et de corrections de trajectoire. Le leadership gouvernemental d’un processus de type laboratoire peut conférer l’autorité nécessaire pour développer, tester et affiner une stratégie de mise à l’échelle avec les décideurs concernés.
Renforcer la capacité d’adaptation pour répondre à des environnements évoluant rapidement: Trop souvent, les adaptations testées dans le cadre du processus de mise à l’échelle ne sont pas systématiquement planifiées ou bien documentées, et l’apprentissage est perdu ; des approches plus systématiques pour planifier et tirer des enseignements des changements anticipés et spontanés sont nécessaires.
Investir du temps et des ressources dans l’apprentissage et l’échange entre pairs: De nombreuses initiatives en cours de mise à l’échelle travaillent de manière isolée et, malgré les différences contextuelles, peuvent bénéficier d’une plus grande collaboration pour partager leurs expériences, réfléchir aux défis et opportunités communs et résoudre les problèmes collectivement. L’apprentissage par les pairs doit aller au-delà d’occasions ponctuelles et doit être soutenu en tant qu’un aspect intrinsèque du travail qui bénéficie de suffisamment de temps, de capacités et de ressources.
Bien qu’elle n’en soit qu’à ses premiers chapitres, l’histoire du PEC est instructive à bien des égards. Plus que tout, le récit du PEC a mis en lumière les efforts inlassables et inspirants de tant de parties prenantes de l’éducation en Côte d’Ivoire qui s’efforcent d’améliorer les résultats de l’apprentissage pour les enfants, en particulier les plus vulnérables.
Et pourtant, le cas du PEC souligne également, que même avec ce scénario de scalabilité et d’opportunité « quasi idéal », l’augmentation de l’impact sur l’éducation reste une entreprise difficile et à long terme qui ne peut être considérée comme acquise. On peut dire que le PEC entre maintenant dans son chapitre le plus difficile, à savoir la phase intermédiaire delicate de la mise à l’échelle, car il dépasse le stade d’un projet pilote à petite échelle pour s’intégrer davantage dans les opérations gouvernementales et atteindre un nombre beaucoup plus important d’enfants.
Cette phase nécessitera une adaptation et une expérimentation continues, la collecte de données et leur utilisation dans des cycles d’apprentissage rapides afin de s’assurer que l’efficacité du PEC est maintenue à mesure qu’il se développe. Indépendamment de ce que l’avenir nous réserve, les efforts du gouvernement ivoirien pour mettre à l’échelle et soutenir le PEC – en partenariat avec divers acteurs – continueront à fournir de riches enseignements sur la mise à l’échelle et le changement systémique pour la Côte d’Ivoire et de nombreux pays dans le monde.
Télécharger le rapport complet ou les conclusions sommaires.
Credit photo: TaRL Africa
( 10 mins) Even before COVID-19 left as many as 1.6 billion students out of school in early 2020, millions of children and youth around the world did not have access to the quality education they needed to lead healthy, safe, and productive lives. Even worse, the poorest and most marginalized children continue to be most affected by this learning crisis, losing out on their right to education. This situation has far-reaching consequences for generations to come, including on poverty, inequality, climate change, and public health. Urgent action must be taken to rapidly and sustainably expand access to high-quality learning opportunities for all children. Of course, the question is “how?” While there exist many innovations that improve children’s learning, the vast majority only reach a small fraction of children in need. As a result, there is growing demand for more evidence and guidance on how to identify, adapt, and scale cost-effective policy and practice that lead to millions more children learning.
In response, the Center for Universal Education (CUE) at Brookings has been investigating efforts to scale and sustain evidence-based initiatives leading to large-scale improvements in children’s learning. CUE has been implementing a series of Real-time Scaling Labs (RTSL), in partnership with local institutions in several countries, to generate evidence and provide practical recommendations around the process of scaling in global education—encouraging a stronger link between research and practice.
This report focuses on one of the scaling labs in Côte d’Ivoire—launched in 2019 in collaboration with Transforming Education in Cocoa Communities (TRECC) and the Ministry of National Education and Literacy (MENA). It centers around the government-led process of implementing, adapting, and scaling the Programme d’Enseignement Ciblé (PEC), a remedial education approach to improving early grade reading and math adapted from Teaching at the Right Level (TaRL). While the lab has focused on the experience of PEC to date, it serves as a case study into larger questions of how an evidence-based initiative can achieve progress toward national sustainable scale, with lessons that are transferable beyond PEC and Côte d’Ivoire.
PEC’s scaling journey: A confluence of advantageous factors
In many ways, PEC represents the “ideal scenario” for scaling and sustaining an initiative within a formal education system. PEC benefitted from a confluence of factors in its favor—some of which have been strategically and systematically orchestrated, others which have serendipitously emerged. TRECC’s problem-driven approach supported the development of government buy-in for PEC from the beginning and contributed to strong government ownership. The simplicity of the approach, the fact that it resonates with theoretical principles that teachers learn during initial training, its pilot through direct government delivery, its convincing results, and its clear pathway for scaling in the education system also fostered government engagement and facilitated PEC’s expansion.
The story of PEC has highlighted the tireless and inspiring efforts of so many education stakeholders in Côte d’Ivoire striving to improve learning outcomes for children, especially the most vulnerable.
The partnerships forged in the TRECC model were other important factors in generating support for PEC, including the opportunity to experiment with different potential solutions before settling on one, the role of a neutral third-party assessing pilot results, technical support from organizations that originally developed and studied the TaRL approach, and the existence of a scaling lab bringing together diverse stakeholders for reflection and peer-learning. PEC has also had success in gaining senior-level support within MENA, with key influential individuals championing it. This critical support has been maintained despite political turnover and shifts in the broader education environment, including a global pandemic. Finally, the availability of financing for PEC beyond an initial pilot phase—including funding for additional adaptation and expansion and potential access to five years of financing through the creation of a public-private pooled fund—has been essential for moving PEC beyond a short-lived project to an approach that the government intends to scale within the system.
Nonetheless, despite the many factors in its favor, scaling and sustaining PEC in Côte d’Ivoire is not guaranteed and critical challenges remain, including limited government capacity to incorporate and deliver the model in existing systems with quality, the persistence of a project mentality among some key actors involved, and insufficient attention to the engagement of education stakeholders at local levels (including teachers and communities). Other potential constraints to future expansion and sustaining of PEC include delays encumbering the launch of the new pooled fund and challenges around identifying and securing sustainable national financing.
