Chapter 2. A new framework for policy coherence for sustainable development

Transitioning from the Millennium Development Goals (MDGs) to a universal sustainable development framework calls for updating current approaches to promote policy coherence for development (PCD), and making sure that existing institutional mechanisms are “fit for purpose” for the implementation of the Sustainable Development Goals (SDGs). The “PCSD Framework” introduces the concept of Policy Coherence for Sustainable Development (PCSD) and provides guidance on how to analyse, apply and track progress on PCSD. It aims to support any government – both from OECD members and partner countries – interested in adapting its institutional mechanisms, processes and practices for policy coherence to implement the SDGs. The PCSD Framework is flexible and adaptable to diverse national and institutional contexts and allows users to develop their own strategy for enhancing policy coherence. It forms part of the OECD’s strategic response to the SDGs.

  

Introduction

2015 marked a major shift in international development. As the Millennium Development Goals (MDGs) have reached their target date, a new global agenda was adopted in September 2015 by the 193 Member States of the United Nations to complete the unfinished business, eradicate poverty by 2030, and steer a transformational shift towards sustainable development for all. The vision of “Transforming Our World: the 2030 Agenda for Sustainable Development” differs from that of the MDGs in fundamental ways. It represents a more ambitious agenda that puts emphasis on well-being, prosperity and sustainability in all countries for all people of this generation and those to come. The new agenda entails:

  • moving from goals applied largely to low income developing countries towards universal goals applicable to all countries regardless of their level of development

  • shifting from a focus on the symptoms to addressing also the underlying causes of economic, social, environmental and governance challenges

  • involving a wider set of actors including ministries, parliaments, local authorities, private sector and civil society in delivering the goals at the national, local, regional and international levels

  • strengthening data, monitoring and review processes to inform policy-making and enhance accountability.

The Sustainable Development Goals (SDGs), which form the core of the new agenda, are an indivisible set of global priorities that incorporate economic, social and environmental aspects and recognise their inter-linkages in achieving sustainable development. The implementation of an integrated set of 17 SDGs (Box 2.1) and 169 associated targets requires whole-of-government approaches, strengthened coordination, enhanced policy coherence, as well as a more effective mobilisation, use and allocation of all available resources – public, private, domestic and international.

Box 2.1. Sustainable Development Goals
  1. End poverty in all its forms everywhere.

  2. End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.

  3. Ensure healthy lives and promote well-being for all at all ages.

  4. Ensure inclusive and equitable quality education and promote life-long learning opportunities for all.

  5. Achieve gender equality and empower all women and girls.

  6. Ensure availability and sustainable management of water and sanitation for all.

  7. Ensure access to affordable, reliable, sustainable, and modern energy for all.

  8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

  9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.

  10. Reduce inequality within and among countries.

  11. Make cities and human settlements inclusive, safe, resilient and sustainable.

  12. Ensure sustainable consumption and production patterns.

  13. Take urgent action to combat climate change and its impacts.

  14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development.

  15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

  16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

  17. Strengthen the means of implementation and revitalize the global partnership for sustainable development.

Source: UNGA (2015).

The 2030 Agenda for Sustainable Development calls upon all countries to “enhance policy coherence for sustainable development” (SDG target 17.14) as an integral part of the means of implementation. The global indicator proposed by the Inter-Agency and Expert Group on Sustainable Development Goal Indicators (IAEG-SDGs) to track progress on Target 17.14 aims to capture the “Number of countries with mechanisms in place to enhance policy coherence for sustainable development” (PCSD). Policy coherence is critical to capitalise on synergies among SDGs and targets, between different sectoral policies, and between diverse actions at the local, regional, national and international levels. PCSD is fundamental to inform decision-making and manage potential trade-offs and tensions between policy objectives, such as: economic growth, human wellbeing, and environmental protection and natural resource preservation.

