IAOS 2018 - Identifying accelerators of sustainable development in Poland, P. Arak, D. Olko, W. Sabat

16th Conference of IAOS, Paris 19-21 September 2018
Deloitte Poland, Energy, Sustainability and Economics Team
Identifying accelerators of sustainable development in Poland
Piotr Arak, Damian Olko, Wojciech Sabat

Copyright © 2016 Deloitte Development LLC. All rights reserved. 2
© Deloitte Polska
Introduction

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The aim of the study & our contribution
The aim of this study was to identify
areas of public policy – accelerators
– that have the greatest potential to
maximise the chances of delivering
Agenda 2030 in Poland
Our analysis is based on the expert
opinion delivered by Deloitte for
Polish government in January 2018
(former Ministry of Development)

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The aim of the study & our contribution
Comprehensive and robust empirical studies on Sustainable Development
are still rare.
We developed a formal and universal empirical methodology for
identifying accelerators of Sustainable Development.
We applied the methodology for the case of Poland, providing initial
strategic directions for public policies.
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Literature review

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Agenda 2030 & SDG’s as a framework for public policies
Agenda 2030 is a broad and inclusive map of ideas, a vision formulated through international dialogue.
Effective translation of SDG content into objectives, areas and activities that can be the basis for public
policies is a prerequisite for accelerating the implementation of the Agenda 2030

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Agenda 2030 & SDG’s as a framework for public policies
Main issues:
Imprecise formulations. Out of 169 Targets, only 29% might be assessed as precise and
clear, 54% could be reshaped and 17% need fundamental reformulation (ICSU, 2015)
Data scarcity and imperfect indicators. In some areas there is still scarcity of empirical
data to measure countries’ achievements in pursuing SDGs targets (OECD, 2017). Overall,
its empirical study on countries’ progress towards SDGs used indicators for only 57% of
targets, with considerable differences in data availability between various goals.
Design distorted by various political agendas. SDGs framework was not constructed in
a way which was based on assumptions or ex ante assessments of potential causal relations
and interlinkages between SDGs. Researches from ICSU (2017) using theoretical analysis
detected 316 interactions on a Target level, of which 238 are positive, 66 negative and 12
are neutral, but no conflicting SDGs were identified.

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Labour productivity and labour supply
Only 26% of workers is produces half of the GDP, while in countries
such as Germany or Demark it is approximately 40% of workers
Unattractive equilibrium in production type
Poland might face an „unattractive equilibirum” of low wages and
low technology in production structure in comparison with most
advanced economies („middle income trap”)
Low business sector’s investment rate
Business’ investment rate in Poland is significantly lower than in the
region –11,2% vs 16,2% of GDP (average for 2000-2015 period).
After 2015 investment rate fell further
Inefficient agriculture
On average, Polish farmers use two times more labour per area unit
than EU average. In southern regions many farms are too small to
efficiently supply the market
Rapidly ageing population
Pace of ageing is one of the fastest in the world. However, large part
of workers (especially women) exit labour market before reaching
age of 60
Air pollution and low waste recycling
33 out of 50 European cities with most polluted air are located in
Poland. The level of municipal waste recycling in Poland is still
significantly lower than the EU average – 34,8% vs 45,3%
Literature review: Poland’s development challenges

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Analytical approach

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Definition of the accelerators
Accelerators of SDGs are different areas of public policies, where dedicated measures, expenditures
or programmes can trigger a positive net effect in one or more SDGs, without compromising other
Specifically, to accelerators might be attributed specific inputs like public expenditures on
particular goals, structural reforms that increase efficiency of public policies or market process
In general, the concept works as follows:
Specific input or impulse occurs in a socio-economic
or environmental reality and leads to improvement in
some area(s) linked to one or more SDGs
If impact of this shock is positive, relevant and
material and does not create trade-offs, then area
impacted by initial input is called the accelerator

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General assumptions
SDGs lack theoretical foundations and orderliness (including explicit causal relations) that is
prerequisite to serve as a ready, stand-alone framework for public policies
In order to deliver objective and nonpartisan results for potential application in a public policy
context, our analytical approach is as much empirical (atheoretical) as possible
In order to reduce subjectivity or any bias in choosing set of variables, we followed SDGs
mapping done by Eurostat, while other sources were secondary.
The key element of our empirical approach is employment of Exploratory Factor Analysis (EFA)
and Vector Error Correction Model (VECM).

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Empirical strategy
Exploratory
Factor Analysis
Data transformation
and statistical tests
Estimation and identification of
Vector Error Correction Models
Interpretation
of results and
identification
of Accelerators
Data collection,
review and clearing

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Statistical data
Main issues & solutions:
Low availability of time-series for the full period between 1990–2015 (longer
are not available or not comparable due to reality of centrally planned economy
that existed in Poland until 1989)
Being economy in transition, Poland underwent major structural changes in
economic, social and environmental domains.
Because of these drawbacks, we excluded variables for which we had less
than 10 observations for the years 2000-2015.
In order to validate our results, data for Czech Republic (as a proxy
transition and post-transition economy) was gathered for corresponding final
list of variables used in VECM estimations.
In total, 193 variables were initally considered. We created a so-called
long list of variables for 17 SDGs areas, with division into input and output
variables in relevant areas.