Lessons to strengthen PEC’s expansion and inform future scaling efforts
Through accompanying the scaling journey of PEC, lessons emerged from the case centered around four key themes that were consequential to PEC’s scaling success to date, and which will continue to play a critical role in future efforts. These themes are: 1) institutionalization as a pathway to sustainable scale; 2) partnerships and champions; 3) costs and financing; and 4) adaptation and continuous learning. Each of these themes offers lessons from the case of PEC and targeted recommendations not only to support ongoing progress to expand and deepen the impact of PEC but also to inform scaling efforts of other evidence-based education initiatives. Below is a brief overview of each of the lessons with targeted recommendations for implementers, policymakers, funders, and researchers that are further detailed in the full report.
1. Institutionalization as a path to scaling in education
Ensure a relentless focus on who will deliver at large-scale from the start: Piloting an initiative with government takes more time and capacity up front, but also fosters buy-in, determines what is feasible, and demonstrates potential for a solution to work in the system.
Focus on the scalability of an innovation in the local context: While it is tempting to seek innovations that significantly disrupt existing ways of working or test cutting-edge technology, it is critical to focus on the practicality of scaling an innovation in a particular context, including how best to infuse it sustainably and equitably into existing systems. Often, the innovations with the most potential for large-scale impact are those that are most feasible for the system to bear.
Create coordinating structures with sufficient capacity and a strong government mandate: Scaling through institutionalization requires a coordinating structure with a high-level mandate to make decisions, harmonize efforts, and ensure the work of scaling moves forward—particularly once institutionalization progresses beyond any individual’s or department’s job description.
Maintain one foot on the gas, and one foot on the brakes: Even with significant government buy-in for scaling, it is important that all stakeholders understand the need for a longer-term, phased approach to scaling, with a laser focus on quality and equity issues, balancing inevitable trade-offs during the scaling process.
2. Partnerships and collaboration for scaling in education
Catalyze collective action, as well as recognize the point of diminishing returns: Government engagement in the scaling process may be critical for expanding and sustaining an education initiative, but collective action is nonetheless required to bring different perspectives, resources, expertise, and roles. At the same time, sufficient attention must be given to clarify each partner’s motivation and incentives, value addition, vision of scaling and success, and risk tolerance.
Support intermediaries to foster partnerships and align incentives: Intermediary or third-party organizations—including funders—can play a critical bridging role in scaling to align disparate incentives, develop innovative approaches to leverage the unique strengths and perspectives of each actor, and gather stakeholders together behind a shared goal.
Cultivate an alliance of scaling champions: Creating conditions for effective solutions to spread requires scaling champions at all levels within and outside government, classrooms, and communities, and deliberately creating space to work together differently—disrupting existing patterns of collaboration and decisionmaking. Leveraging a collaborative learning approach, such as the RTSL, can help to “bring the system into the room” and build a new way of working.
Support a mindset shift and behavior change for scaling: Identifying and building a cadre of scaling leaders and change agents requires more than getting these stakeholders to support scaling a particular initiative—it requires raising awareness of key scaling principles, encouraging application of these principles through concrete action and behavior change, and strengthening the competencies and skills needed to scale impact.
3. Costs and financing for scale
Shed light on long-term government financing: For many innovators and implementers, government budgetary processes and pipelines remain opaque, and more clarity is needed on how to align with or integrate into these processes to mobilize long-term resources for sustainable scale.
Increase support to make sound cost projections at scale: There is significant need to build local expertise and capacity to collect, analyze, and use cost data to inform scaling projections. Incentives are needed to support its collection, analysis, and sharing, and encourage greater transparency and opportunities for learning.
Leverage the potential of pooled financing to cross the “valley of death:” Donor collaboration and pooled funding can provide important bridge financing for scale, helping initiatives make the challenging transition from pilot to large-scale implementation, but more learning is needed on the benefits and challenges of these mechanisms.
4. Adaptation and collaborative learning in the process of scaling
Integrate a continuous learning process within government systems: There are tangible benefits to infusing a continuous learning approach, such as the RTSL, into government systems to support implementation, adaptation, and scaling, with quick feedback loops and opportunities for reflection and course corrections. Government leadership of a lab-like process can confer the necessary authority to develop, test, and refine a scaling strategy with relevant decisionmakers.
Strengthen adaptive capacity to respond to rapidly changing environments: Too often adaptations being tested in the scaling process are not systematically planned for or well documented, and the learning is lost; more systematic approaches to planning for and learning from anticipated and spontaneous changes are needed.
Invest time and resources in peer learning and exchange: Many initiatives in the process of scaling are working in isolation, and in spite of contextual differences, can benefit from greater collaboration to share experiences, reflect on common challenges and opportunities, and problem-solve collectively. Peer learning must go beyond one-off occasions and should be supported as an intrinsic aspect of the work that receives sufficient time, capacity, and resources.
Though still in its early chapters, PEC’s scaling story is instructive on many levels. More than anything, the story of PEC has highlighted the tireless and inspiring efforts of so many education stakeholders in Côte d’Ivoire striving to improve learning outcomes for children, especially the most vulnerable.
And yet the case of PEC also underscores that even with this almost “best case” scenario of scalability and opportunity, scaling impact in education remains a challenging and long-term endeavor that cannot be taken for granted. PEC is arguably now entering its most challenging chapter—navigating the tenuous middle phase of scaling—as it pushes beyond a small-scale pilot to become further embedded in government operations and reach significantly more children. This phase will require continued adaptation and experimentation, collecting data, and using them in rapid learning cycles to ensure PEC’s efficacy is sustained as it expands. Regardless of what the future holds, the Ivorian government’s efforts to scale and sustain PEC—in partnership with various actors—will continue to provide rich insights into scaling and system-wide change for Côte d’Ivoire and many countries around the world.
Read the full report or the summary findings (forthcoming).
Photo credit: TaRL Africa
( 12 mins) After years of inactivity, momentum is gathering for policy action on issues related to consumer financial data in the United States. In July, the president issued an executive order encouraging the Consumer Financial Protection Bureau (CFPB) to enable data portability in financial services. The CFPB issued an advance notice of proposed rulemaking last year and expects to commence a rulemaking process in spring 2022. Congress has shown interest in the subject as well, most recently by holding a Task Force on Financial Technology hearing on consumers’ right to access financial data.
Such momentum is long overdue. Data portability in financial services has the potential to help consumers in their choice of financial service provider and enable innovation by new entrants seeking to offer a better deal or a novel product or service. While data portability is necessary to realize a more competitive and innovative financial services sector, other consumer data rights and protections are also needed. Our research indicates that consumers are demanding greater control than the current legal and regulatory framework governing financial data provides. To be responsive to these important interests, both regulatory and legislative action is needed to ensure that consumers have appropriate data rights and protections.