Transitioning from the MDGs to a universal sustainable development framework calls for updating current approaches to promote policy coherence for development (PCD), and making sure that existing institutional mechanisms are “fit for purpose” for the implementation of the SDGs. The PCSD Framework introduces the concept of Policy Coherence for Sustainable Development (PCSD) and provides guidance on how to analyse, apply and track progress on PCSD. It aims to support any government –both from OECD members and partner countries– interested in adapting its institutional mechanisms, processes and practices for policy coherence to implement the SDGs.

The PCSD Framework provides general guidance as well as a screening tool (checklist) to:

  1. conduct analysis to identify policy coherence issues, and improve understanding on the interactions among SDGs and targets and their implications, and how certain policy actions might support or hinder the achievement of the goals and targets (Analytical framework);

  2. align existing institutional mechanisms for policy coherence to the needs and vision of the 2030 Agenda for Sustainable Development (Institutional framework); and

  3. consider key elements for tracking progress on PCSD, with a view to support national efforts for monitoring and reporting progress on SDG Target 17.14 to “enhance policy coherence for sustainable development” (Monitoring framework).

The PCSD Framework is flexible and adaptable to diverse national and institutional contexts. It allows users to develop their own strategy for enhancing policy coherence by using only the sections that are relevant to their priorities, own institutional settings and governance processes, and practical capacities and needs.

The general guidance provided by the PCSD Framework is neither prescriptive nor binding. The sets of open-ended questions in each of the sections are designed to enable policy-makers – ministries, legislatures and offices of government leaders, development agencies and other key stakeholders – to screen policies, organisational structures as well as policy-making processes, and consider other contextual factors which can influence the achievement of sustainable development goals. They are also intended to help users examine their current institutional mechanisms and practices for promoting policy coherence, and determine what changes are needed, if any, to adapt and align their current institutional mechanisms to the vision of the 2030 Agenda for Sustainable Development.

The checklist is not a substitute for a review of the policy coherence system of a country. The screening tool can complement external assessment and peer review. The screening should be conducted by the existing governmental body responsible for policy coordination, arbitration and coherence. The OECD could potentially be tasked with carrying out the external assessment and peer review, and the dissemination of the results.

The PCSD Framework updates the “PCD toolkit” which was first developed in 2009-10 as well as its revised version published online in 2012 as an OECD-PCD Unit Working Paper “PCD Framework”. These previous versions were developed drawing on lessons learned and best practices collected by the OECD over several years of peer reviews, as well as on consultations with in-house experts and member countries. This new version seeks to transform the tool from a sectoral approach (e.g. agriculture, trade, environment, etc.) to one based on key challenges (e.g. global food security, illicit financial flows). This approach reflects better the vision of the 2030 Agenda for Sustainable Development. This new version has been discussed with PCD National Focal Points and is being developed based on the comments and feedback from the OECD secretariat, members, partners as well as relevant stakeholders.

The PCSD Framework is part of the OECD’s strategic response to the SDGs, notably the proposed action area to upgrade the OECD’s support for integrated planning and policy-making at the country level, and provide a space for governments to share experiences on governing for the SDGs. It responds to the call for updating PCSD tools and instruments to inform policy making and monitoring efforts. Members, partner countries and international organisations, as well as other stakeholders are invited to test the relevance and the practicality of the guidance and provide feedback to continuously improve this framework.

Table 2.1. PCSD screening tool: An integrated checklist of key elements to be considered

Main elements

Aspects addressed

1. ANALYTICAL FRAMEWORK

1.1. Actors

  • Which actors (countries, international organisations, as well as key stakeholders such as governmental, businesses and non-governmental decision-makers) have to be involved and influenced?

  • How can other countries and key stakeholders be better engaged in policy coherence efforts to support the implementation of SDGs?

  • What is the role of the private sector, civil society organisations, bilateral and multilateral donors, and other stakeholders?

  • Has the role of parliaments, subnational and local governments, and municipalities been considered?

  • Role of different actors and multi-stakeholder participation for enhancing PCSD

  • Involvement of partner countries

1.2. Policy inter-linkages

  • Have economic, social and environmental policy inter-linkages (synergies and trade-offs) been considered?

  • How do the planned policy outputs contribute to achieve sustainable development goals?

