Sustainable Growth Pillar within the Europe 2020 Index. A Sector level's Decomposition

Abstract

This work deals with different sectors’ performances towards achieving the Sustainable growth pillar’s objectives from the Europe 2020 strategy. First, we determine the objectives at the sectoral level according to the country-level set objectives. Then we define a composite index for the whole Sustainable growth pillar and finally propose a decomposition of that composite index. This decomposition provides important insight, by differentiating between three different components of the Sustainable growth pillar: sector-, group-, and objective-specific indexes. The decomposition, therefore, allows for a better understanding of the realisation of the set objectives at the sectoral level, since the composite index alone leads to confusion about all plausible reasons explaining the given outcome. Applying the methodology to 8 sectors within the 27 European Union countries for the period 2004-2018, we found that while performances have increased over time, compelling efforts are still required to achieve the Europe 2020 Sustainable growth pillar objectives, especially the Energy efficiency and the Renewable energy share targets, as portrayed by the objective-specific index results. The decomposition allows us to emphasise the important patterns and challenges for each sector at the three levels.