In the wake of the global financial crisis and the ensuing public outrage over the behavior of “too big to fail” banks, policymakers in the early 2010s found themselves looking for ways to promote competition in financial services. While many debated the merits of breaking up large banks or a new Glass-Steagall Act to separate retail and investment banking, others looked for ways to promote competition from the ground up. Around the world, policymakers began to contemplate data portability measures as a way to loosen banks’ hold on dissatisfied customers.1
In the United States, this responsibility fell to the CFPB. Under Section 1033 of the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB was empowered to prescribe rules to enable data portability in financial services.2 However, with numerous other priorities on the CFPB’s to-do list, rulemaking on Section 1033 never took place. Instead, the CFPB issued non-binding principles for data sharing and closely monitored developments in the market.
Meanwhile, consumer demand for data portability accelerated, driven by the burgeoning fintech revolution. To meet this demand, “data aggregation” companies such as Plaid began to connect consumers’ favorite fintech apps to their bank accounts. Data aggregators often used online banking login credentials shared by consumers to gain entry to consumer accounts and “screen-scrape” data available to consumers via online banking portals. Though this practice is still in use, aggregators have more recently begun to enter into contracts with banks, credit unions, core technology providers, and others to lessen dependence on credential-sharing and screen-scraping in favor of the use of tokenized account access and application program interfaces (APIs).
The financial data sharing ecosystem largely built on this technological framework has given rise to a vibrant fintech market, including many innovative companies who use consumer financial data to design products and services that help consumers improve their financial health. Today, fintechs offer products that use consumers’ financial data to help them avoid costly overdraft fees when their balances dwindle, build emergency savings when their balances grow, and optimize their bill payments to ensure that bills are paid on time without creating a liquidity shortfall. Other fintechs use cashflow data for underwriting purposes, a practice that shows evidence of increasing access to credit among those without a credit history or a credit score and those whose credit scores understate their creditworthiness.3 Still other fintechs use financial data to enable their customers to send money to friends and family within and between countries. These services are widely used, and their popularity has only increased as more and more banking activity moved online during the COVID-19 crisis.
In early 2021, the Financial Health Network conducted a nationally representative survey to explore consumers’ interactions with, and attitudes towards, the financial data ecosystem. According to our research, more than two thirds of banked consumers are fintech users, having linked financial apps to their checking account. In contrast with banks and credit unions,4 young people and people of color are particularly likely to use fintech apps, with apps used to send money to friends and family being the most common type of fintech app and the type of fintech app used most frequently.
The need for data portability
The lack of a comprehensive legal framework designed to govern the rights and duties of the various players in this ecosystem creates risks for individual consumers, financial institutions, and the functioning of the financial data ecosystem as a whole. Last year, the Financial Health Network partnered with FinRegLab, Flourish Ventures, and the Mitchell Sandler law firm to produce a comprehensive analysis of the legal and regulatory landscape governing consumer financial data. This analysis uncovered numerous open interpretive and policy questions related to Section 1033 as well as older statutes covering a set of interlocking issues including privacy and security under the Gramm-Leach-Bliley Act, accuracy and privacy under the Fair Credit Reporting Act, fairness under the Equal Credit Opportunity Act, and liability under the Electronic Funds Transfer Act.
Unless regulators take action, these open questions will continue to fester and have the potential to impede data portability. Already there are reports of some financial institutions restricting access to consumer data.5 Such restrictions can serve to entrench incumbent institutions and limit competition to the detriment of consumers. These restrictions also are out of step with consumer preferences. According to our research, 62 percent of consumers are in favor of data portability, believing that their bank or credit union should be required to share their personal data with another company (such as a fintech provider) if the consumer directs it to do so.
Importantly, this majority holds across demographic groups, including age, gender, education, race/ethnicity, and household income. Support for data portability in financial services is also bipartisan, with majorities of self-identified Democrats, Republicans, and Independents in favor of it.
Support for data portability holds regardless of the type of institution that serves as a consumer’s primary bank or credit union. This underscores the importance of ensuring that customers of small financial institutions with more limited technological resources have access to secure, affordable solutions to enable data portability.
These results confirm a broad consensus in favor of data portability that has been increasingly apparent for some time. Indeed, at the CFPB’s Symposium on Consumer Access to Financial Records in early 2020, few participants disputed that data portability is a right that should be available to consumers and that rulemaking on Section 1033 should guarantee.6 What they did not agree on was what other rights and protections should be guaranteed and how best to do so.
The data minimization principle
Among the issues dividing large banks, small banks, fintechs, data aggregators, and other market participants at the CFPB’s 2020 Symposium was the question of the scope. What kind of data fields should be able to be shared under Section 1033, and who should decide what kind of data are appropriate for what use case?
In the absence of regulatory guidance, the scope of data available to be shared at a consumer’s direction today varies greatly depending on where a consumer banks. Practically, this means that while some consumers currently enjoy a high degree of data portability, others have a much more limited ability to consistently share their data. As a result, consumers are unlikely to understand the scope of the data they share unless they carefully read complex legal disclosures.
The Financial Health Network asked fintech app users who had connected their fintech app to their checking account how much of their checking account data their fintech app is capable of accessing. 41 percent reported believing it could only access the data it needed, 25 percent reported believing it could access all of their checking account data, and the remaining third of respondents reported that they did not know.
When asked about how much of their checking account data fintech apps should be able to access, 87 percent reported believing that their fintech app should only be able to access the data it needs. Only 11 percent reported believing it should be able to access all the data in their checking account. In other words, consumers know what rules they want, but they are not sure if the current system is aligned with their preferences.
As with data portability, this preference for data minimization holds across demographic groups, including age, gender, education, race/ethnicity, household income, and political party affiliation. Unlike data portability, the preference for data minimization is overwhelming, with support usually in the high 80s to low 90s, with at least 75 percent of each demographic group in favor.
This indicates that while consumers desire the right to data portability, they have a strong preference for discretion as they share their data and do not wish to share any data beyond what is required for a given use case. Some data holding financial institutions (such as banks) have also emphasized this data minimization principle. However, those entities have their own competitive incentives to limit data flows and would not be impartial arbiters of what data are needed for a given use case.