  • How does the actions to attain one SDG (e.g. food security) support or hinder progress in other SDGs (e.g. Water or Health)?

  • Are governmental organisations moving from sectoral perspectives (e.g. agriculture, trade, investment, water, energy) towards a more integrated decision-making processes and “issues-oriented” agenda (e.g. food security)?

  • Interactions between economic, social and environmental policies

  • Synergies and trade-offs

  • Integrated approaches

1.3. Enabling and disabling conditions (contextual factors)

  • Have the existence of enabling environments which affect positively policy outcomes been considered?

  • Have the contextual factors (corruption, barriers to trade, knowledge, etc.) which might influence the policy outcomes been identified? What efforts have been made to address these factors?

  • Enablers

  • Disablers

1.4. Sources of finance

  • Have all the potential sources of finance been identified (public, private, domestic, international) for sustainable development?

  • Are there specific mechanisms to avoid fragmentation of international, regional, and national funding instruments?

  • Have the enabling conditions and necessary incentives to ensure contributions from private sources been considered?

  • Complementarities among sources of finance

  • Integrated financing frameworks

1.5. Trans-boundary and intergenerational impacts

  • Does the policy produce unintended effects, positive or negative, that could affect the well-being of people living in other countries?

  • Which groups would be affected and how? How can the unintended negative effects be mitigated?

  • Have the potential direct or indirect long-term effects on well-being of future generations been identified?

  • Are the economic, social and environmental costs of policy decisions considered?

  • Policy effects

2. INSTITUTIONAL FRAMEWORK

Whole of Government approaches

2.1. Awareness and understanding of sustainable development, SDGs, and PCSD

  • Are the concepts of sustainable development, SDGs, and PCSD well understood by the public, governmental organisations and across levels of the government?

  • What efforts have been made to develop clear, widely accepted and operational objectives and principles for achieving the SDGs?

  • How do the SDGs inform policy-making?

  • Has the role of PCSD been considered for implementing the SDGs?

  • Awareness raising on the SDGs and PCSD

2.2. Political commitment

  • Is there a clear commitment at the highest political level to the implementation of SDGs and formulation of a national strategy?

  • Is there a political statement spelling out the government’s commitment to PCSD?

  • Is this commitment effectively communicated across levels of government?

  • Has it made a public commitment endorsed at the highest political level to integrate sustainable development into specific sectoral policies with clear links to the SDGs?

  • Has the government identified priority areas for PCSD and developed action plans?

  • Political statement on PCSD.

  • Sustainable development mainstreaming

2.3. Priority setting

  • Are the current Sustainable Development priorities of the government aligned to the vision of the SDGs?

  • Is policy coherence for sustainable development an element of the national strategy?

  • Is there involvement of the Centre of Government in the coordination of high level priorities for sustainable development and for achieving the SDGs across line ministries?

  • Are there specific mechanisms to ensure effective feedback between different levels of government?

  • Commitment towards the SDGs

  • Role of CoG

2.4. Multi-stakeholder involvement

  • What mechanisms are in place to involve and promote active participation of the government departments, parliamentarians, civil society, business and industry, academia, in the preparation of national strategies for achieving the SDGs?

  • How have other countries, international organisations and stakeholders been involved and helped inform the design of plans for enhancing PCSD?

  • Whole-of government/whole of society perspective

2.5. Strategic framework

  • Is the government aligning its national or sectoral strategies to the SDGs and setting whole-of-government plans for implementation at the domestic and international levels?

  • Is PCSD recognised in national strategies as an integral part of the means of implementation?

  • Have the roles and responsibilities for domestic and international implementation been specified?

  • National Strategies for SDG implementation

Policy coordination

2.6. Coordination mechanisms

  • Have formal mechanisms been established for inter-ministerial collaboration, coordination and policy arbitration on SD?

  • Do these mechanisms provide opportunities for informing ex ante on domestic policy making as well as on its interface with foreign policies?

  • Is it located strategically within the government organisational structure to promote coherence and resolve policy conflicts (e.g. at the level of the Prime Minister’s office)?

