Greening the structural change process: ranking sustainability of countries in climate change

This paper proposes an analytical toolkit to measure the sustainability of industrialization across countries. Drawing from a methodology developed to analyze economic development as a process of modernization, it ranks countries on the basis of the emissions they produce and their stage of development. The proposed index penalizes environmental pressures taking into account the modernization level of a country. The paper also proposes an assessment of the environmental performance of countries at the same level of modernization. It introduces the notion of policy space as the difference between the best and worst environmental performer at a given level of modernization. An important finding of the paper is that the magnitude of the policy space is not homogenous across different levels of income and environmental targets.