With this market dynamic in mind, the CFPB should use its authority under Section 1033 to determine what data must be accessible, how often they must be made available, how long those data can be accessed for, and to whom they may be made available. If the CFPB does not feel it has the authority to impose data minimization limitations on data aggregators and recipients without impeding data portability, further legislative action may be needed to empower the Bureau to ensure that those entities are only accessing the data they need for a given use case, and are only storing that data for the minimum amount of time necessary. Congress will find strong support for this principle across the political and socio-economic spectrums.
Protecting consumers’ privacy
Consumers’ preference for discretion is not limited to the data they choose to share with fintech apps. Indeed, our research indicates that consumers are equally sensitive to financial or personal data about them being shared without their affirmative consent, no matter what institution is doing the sharing. Just as consumers do not want big tech companies sharing data about their browsing patterns without consent, consumers likewise do not want their bank or fintech app sharing financial data about them without their consent. Our survey shows consumers seem to view these forms of data sharing in much the same way, despite other research indicating that consumers have differing levels of trust for these institutions more broadly.7
Almost 90 percent of consumers (consistent among all demographic groups) expressed a preference for data sharing by their primary bank or credit union to be bound by an opt-in standard rather than an opt-out standard.
This strong preference for an opt-in standard stands in sharp contrast with current legal requirements which cannot be changed without legislative action. At present, consumers who do not want their data to be shared must opt-out, and even their ability to do that is limited. Banks are still permitted under the Gramm-Leach-Bliley Act to share consumer data with non-affiliated third parties if the information sharing is subject to one of the numerous exceptions under the law, regardless of whether a consumer might prefer them not to share.8 In other words, the current law places the burden of protecting privacy on consumers, who are expected to carefully parse complex legal disclosures provided by their financial institution and affirmatively opt-out of any optional data sharing. According to our research, only about 1 in 4 consumers reports having done this. As low as that is, it may under-state how rare it is for consumers to opt-out of data sharing. The plurality of banks interviewed in a 2020 study by the Government Accountability Office reported opt-out rates less than 5 percent.
In order to ensure that privacy protections are reflective of consumers’ preferences, we believe that legislative change is needed. The United States is past due for comprehensive data privacy legislation that not only addresses open issues in financial services but also ensures that consumers are afforded strong and consistent data rights and protections when they interact with tech platforms, healthcare providers, educational institutions, and others. However, if such a comprehensive effort remains beyond the reach of Congress, lawmakers should nevertheless build on the bipartisan consensus among consumers and past interest from both Republicans and Democrats in updating consumers’ data rights and protections in financial services. At the very least, data sharing by financial institutions should be bound by an opt-in standard.
As the financial data ecosystem evolves, regulatory and legislative action to ensure that consumers have strong data rights and protections is increasingly urgent. With momentum for action building and consumers having an unusual level of agreement on the need for data portability, data minimization, and data privacy, policymakers should proceed with the clear goal of ensuring that consumers are the primary beneficiary of the use of their financial data.
( 13 mins) More than half of the world’s children are growing up in cities. By 2030, up to 60 percent of the world’s urban population will be under 18 years old. Yet, children and families are often invisible to urban planners, developers, and architects when creating city-wide policies that impact transportation, air and noise pollution, and health and well-being. “The truth is that the vast majority of urban planning decisions and projects take no account of their potential impact on children and make no effort to seek children’s views…All too often, this is down to a simple lack of respect for children’s rights or abilities,” writes Tim Gill in his recent book “Urban Playground.”
A critical component of child-friendly urban planning is prioritizing opportunities for learning and healthy development both in and out of school. This is especially important for children living in communities challenged by decades of discrimination and disinvestment. Deep inequalities plague the education systems in many countries, and the COVID-19 pandemic has widened existing educational equity in worrisome ways. In the U.S., persistent economic disparities among families lead to large differences in educational outcomes. Research shows that as early as age 3, children from lower-income households lag behind their more affluent peers in language and spatial skills.
To address both of these needs, cities around the world are beginning to invest in Playful Learning Landscapes (PLL)—installations and programming that promote children and families’ learning through play in the public realm. The climate for building on this momentum could not be more favorable, or the timing more urgent. In the wake of COVID-19, growing numbers of leaders understand the need to rethink neighborhood investments to enhance health, well-being, and economic opportunity—and to reexamine old views on how and where children develop the competencies and skills needed to thrive—and ask how to build on a community’s fund of knowledge to reduce inequities through culturally-informed spaces. In the U.S., these leaders have a once-in-a-generation chance to channel American Rescue Plan funds for innovations in child development and learning—while making cities more vibrant and inclusive.
As the PLL movement continues to grow, we need more expansive ways to measure its impacts, and to use that information both to improve PLL installations and to garner greater investment in them.
We know from existing installations that PLL is effective at enhancing STEM and literacy skills and increasing child-caregiver interaction in ways that build social and mental capitol. But as the PLL movement continues to grow, we need more expansive ways to measure its impacts, and to use that information both to improve PLL installations and to garner greater investment in them. This brief presents the first iteration of a new metrics framework city-level policymakers, community organizations, the private sector, and philanthropies can use to help assess the positive effects of PLL on learning outcomes, as well as its potential to enhance social interaction and public life in revitalized spaces.
A new approach to child-friendly urban design: Playful Learning Landscapes
PLL is an emerging, interdisciplinary area of study and practice that reimagines the potential of cities as supportive ecosystems for children and families by marrying urban design and placemaking with the science of learning. The Brookings Institution, in collaboration with Temple University and the Playful Learning Landscapes Action Network (PLLAN), is building an interdisciplinary community of practice and responding to the growing interest of stakeholders and decisionmakers around the world to generate evidence and guidance for scaling the PLL approach.
PLL uses human-centered co-design to create learning opportunities in bus stops, parks, and supermarkets and other everyday places—transforming them into enriching, social spaces for children, families, and communities. What makes PLL unique is the critical element of playful learning—a spectrum of child-directed play methods that include free play (no direct adult involvement), guided play (supported by adults toward a learning goal), and games (rule-based activities with learning goals) informed by the latest findings in developmental science. Guided play—the focus of interactions in PLL—allows children to maintain agency during their play with the guidance of an adult to provide structure and focus the activity around a learning goal (e.g., a well-curated exhibit in a children’s museum).
Scaling playful learning in cities
A growing number of cities around the world—including Philadelphia, Chicago, Santa Ana, CA, London, Mumbai, and others—are embracing PLL to support children’s learning outcomes and promote urban renewal, but efforts to scale and sustain these interventions are nascent. To fully realize the potential benefits of PLL, cities need more than a handful of installations placed sporadically around the landscape. To get to scale, municipalities instead must start infusing playful learning principles and design elements into the mainstream practices of government, businesses, and other organizations.