  • Is the budget process used to set priorities, reconcile policy objectives and promote policy integration?

  • Inter-ministerial collaboration

  • Role of CoG

2.7. Country specific SDG targets

  • Does the prioritised set of national targets acknowledge policy inter-linkages and cover the three dimensions of sustainable development?

  • Are the targets based upon the best available data, evidence?

  • Do the targets contribute to economic and social transformation as well as to preserve the natural asset base?

  • Clear governmental objectives.

2.8. Inter-linkages across governance levels

  • Has the government involved local stakeholders in the formulation and implementation of policies?

  • Is the national government supporting local authorities to increase or combine resources and capacities to formulate effective policy responses for sustainable development?

  • Are implementation responsibilities clearly divided among different levels of government, taking into account the distinct competences and comparative advantage of each level?

  • What mechanisms are in place to ensure coordination and joint action of agencies from different government levels involved in international initiatives?

  • Vertical coherence

2.9. Budget processes

  • Is the budget process used to align national priorities to the SDGs, reconcile sectoral objectives and foster policy integration?

  • What efforts are being made to re-structure the budgetary process to reflect the increasing cross-cutting nature of policy-making? Is sustainable development integrated into regular budget process?

  • In what ways are the policies and their associated resource allocations likely to reinforce each other for achieving sustainable development objectives?

  • How do policies and programmes reflect the priorities in the SDGs and Targets?

  • Mechanisms for reconciling policy priorities and integrating sustainable development

2.10. Administrative culture

  • What measures (management, performance incentives) are used to encourage collaboration and greater mobility of civil servants among ministries?

  • What mechanisms are in place to help increase the informal flow of information across ministries, institutions and sectors?

  • How sustained collaborative relationships are promoted among senior-level officials across the government?

3. MONITORING FRAMEWORK

3.1. Strengthening monitoring and reporting mechanisms

  • Are monitoring and reporting systems in place? Do they draw on evidence from officials and other reliable and impartial sources?

  • Is there transparent reporting to parliament and the public on PCSD, and on the impact of sectoral policies on SD?

  • Are resources and capacity adequate to analyse PCSD?

  • Is there a mechanism for assessing the performance of sectoral policies with regard to SD?

  • How are policies adjusted as new information on negative effects appears in the course of implementation, or as circumstances and priorities change?

  • Reporting

  • Analytical capacity

3.2. Adapting monitoring mechanisms to the new agenda

  • Have specific indicators been identified at the national level to measure progress on PCSD?

  • Is the monitoring system considering the whole policy-making cycle (identification, formulation, adoption, implementation and assessment)?

  • Have indicators been identified to address all elements of PCSD (functions and capacities, policy interactions in achieving SD outcomes, and policy effects)?

  • Are trans-boundary and long-term effects taken into account?

  • Data collection

  • Indicators

3.3. Measuring policy interactions

  • Have the critical interactions across SDGs and Targets been mapped out? Have potential synergies and trade-offs been identified? Have PCSD priority areas been identified based on these interactions?

  • Can existing indicators at national and subnational level be used to capture policy interlinkages and examine co-relations across sectors (e.g. rate of deforestation due to agricultural expansion)?

  • Capturing synergies and trade-offs

Analytical framework: Understanding policy coherence for sustainable development

The economic, social and environmental challenges that the SDGs aim to address cannot be treated separately by fragmented institutions and policies. A comprehensive analysis of those challenges, their interconnections and implications as well as good information on the views and roles of diverse actors at different levels (local, national, international) and within and outside the government are critical for a coherent and evidence-based decision-making in implementing the SDGs.

A key challenge that policy-makers face is to ensure an integrated approach in implementing the SDGs. Policy makers need information and analysis to know what their realistic options are, what inconsistencies might result from their decisions in different sectors for achieving the targets, how the cost of those inconsistencies can be mitigated, and how they can explain to their constituencies the trade-offs they have to make.