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Results

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As a result of the econometric analysis, the accelerators
of sustainable development in Poland were indicated in
5 areas and matched to the 5 SDGs
SDG 2
Organic farming
and agricultural
R&D
Identified Accelerators
SDG 3
Expenditures on
health services
SDG 7
Energy efficiency
and renewable
energy
SDG 12
Resource and energy
efficiency
SDG 17
Trade with developing
countries

© Deloitte Polska
Particularly, our estimation shows that following inputs or structural
changes have the largest potential to speed up progress in delivering
Agenda 2030:
Final energy consumption
in households per person
Organic farming area
Government support for agricultural
research and development
Public expenditures
on health protection
Number of nurses
per 1000 inhabitants
Share of energy from renewable sources
in final gross energy consumption
Energy efficiency
Primary energy consumption
Share of environmental and
employee taxes in total tax revenues
Resource efficiency and
national material consumption

© Deloitte Polska
Summary of identified and validated accelerators of sustainable
development in Poland
SDG DG 2 Zero Hunger
DG Good Health and
Well-being
DG Affordable and
Clean Energy
DG Responsible
Consumption
and Production
Partnerships to
achieve the Goal
Accelerators – areas
for public policies
Organic farming and
agricultural R&D
Expenditures on health
services
Energy efficiency and
renewable energy
Resource and energy
efficiency
Trade with developing
countries
Input (shock)
variables
Organic farming area
Government support for
agricultural research
and development
Public expenditures on
health protection
Number of nurses per
1000 inhabitants
Energy efficiency
Share of energy from
renewable sources in
final gross energy
consumption
Primary energy
consumption
Resource efficiency and
national material
consumption
Final energy
consumption in
households per person
Share of environmental
and employee taxes in
total tax revenues
Output (effect)
variables
Income from
agricultural factors per
annual unit of work
Life expectancy at birth
Self-assessment of
health status
Primary energy
consumption
Intensity of greenhouse
gas emissions in energy
consumption
Share of energy from
renewable sources in
final gross energy
consumption
Average CO2 emissions
per km from new
passenger cars
Imports into the
country from
developing countries

© Deloitte Polska
Our results are consistent with those obtained by Spaiser
et al (2017) who demonstrated empirically that health
programmes, government spending and renewable energy
can contribute both to socio-economic development and
ecological sustainability without creating trade-offs
Theoretical analysis by ICSU (2017) concluded that SDG 2,
SDG 3, SDG 7 and SDG 14 have the strongest synergies with
other SDGs, which also strongly supports our results.
Our results against compared with the novel literature

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In some areas that are typically
regarded as potential
“development levers” or are
currently subject to growing concern
among policymakers (like
inequalities), but where no
accelerators were detected or the
evidence was ambiguous.
Important areas without identified accelerators

© Deloitte Polska
Comparison of current position of Poland in realisation of SDGs and
identified accelerators
SDGs – current position of Poland in 1-3 scale Accelerators matched to SDGs
1 SDG 17: Partnerships to achieve the Goal Trade with developing countries
1+ SDG 7: Affordable and Clean Energy
Energy efficiency and renewable
Energy
2 SDG 1: No Poverty
SDG 2: Zero Hunger
SDG 8: Decent Work and
Economic Growth
SDG 15: Life on Land
SDG 10: Reduced Inequality
SDG 14: Life Below Water
SDG 9: Industry, Innovation
and Infrastructure
Organic farming and agricultural
R&D
2+ SDG 3: Good Health and
Well-being
SDG 4: Quality Education
SDG 6: Clean Water and
Sanitation
SDG 11: Sustainable Cities
and Communities
SDG 13: Climate Action
SDG 16: Peace and Justice Strong
Institutions
Expenditures on health services
3 SDG 5: Gender Equality SDG 12: Responsible
Consumption and Production
Resource and energy efficiency

© Deloitte Polska
Detected accelerators within this study might boost
sustainable development related to matters in which
Poland is not currently succedding (like global partnership
or clean energy).
But this is not the whole picture, as accelerators were found
also for those aspects where country’s current
performance is better than international average (for
instance, responsible consumption and production)
General conclusions

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Need for further research
Next assessment will take advantage of longer time-series and, possibly, more reliable set of indicators
Linking detected accelerators
with current advancement
in realization of Agenda 2030
offers solid ground for
preliminary strategic
recommendations, both
for the government, business
sector and other relevant
groups of stakeholders
Although necessary, this is
just the first step towards
better understanding of
challenges, planning
measures and executing
right public policies for
delivering SDGs in Poland
It is clear that this multi-
faceted process requires
further studies on
subjects that are beyond
the scope and goal of this
assessment
We believe also that similar
analysis to this one should
be replicated in the near
future, preferably at the
government level

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Thank you for attention
Damian Olko
Economist, Senior Consultant
at Deloitte Poland
e-mail: dolko@deloittece.com
Piotr Arak
Deputy Head
of Polish Economic Institute
e-mail: piotr.arak@ibrkk.pl
Wojciech Sabat
Economist, Cooperating Expert
at Deloitte Poland
e-mail: wsabat@gmail.com

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