To this end, last year we outlined the steps city-level decisionmakers and stakeholders must take to create rich playful learning environments. These include fostering better coordination among city agencies to support the integration of playful learning efforts into new and existing programs and projects, streamlining regulatory and other processes to make it easier for nonprofits and other groups to implement PLL installations and activities, and collaborating with national organizations that are supporting local efforts. Scaling also requires engaging with neighborhood residents as equal partners in all phases of a project to ensure that designs meet their needs and preferences and communicating the why and how of playful learning to expand its reach and impact.
Brookings now seeks to address key gaps in cities’ knowledge, networks, and capacity and inform strategies that integrate PLL into mainstream urban planning and placemaking—bringing it to scale.
For city leaders, community organizations, the private sector, and philanthropy to put time and resources into expanding PLL, they need hard evidence that it works. This requires a framework that outlines the desired outcomes of PLL and a set of metrics for measuring whether or not those outcomes are achieved.
Measuring Playful Learning Landscapes outcomes
For city leaders, community organizations, the private sector, and philanthropy to put time and resources into expanding PLL, they need hard evidence that it works. This requires a framework that outlines the desired outcomes of PLL and a set of metrics for measuring whether or not those outcomes are achieved. As Senior Fellow Jenny Perlman-Robinson wrote in a Brookings report on PLL in Philadelphia, “Without clarity about definitions of success or without clearly defined metrics for measuring outcomes, it will be challenging to motivate and inform change at large scale.” Moreover, more robust evaluation will help communities know if individual PLL sites are working as intended, which will inform improvements to current as well as future sites.
There is now ample evidence that PLL supports several learning goals. For example, existing research shows that PLL promotes the kinds of caregiver-child behaviors and interactions directly related to later progress in social, STEM and literacy skills. Aside from these learning outcomes, we also must build on what we know about the benefits of public space investments to better understand how PLL installations can help improve the public realm, provide new opportunities for social interaction, and contribute to community cohesion (Box 1).
To advance this knowledge, Brookings and its partners have developed a framework and an initial set of indicators from both learning science and placemaking perspectives to define success criteria. Our “Playful Learning Landscapes metrics framework” will help evaluate the impact of pilot projects and guide iteration, scaling, and adaptation of PLL to future sites.
Box 1. Community engagement is critical for fostering PLL outcomes
The PLL metrics framework focuses on potential outcomes of playful learning spaces in the public realm. Philadelphia, Chicago, Santa Ana and other cities demonstrate that co-designing PLL prototypes with the community is required to reach these outcomes. For example, researchers worked closely with community members in Philadelphia to design and place the installations in Urban Thinkscape. Researchers also recruited and trained neighborhood members to be data collectors in response to requests from community members for more employment opportunities for neighborhood residents, and more ways to be involved in—and have greater ownership of—the process. In Santa Ana, researchers worked with mothers in the community to co-design signage that promotes caregiver-child interactions in the supermarket. Signs in the produce section with questions like, “How do you find the best fruit or vegetable?” and “What senses do you use to find the best one?” reflect stories that the mothers told about passed-down techniques for picking a ripe avocado or papaya. These signs promote sharing cultural traditions passed down from one generation to the next and encourage children to make observations and test hypotheses—both important skills for learning science later.
Playful Learning Landscapes metrics framework
Our work to create a PLL metrics framework began with a landscape analysis to survey existing frameworks and tools around measurement and evaluation of playful learning in cities. To create goals and metrics from the child development perspective, we turned to the rich and growing body of research that demonstrates PLL increases caregivers’ attitudes about the connection between play and learning, promotes the kinds of caregiver-child communication that support relationship building and language learning, and encourages talk about numbers, letters, and spatial relations.
In addition, three placemaking and urban design frameworks inspired and helped shape our approach and selected metrics.
The Place Diagram (Project for Public Spaces (PPS)): Through their work evaluating public spaces across the world, PPS identified four qualities of successful public spaces: (1) The spaces are accessible; (2) people engage in a range of activities there; (3) the space has a positive image and is comfortable; and (4) it is sociable and welcoming. The framework also prompts the user to ask key questions in assessing each of the qualities. For example, asking “Do sidewalks lead to and from the adjacent areas?” or “Does the space function for people with special needs” to address accessibility.
KaBOOM! Play Everywhere: Understanding Impact (Gehl): To examine the impact of KaBOOM!’s Play Everywhere initiative—implemented across 50 U.S. cities—Gehl used a multimethod approach including on-site observations, interviews with stakeholders, and intercept and neighborhood surveys to understand who visits the sites, what they do when visiting, and how they feel about the sites. Through this work, Gehl identified four key components of a successful Play Everywhere project: (1) proximity to existing kid “hubs” (where families live and spend time); (2) incorporation of kids’ perspectives into the design and implementation process early and often; (3) prioritization of interactive designs that spark curiosity and imagination; and (4) messaging that it’s okay to play in many different spaces (e.g., at the bus stop or on the sidewalk).
Measuring the Civic Commons (Reimagining the Civic Commons): Reimagining the Civic Commons designed a measurement system to examine the impact of investments in public spaces and the surrounding communities towards four key goals: civic engagement, socioeconomic mixing, environmental sustainability, and value creation. Within each goal are “signals”—indicators associated with a project’s objectives, and each of those signals has a set of metrics designed to understand changes such as average hourly visitorship of the site, number of trees in civic commons sites, and percent of respondents who say they feel safe in the neighborhood.
While the resources described above were all instrumental in shaping the development of our metrics framework, we adopted the approach of mapping metrics to signals and the signals in turn to goals (inspired by the Measuring the Civic Commons framework) because it allowed us to integrate both the child development and placemaking perspectives of PLL into one framework (Box 2). Our metrics framework has the following five goals:
Promote healthy child development and learning: Sparks playful and meaningful experiences that support child-caregiver interactions known to promote cognitive and social-emotional learning and positive development.
Support an accessible and welcoming public realm: Offers a physical space that is easy and convenient to access, feels safe and inviting to visitors, and reflects community cultures and values.
Foster a vibrant and inclusive social environment: Cultivates an engaging public realm that promotes social interaction among children and adults of all incomes and backgrounds.
Nurture civic engagement and strong sense of community: Builds neighborhood pride and community cohesion through the cocreation and ongoing oversight of PLL sites.
Strengthen the economic health and resiliency of neighborhoods: Has a positive impact on the surrounding community, including local businesses, property owners, and residents.
Box 2. PLL metrics framework at a glance
Note: The full framework can be found here.