This section aims to provide policy-makers, upstream as well as downstream, with key elements to consider for reconciling divergent policy objectives, anticipating impacts, strengthening coordination and guiding integrated decision-making, including at the interface between domestic and foreign policies. The annotations include a detailed description of the PCSD analytical framework and its key elements: actors, institutional mechanisms, policy interactions, contextual – enabling and disabling – factors, and policy outcomes and effects.

From the perspective of this framework a coherent policy would be one which take into account: i) the roles of diverse actors at different levels (governments, international organisations, private sector and non-governmental organisations), as well as the diverse sources of finance – public and private, domestic and international – for achieving sustainable development outcomes; ii) the policy inter-linkages across economic, social and environmental areas, including the identification of synergies, contradictions and trade-offs, as well as the interactions between domestic and international policies; iii) the contextual factors, i.e. the enablers (that can contribute to) and disablers (that hamper) sustainable development at the global, national, local and regional levels; and iv) the policy effects on the well-being in one particular country “here and now”, on the well-being of people living in other countries “elsewhere”, and of future generations “later”.

Take account of the role of key actors in advanced, emerging developing economies for addressing sustainable development challenges

In an interconnected world economy, policies in any country can influence sustainable development across the globe. For example, the agricultural and associated trade policies of larger developing countries have increasingly important impacts on world markets. According to OECD analysis, during the 2007-08 food price crisis, export restrictions applied by several emerging economies exacerbated the crisis and placed a particular burden on some developing countries unable to source imports (OECD, 2013c). In a more interconnected world economy, it is no longer relevant given the changing structure of world trade, to view the international spillover effects of policies as exclusively a developed country issue.

Policy coherence is also relevant for developing countries to advance sustainable development objectives. An example is the cost and trade-offs of high levels of fossil fuel subsidies. In 2011, subsidies in developing countries were nearly six times higher than in OECD countries (amounting to around USD 43 billion). OECD analysis concludes that phasing out fossil fuel consumption subsidies in emerging and developing countries could reduce global greenhouse gas emissions by 6% by 2050 compared to business as usual, and by over 20% in Russia, the Middle East and North Africa. A fuel subsidy reform could also offer fiscal space for the local government to extend social programmes targeted specifically to the poor.

Constructive dialogue on common challenges among developing countries, emerging and advanced economies is essential to generate the sound evidence-base needed to inform policy-making, promote collective action, and ensure progress on policy coherence for sustainable development. The analysis on the role and actions of key actors requires addressing the following questions:

  • Which actors (countries, international organisations, as well as key stakeholders such as governmental, businesses and non-governmental decision-makers) have to be involved and influenced?

  • How can other countries and key stakeholders be better engaged in policy coherence efforts to support the implementation of SDGs?

  • What is the role of the private sector, civil society organisations, bilateral and multilateral donors, and other stakeholders?

  • Has the role of parliaments, subnational and local governments, and municipalities been considered?

Identify inter-linkages and different types of interactions between economic, social, and environmental policies (horizontal coherence)

The integrated and transformative nature of the 2030 Agenda for Sustainable Development require policies that systematically consider sectoral inter-linkages (synergies and trade-offs) between the economic, social and environmental spheres. This is fundamental to ensure that progress achieved in one goal (e.g. SDG on water) contributes to progress in other goals (e.g. SDG on food security or SDG on health or SDG on sustainable cities). Conversely lack of coherence across policy areas underpinning the SDGs poses the risk that progress achieved in one goal occurs at the expense of that in another goal. For example, an increase in agricultural land use to help end hunger (SDG2) could result in biodiversity loss and undermine progress on SDG target 15.5 (halt the loss of biodiversity).

The analysis should focus on how domestic/sectoral policy objectives interact with sustainable development goals. This analysis could be undertaken in two steps: first a stocktaking of sectoral policy objectives relevant for achieving the SDGs at national and international levels; and second a mapping of overall interactions among sectoral objectives and their potential contribution to the SDGs. Some countries have undertaken mapping exercises to identify policy objectives and instruments relevant for SDG implementation (Box 2.2).

