Country Preparedness for the Transition to Net Zero

This indicator assesses countries’ transition risk through a complex index that incorporates 25 sub-indicators that monitor institutional performance (e.g., absence of political violence and terrorism, governmental effectiveness), economic situation (e.g.: macroeconomic stability, availability of finance for the transition, GNI per capita), societal (e.g.: proportion of wage income earned in highly exposed sectors, human capital), and technological factors (e.g., technology absorption, carbon intensity of manufacturing), weighted to derive a final preparedness score ranging from 0 and 1.

The indicator in its current form does not reflect opportunities arising from the low-carbon transition, particularly those emerging from access to non-renewable resources vital to the transition, such as critical minerals. It also overlooks different aspects of access to renewable energy sources such as security, reliability, and flexibility. This omission is primarily attributed to the lack of reliable data.