Challenges and next steps
The “Playful Learning Landscapes metrics framework” is a key step toward generating data that are critical for scaling by helping to define the desired outcomes of playful learning in public and shared spaces, and importantly, how they are measured. But measuring the impact of public spaces isn’t easy—getting the metrics “right” is likely to be an ongoing effort, and data collection itself is often messy and time intensive. Our framework employs a range of qualitative methods including observation, intercept, and neighborhood surveys, each of which can be difficult to design and employ, especially in communities where trust in local government is low and residents may be wary of interacting with outsiders.
As the PLL movement gains momentum, generating evidence to demonstrate its impact will be key to strengthening the field and shifting mindsets among key stakeholders and city-level decisionmakers to weave playful learning into the fabric of city policies.
In the next phase of work, Brookings—together with its partners—will pilot the PLL metrics framework to explore research questions such as:
Are changes in caregiver and/or child attitudes and behaviors toward play and learning sustained after the initial exposure to PLL installations? In the future, we will want to measure the possible child development and learning effects that are prompted after visiting a PLL site (for example, at home or in other environments).
Do multiple PLL installations in the same neighborhood lead to broad-based impacts at various geographic scales? The current framework focuses on outcomes at the individual site level. As more installations are built across cities in the U.S. and globally, we hypothesize that PLL will yield more expansive neighborhood and community outcomes. Data from The Ultimate Block Party—the first PLL pilot—suggest that caregivers’ attitudes about the play-learning connection can be shaped in a community setting. These broader outcomes will be important to measure as a step toward sustainable uptake of PLL approaches.
What are the most effective methods for collecting data to maximize the quality of feedback? As described in Box 1, engaging community members to collect data can help in increasing response rates and improving the quality of feedback, but collecting survey data at PLL pilot sites will be challenging.
As the PLL movement gains momentum, generating evidence to demonstrate its impact will be key to strengthening the field and shifting mindsets among key stakeholders and city-level decisionmakers to weave playful learning into the fabric of city policies. The PLL metrics framework provides a roadmap to collect data that demonstrates PLL’s tremendous potential to narrow opportunity gaps while creating more livable and playful cities. The framework will continue to evolve as we learn from communities that are testing the expansion and adaptation of PLL on a neighborhood- and/or city-wide level. Rather than an end point, the framework provides a starting point for thinking about PLL’s goals and how to understand—and communicate—if and how sites are achieving them. This important work is just beginning.
( 16 mins) In November, at the COP26 U.N. Climate Change Conference, the U.S. will join the community of nations keeping alive the promise to meet the agreed target to limit global temperature rise to 1.5 degrees Celsius compared to preindustrial levels. The Biden administration will continue to work to reestablish U.S. leadership and increase global commitments for tackling climate change amid lingering skepticism from other countries. Its strategy for achieving its own ambitious target goes beyond a narrow focus on mitigation to include other important dimensions such as quality jobs, public health, and environmental justice. This offers an opportunity to leverage the areas of intersection and synergy between the U.S. climate agenda and the Sustainable Development Goals (SDGs) to advance U.S. climate ambitions, both at home and abroad.
The US at COP26: The Importance of Rebuilding Credibility and Driving Ambition
President Biden has made climate change a key priority of his administration. He reversed President Trump’s withdrawal from the 2015 Paris Climate Accords on his first day in office, and hosted a global summit in April where he outlined a new, ambitious Nationally Determined Contribution (NDC) for the U.S.—a 50-52 percent reduction from 2005 levels of economywide net greenhouse gas pollution by 2030.
At the U.N.-sanctioned COP, nations come together as peers to present both individual and collective climate commitments and progress toward their targets. This year, advocates and markets will be closely watching areas such as the phasing out of coal, commitments regarding hard-to-abate industries such as cement and aviation, and increased financing. While President Biden hosted some of the largest countries at the April 2021 Summit, for the wider global community, U.S. participation in COP26 constitutes an important next step in its reentry to the fold.
The Biden administration has already built a formidable team and rolled out ambitious plans, led by first-ever White House National Climate Advisor Gina McCarthy to advance its priorities at home and Special Presidential Envoy for Climate John Kerry to rally the international community. The COP presents a major opportunity for the U.S. to reassert its leadership on the global stage. The administration will be eager to raise the collective global ambition, and it is likely to build on its April commitments with new initiatives. It may even roll out a climate action plan that demonstrates how the U.S. will meet its new domestic target.
Notwithstanding these ambitions, the U.S. is still working to rebuild credibility and trust on these issues. The administration will face skepticism about both its ability to advance its plans at home and the extent to which the U.S. will remain dependable beyond its term in office.
The US Climate Action Plan: More than Mitigation
The administration’s climate change agenda is also a core pillar of the president’s comprehensive Build Back Better plan. This policy agenda also seeks to respond to the inequalities unveiled during the COVID-19 pandemic and the racial reckoning unleashed by the murder of George Floyd. Informed by these objectives, its strategy to reach the newly ambitious target reflects an integrated approach, one that accelerates mitigation of greenhouse gases to achieve the 50 percent reduction by 2030 while also spurring an economic transformation that results in a fairer, healthier, and more just economy.
President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad (EO 14008) clearly lays out this integrated approach. Published just a week after taking office, it establishes a governmentwide National Climate Task Force comprised of Cabinet secretaries, with a mandate to “facilitate planning and implementation of key Federal actions to reduce climate pollution; increase resilience to the impacts of climate change; protect public health; conserve our lands, waters, oceans, and biodiversity; deliver environmental justice; and spur well-paying union jobs and economic growth.”
The SDGs: A Potential Force Multiplier
Such an integrated strategy mirrors the interdependent objectives reflected in the SDGs, to which the U.S. and all other U.N. member states agreed in 2015. A central component of the SDGs is that they are universal, meaning they apply domestically to all countries regardless of income level.
While the Biden administration has taken some steps to position its international development investments through the U.S. Agency for International Development (USAID), the State Department, Millennium Challenge Corporation (MCC), and the U.S. International Development Finance Corporation (DFC) within the context of the SDGs, it has not yet signaled an embrace of the SDGs related to its domestic agenda. Yet the harmony between the U.S. climate plan and the SDGs provides the administration with an additional entry point to rebuild U.S. credibility and generate additional political momentum for its ambitious and comprehensive climate agenda at COP26.