Box 2.2. Mapping policy objectives and instruments for SDG implementation

Finland – In preparation of the National Agenda 2030 Implementation Plan, the Prime Minister’s Office conducted a survey in February-March 2016, encompassing all Government Ministries in order to explore the existing and missing policy instruments for implementation in Finland. The Ministries were asked to identify which goals and targets they are covering and by which policies and measures. The measures can vary from national and EU legislation to sectoral or thematic strategies and action plans, as well as implementation of the international agreements and commitments. The survey compiles all relevant policies and measures, indicates the state of play and budgetary status, and analyses areas of insufficient action or potential for cross-sectoral co-operation.

The interactions between water (SDG6), energy (SDG7) and food (SDG2) for example are numerous, complex and dynamic. Agriculture is the largest user of water at the global level; energy is needed to produce and distribute both water and food; and the food production and supply chain accounts for almost one third of total global energy consumption (OECD, 2015). Policy decisions made in these sectors can have significant impacts on each other and tensions may arise from real or perceived trade-offs between various objectives.

Table 2.2 provides an integrated perspective of the 17 SDGs – across the top – with their 169 associated targets. It illustrates the integration of the dimensions of sustainable development in each target (environment: green; social: blue; and economic: orange) including targets on means of implementation. It shows some of the diverse types of interactions that may occur between targets related to water-energy-food, for example according to some analysis (Weltz et al., 2014 and ICSY-ISSC, 2015):

  • Some targets reinforce each other highlighting potential synergies, for example target 6.4 (increase water-use efficiency across all sectors) can ensure that more of the irrigation water actually reaches plants, thereby helping to achieve target 2.3 (agricultural productivity).

  • Conflicts and trade-offs also may occur. For example between the targets 2.1 (end hunger) and 7.2 (increase substantially the share of renewable energy) by producing biofuels, if food crops and biofuel crops are competing for the same land and/or irrigation water.

  • Some targets can be considered as enablers. For example target 6.1 (access to safe and affordable drinking water) is essential to achieve health targets (e.g. target 3.2 end preventable deaths of new-borns and children under 5 years of age).

These types of sectoral interactions need to be considered to take coherent decisions in achieving the SDGs. This means that institutions concerned with a specific goal (education, health, or energy) will have to take into account targets that refer or are relevant to other goals.

Table 2.2. Some examples of the interactions between water, energy and food in the SDG Framework
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Source: OECD Policy Coherence Unit (2015), adapted from Korösi (2014).

Applying PCSD analysis can help to understand how the SDGs are interconnected and inform policy-making. Governments, in the preparation of national plans for implementing the SDGs, could organise multi-stakeholder consultation processes and mapping exercises to identify sectoral interactions (synergies, trade-offs, complementarities and impacts) critical for achieving the SDGs. Analysing policy interactions as well as the role of diverse sectoral policies can play in the implementation of the SDGs requires addressing the following questions:

  • Have economic, social and environmental policy inter-linkages (synergies and trade-offs) been considered?

  • How do the planned policy outputs contribute to achieve sustainable development goals?

  • How does the actions to attain one SDG (e.g. food security) support or hinder progress in other SDGs (e.g. Water or Health)?

  • Are governmental organisations moving from sectoral perspectives (e.g. agriculture, trade, investment, water, energy) towards a more integrated decision-making processes and “issues-oriented” agenda (e.g. food security)?

Identify enabling and disabling conditions

Enhancing policy coherence for sustainable development in the implementation of the SDGs involves taking into account the extent to which policies could lead to reinforce negative systemic conditions or disablers (i.e. social, political economic, environmental and institutional factors) that hinder countries’ capacities to achieve sustainable development objectives. These conditions include, among others, barriers to trade, markets, and knowledge, as well as inequality, conflict, corruption, environmental threats or climate change impacts.

Similarly, enhanced PCSD requires considering the extent to which policies contribute to the creation of enabling environments (or enablers) at the local, national, regional and global levels supportive of transformation processes towards sustainable development. Policy coherence analysis could provide a lens through which to identify potential “enablers” and guide coherent policy action from local to global levels. These include measures or policy efforts undertaken by the government to promote for example: a universal agreement on climate change, a fair, open and rules based global trading system; a stable financial system, a fairer and more transparent international tax system, among others.