Similar to the administration’s climate agenda, the SDGs provide a ready-made framework that connects the dots between health, jobs, resilience, and justice. It also importantly helps to set targets for assessing progress and ensuring accountability. Action on climate change has its own goal (SDG 13) and, amid today’s changing environment, stands as an essential requirement for successful sustainable development. This framework for accountability is already recognized and being used around the world, including in specific cities and sectors in the United States.
Given that the SDGs represent a collective global effort, with an imperative for every country to make progress on human, economic, and environmental targets simultaneously, drawing connections between the U.S. climate plan and the SDGs could provide another concrete example of the administration’s seriousness about reentering and respecting multilateral alliances—and stake out a potential leadership position with humility, as it acknowledges the progress necessary within our own borders.
Specific Synergies between US Climate Actions and the SDGs
A key emphasis of the SDGs is to “leave no one behind,” ensuring that governments focus their policy attention on those who have been most marginalized or are most vulnerable. The president’s executive order quickly establishes this as a clear priority for its proposed actions on climate change.
Economic opportunities and new jobs (SDG 8) stemming from a sustainable economy and the economic recovery must benefit left-behind communities—“places that have suffered as a result of economic shifts and places that have suffered the most from persistent pollution, including low-income rural and urban communities, communities of color, and Native communities.” It also calls for greater job opportunities for women (SDG 5). This commitment is reinforced by multiple Build Back Better proposals under negotiation in the budget reconciliation process.
The executive order also strongly emphasizes the importance of advancing environmental justice. It establishes a White House Environmental Justice Interagency Council (WHEJAC) and calls for the creation of an environmental justice scorecard for federal agencies and initiatives. Its mandate of an Office of Climate Change and Health Equity and an interagency working group focused on reducing the risk of climate to vulnerable groups further advances this priority.
At the center of this effort, the Justice40 Initiative aims to ensure that 40 percent of the overall benefits from federal investments in climate and clean energy flow to disadvantaged communities. It also calls for a new Climate and Economic Justice Screening Tool to provide further guidance to federal departments and agencies.
These actions directly link to SDG targets related to public health, clean air, clean water, access to green space, gender equity, racial equity, and reductions in inequality. Presumably, both a scorecard and screening tool for environmental justice will depend upon disaggregation of demographic and geographic data, replicating the type of targets, indicators, and evidence base inherent in the SDGs. For example, Justice40 directly reflects the spirit of SDG target 10.1, which calls for progressively achieving sustained income growth of the bottom 40 percent of the population at a rate higher than the national average.
The transition toward a sustainable economy will involve upgrading infrastructure, investing in clean energy, and supporting bold U.S. leadership on innovation while uplifting impacted mining and power plant communities. These objectives tie to targets under SDG 9 (Industry, Innovation, Infrastructure), including target 9.4 (upgrade infrastructure and retrofit industries to make them sustainable). The Investment in Coal and Power Plant Communities plan aims to support small, medium, and rural manufacturers in the transition, to increase access to capital for domestic manufacturers, to guarantee union and bargaining rights for public service workers (PRO Act), and to ensure domestic workers receive the legal benefits and protections they deserve.
The administration seeks to produce clean and affordable energy that generates opportunities for job creation. The Initiative for Better Energy, Emissions, and Equity (E3) includes $30 million investment in the American workforce through technical assistance and funding awards by the Department of Energy (DOE), with the aim to save $750 per year in energy bills for nearly 12 million American households, and create nearly 700,000 quality jobs in every region in the country through the Clean Energy Accelerator. By aiming at energy efficiency and universal affordable access to clean, efficient energy, the initiative could be measured through the indicators of SDG 7 (Affordable & Clean Energy), including targets 7.1 (ensure universal access to affordable, reliable, and modern energy services) and 7.2 (increase substantially the share of renewable energy in the global energy mix).
Beyond the Federal Government: Leveraging US Multistakeholder Leadership
The Biden administration would not be starting from a blank slate in more intentionally fusing the SDG and climate agendas domestically. Many U.S. cities, states, and corporations are already in the vanguard of combining climate action and the SDGs. City governments across the U.S. have begun to use the SDGs as an evidence-based framework for measuring progress and fostering policy coherence among different offices and levels of governance. They also embrace the SDGs as a valuable policy framework that is helping to mobilize progress on climate goals, integrating those ambitions with critical targets on inclusion, equity, and sustainability. Cities such as New York City, Los Angeles, Orlando, Pittsburgh, and Phoenix—leaders in the climate and environmental agenda—have pioneered approaches to adapting the SDGs to their local realities.
Over the past five years, U.S. local leadership has also had a decidedly global flavor. Through city-to-city cooperation, networks, and policy exchanges globally, U.S. cities and states are pushing ambition and policy among their counterparts across the world. They have established their leadership in networks such as C40 Cities (chaired last year by Mayor Eric Garcetti of Los Angeles), ICLEI, the U.S. Climate Alliance, the Urban 20 (an affiliate of the G-20), the Local2030 Islands Network, and the Brookings SDG Leadership Cities network.
This activity helped maintain U.S. global leadership and cooperation during a notable federal absence. While the Trump administration pulled the U.S. out of the Paris Agreement, U.S. stakeholders remained committed, and many of them have become global examples of combined action on climate and sustainable development.
Hawaii helps host a Local 2030 Hub, providing leadership, facilitating peer exchange, and offering technical assistance with a network of small island developing states in the Pacific. New York City launched the first-ever Voluntary Local Review (VLR), an innovative report on local SDG progress that has emerged as a global movement, one so widespread that it was recognized by United Nations member states this year in the Ministerial Declaration of the High-Level Political Forum for the first time. Los Angeles initiated a local Green New Deal and committed to 100 percent renewables on its grid by 2025 while launching a network of cities dedicated to advancing gender equity. The Biden administration can benefit from the experience of these leaders in integrating the two agendas and leverage the stature that many have earned globally.
Stronger communication and interactions between the local and federal levels will also benefit the implementation of the administration’s domestic priorities. The effort to achieve 50 percent greenhouse gas reduction by 2030 will necessitate a shared vision, alignment, and support among local, state, and national actors, as many of the policies and goals designed at the federal level will rely upon execution by local leaders. From land use decisions to infrastructure and shifts in policies and investments, execution to reach emission targets has a decidedly local flavor. The SDGs provide the platform that can enable local leaders to take on climate while meeting other concerns of their constituents, and provide a common language for local governments to cooperate with the national government as well as coordinate across the vast array of local jurisdictions.
To be successful domestically, the federal government will need to scale up local success and facilitate transfers of knowledge to lower the costs of a fair and equitable energy transition. Building holistic sustainable development plans locally requires practices such as decarbonization, energy transition, geo-explicit approaches, and data monitoring, which require staff, skills, and resources. Federal leadership could help scale up local action and successes by lowering the transaction costs of that exercise, using the SDGs as a universal toolbox so it doesn’t have to be done from scratch.
There are several recommendations that the Biden-Harris administration could embrace in both the short and long term:
1. Explicitly leverage and showcase local leadership and domestic SDG-climate models and innovations at COP26.
This could be done by including local leaders at planned events and forthcoming announcements and partnerships, and even including them on the official United States delegation. Ensuring partnership and regular, open communication between these stakeholders and the U.S. government delegation during the COP proceedings can help jointly reinforce mutually beneficial agendas. Finding ways at COP26 to lift up U.S. local leadership could be a powerful motivator for building additional global partnerships and ambition, and this approach has the added benefit of showcasing U.S. actions that are not beholden to current Congressional budget negotiations or the politics of federal elections. Another opportunity is showcasing the existing and multistakeholder political leadership and innovations already taking place at the local level, through mayors, governors, corporate leaders, and universities. It would demonstrate the global leadership of all segments of American society—after all, it is not just nation-states that will solve climate change.
2. Map and align any U.S. climate action plan to the SDGs.
Doing so would draw attention in the global community and is likely to be perceived as a signal of support for global cooperation that could enable increased international momentum for the U.S. climate agenda. It would also help integrate the interagency process domestically. The National Security Council (NSC) can take advantage of the interagency processes, particularly on Build Back Better, COP26, and climate finance, as an opportunity for using the SDGs to describe how U.S. climate commitments can lead to better economic and social outcomes. This would provide a powerful narrative to bolster its international leadership and engagements at COP26, pushing to accelerate the economic and other transitions needed to reach the targets laid out in the Paris Agreement, especially as many governments are grappling with making progress on climate change at the same time as achieving an equitable economic recovery from COVID-19.
3. Elevate the SDG-climate nexus in specific domestic initiatives, starting with Justice40.
Identifying specific pilot initiatives that advance climate action and the SDGs, including around measurements of equity and prosperity, would send an important signal that the Biden administration is committed to supporting action-oriented efforts in local communities. As Justice40 develops its approach, tools, and scorecards, it could act as a pilot by mapping to key SDG targets and disaggregating data by racial and other demographics to develop the evidence base and measure progress on justice and equity considerations. This initiative so clearly combines social and economic considerations with the administration’s climate ambitions, it provides a ready-made opportunity to explore and exploit the intersections between the two agendas. The increased accountability through the use of SDG data and targets would also provide additional basis for building trust with communities skeptical of these commitments, and could help institutionalize climate justice efforts beyond election cycles. It could also create a through-line for upcoming events on the political calendar that are priorities for the Biden Administration, moving from COP26 to the Summit for Democracy, for example.
4. Identify and develop processes and channels to align federal and local actions within the SDG-climate nexus.
Creating more regular and sustained policy channels among local, state, and national leaders would enable efficient local execution on the policy ambitions set forward by the U.S. national strategy and help identify best practices and innovations. Given the priority that local leaders are already giving to social and economic considerations, an alignment between climate action and the SDGs would be welcomed at the local level. This would also pay dividends in better connecting influential local leadership to diplomacy being done in global networks. Several coalitions could be leveraged, such as the U.S. Climate Alliance and WWF’s America is All In.
5. Announce an intention to conduct a U.S. Voluntary National Review (VNR) on the SDGs, to take advantage of the multiplier effect for U.S. commitments on equitable climate action both domestically and globally, and recognize the domestic applicability of the SDGs.
This offers additional reinforcement to the administration’s drive to build credibility and momentum for its global climate leadership. The United States is the only G-7 and G-20 country not to have submitted a VNR (nearly 170 countries have presented VNRs since 2016). A U.S. commitment to a VNR could create global momentum and attention that will add to its new commitments on climate action, connect its domestic action to its global leadership and investments, and provide another entry point for U.S. reengagement in the global multilateral community. Undertaking a VNR would also offer a “unified, measurable vision” that connects to the global development priorities that the U.S. government invests in and implements internationally through USAID, MCC, DFC, and the State Department.
The above ideas and recommendations would send important signals to domestic and foreign policy audiences that the Biden administration is committed to and is implementing policies and practices that ensure a more just, sustainable, and equitable recovery from the pandemic. Since the administration has not yet signaled its approach to the SDGs domestically, these ideas could also provide momentum for what it might do on the SDG framework in the United States as well. The Office of the Climate Advisor and the National Climate Task Force ought to have a major role as the administration determines its commitment to the SDGs overall. So too should regular channels of communication, learning, and policy exchange be established among the growing cohort of diverse American leaders committed to climate action and the SDGs that cities, states, corporations and investors, philanthropy, universities, and civil society are already carrying forward.
The COVID-19 pandemic, a quickly warming planet, and the murder of George Floyd have demonstrated just how connected these issues are to one another, blurring the lines and important connections between domestic and global leadership from the U.S. The SDGs provide an important vehicle for the Biden administration to rebuild credibility at home and abroad and to implement a comprehensive climate action agenda rooted in equity and sustainability.
( 2 mins) What is the best way to assess a nation’s prosperity, not just today but into the future? Growing concerns about climate change, rising inequality, unsustainable resource use, and destruction of nature highlight the need for new economic tools to ensure development is sustainable, resilient, and inclusive. Gross domestic product (GDP), the conventional measure of economic progress, overlooks many vital aspects of nature, sustainability and human development. Wealth accounting offers a powerful way to look ‘beyond GDP’ for a more comprehensive view of the sustainability of growth. As a leader in this field, the World Bank’s Changing Wealth of Nations 2021 report provides an updated database and rich analysis of the world’s wealth accounts spanning 146 countries from 1995 to 2018. It contains the widest set of assets covered so far, including the value of human capital broken down by gender, as well as many different forms of natural capital, including forests, cropland, mangroves, marine fisheries minerals, and fossil fuels.
How can wealth accounting improve our understanding of economic sustainability? Can it help countries address the challenges posed by climate change and the low-carbon transition? Can wealth accounting serve as a way for countries to move ‘beyond GDP’?
On October 28, the Global Economy and Development program at Brookings and the World Bank will co-host a panel of leading experts on these issues. The discussion will be moderated by author and Financial Times Africa Editor David Pilling. Panelists will discuss the implications of new measurement approaches and the limits of GDP for encouraging sustainable development.
Viewers can submit questions via email to [email protected] or on Twitter using #CWON2021.