Analysing these influencing factors in achieving the SDGs can help to identify priority areas for policy coherence as well as consider the unintended consequences of policy measures. This requires addressing the following basic questions:

  • Have the existence of enabling environments which affect positively policy outcomes been considered?

  • Have the contextual factors (corruption, barriers to trade, knowledge, etc.) which might influence the policy outcomes been identified? What efforts have been made to address these factors?

Consider diverse sources of finance to foster coherence and an integrated framework for financing sustainable development

Achieving the SDGs requires that all available resources – public, private, domestic, international – are effectively mobilised to finance sustainable development. According to the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF), a key challenge is that excess liquidity is not flowing where needed. The annual global amount of investments required for key infrastructure sectors as part of the sustainable development implementation is estimated to be around USD 5 to 7 trillion, while the annual amount of global savings is currently at USD 22 trillion (ICESDF, 2014). This means that in addition to ODA, new sources of finance and financial instruments could be used. Private capital in the form of equity, bonds, non-concessional loans, risk mitigation instruments (including guarantees) plus philanthropic funds from foundations and trusts are all now playing a greater role. Given the potential volumes, they could be a transformative source of development finance in the future (OECD, 2014d).

PCSD analysis should also focus on the complementarity and consistency of existing sources and on ways to increase the efficiency of financing frameworks for sustainable development. According to UN analysis, there has been a proliferation of public, private, domestic, bilateral and multilateral sources of financing for sustainable development with over fifty international public funds (multilateral and bilateral), 55 carbon pricing mechanisms and countless equity funds in operation. As a result, the financing landscape is complex and inefficient, with many funds underfunded. The sector-oriented silo approaches in policy and decision making influence the coherence of international public financial frameworks for sustainable development. This leads to: i) a fragmentation of international, regional and national funding instruments, channels, agents and initiatives; ii) unrealistic sector targets at all levels; iii) missed cross-sector synergies; iv) incompatible sector policies; and v) inconsistent fund allocation across sectors (UN TST, 2013).

Improving the coherence between the diverse financing sources of sustainable development requires addressing the following questions:

  • Have all the potential sources of finance been identified (public, private, domestic, international) for sustainable development?

  • Are there specific mechanisms to avoid fragmentation of international, regional, and national funding instruments?

  • Have the enabling conditions and necessary incentives to ensure contributions from private sources been considered?

Consider trans-boundary and intergenerational impacts

Enhancing coherence for sustainable development and for achieving the SDGs entails considering more systematically in policy making what matters for human well-being of the present generation in one particular country – “here and now” –, what matters for the well-being of future generations – “later” – and what matters for the well-being of people living in other countries – “elsewhere”. This refers to the long-term impact of policies at national and global levels.

Essentially sustainable development is a matter of distributional justice, in both time and space. This means that the distribution of well-being between the present and future generations is included, as well as the difference in well-being between countries (UNECE/OECD/Eurostat, 2014). Considering these conceptual dimensions is even more important in an increasingly interconnected world, where diverse growth and development paths of different countries impact on each other in the context of sustainable development.

The ‘elsewhere’ dimension (transboundary impacts) captures and highlights the ways in which countries in the pursuit of the well-being of their own citizens may affect the well-being on other countries. It refers to the international dimension of sustainable development. Support measures for fossil fuels for example often introduce economic, social and environmental distortions with unintended consequences that easily spill over globally. Fossil fuels are responsible for the majority of global GHG emissions, and fossil fuel subsidies – amounting to USD 510 billion worldwide in 2014 – contribute to climate change, but also have health implications, undermine incentives to invest in renewables, and can be replaced by more effective and targeted support for the poor.

The “later” dimension, i.e. the well-being of future generations depends on the resources (capital) the current generation leaves behind. These include: economic capital (physical, knowledge, financial); natural capital (energy and mineral resources, land and ecosystems, water, air quality and climate); human capital (labour, education, and health); and social capital (trust and institutions).

This approach is particularly relevant for PCSD analysis since it can enable policy-makers to distinguish to what extent their policy choices may lead to problems in other countries and in future generations. The section on “Monitoring Framework: tracking progress on diverse elements of coherence” provides examples of indicators which can be used to measure these dimensions. Considering more systematically the transboundary and long-term effects of policies requires addressing the following questions:

  • Does the policy produce unintended effects, positive or negative, that could affect the well-being of people living in other countries?

  • Which groups would be affected and how? How can the unintended negative effects be mitigated?

  • Have the potential direct or indirect long-term effects on well-being of future generations been identified?

  • Are the economic, social and environmental costs of policy decisions considered?

Institutional framework: Breaking out of policy silos

Implementing the SDGs requires governments to be able to work across policy domains, and adopt more integrated approaches to sustainable development. Institutional mechanisms for policy coherence can facilitate policy integration across various sectors. The SDGs as an internationally agreed framework offer an opportunity to build complementarities of planned policies, programmes and actions in the economic, social and environmental areas to increase the long-term effectiveness of government policy agendas.

The implementation of the SDGs goes beyond the responsibility of one line ministry or policy community. It will require the active involvement of all policy communities and a wide range of stakeholders that allow for a holistic (whole-of-government/whole-of-society) perspective of the issues at stake. It will require high-level political commitment; strategic policy frameworks; and effective and well-functioning institutional coordination mechanisms.

The general guidance set out in this section aims to help governments align their existing institutional mechanisms for coherence to the vision and needs of the SDGs. It draws on the experience of PCD building blocks (Figure 1), and highlights those recommendations from 2010 on good institutional practices in promoting PCD that are considered still relevant in the context of the 2030 Agenda for Sustainable Development. It also takes into account some experiences of the National Sustainable Development Strategies implemented by OECD countries in accordance with the 1992 mandate of Agenda 21 for sustainable development.

Figure 2.1. The policy coherence cycle
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Source: OECD (2009), Building Blocks for Policy Coherence for Development.

Build awareness of the challenges that the Sustainable Development Goals aim to address as well as of the nature of the new agenda

The SDGs are the result of one of the largest ever international consultations to identify global challenges and priorities. They will guide international efforts on policy and practice over the next 15 years. Heads of State and Government, local authorities, business leaders, policy makers, parliamentarians, citizens, and other stakeholders should understand the nature of the new sustainable development agenda, the economic, social and environmental challenges that we all are confronting, and the need to address them in an integrated and coherent manner.

The implications of economic, social and environmental sustainability need to be brought into the general policy debate and into sectoral policy agendas. The vision, principles and operational objectives for implementing the SDGs need to be well understood by the public, politicians, public organisations and across levels of government. Similarly, the benefits of aligning national and local plans as well as institutional mechanisms and policy making processes to the SDGs need to be highlighted.

Several governments organised national consultations during the negotiation processes for the SDGs (Box 2.3). Similar consultations can be organised for developing implementation plans involving all key stakeholders and building common understanding and public awareness and support on the new agenda.

Box 2.3. Building awareness on the SDGs

Spain – to prepare the Spanish position for the post-2015 negotiations, an extensive consultation process began at the end of 2012 with the commissioning of a preliminary academic report, and in early 2013 diverse workshops were organised among academics, policy makers and more than 50 development specialists. The First National Consultation on this Academic Report took place in September 2013 followed by a set of workshops focused on food security and nutrition; global health; gender and inequality; growth and employment; environmental sustainability; water and sanitation; energy; governance and education. The consultation process culminated after two years in September 2014 with the Second National Consultation. A multi-stakeholder approach contributed to promoting better decision making and policy coherence and to create trust between different actors in order to build a common position within the Spanish system.

Sweden – In February and March 2015, the Ministry for Foreign Affairs organised a comprehensive consultation process on the 2030 Agenda. In total, about 200 people participated, which together represented about 130 different civil society organizations, business associations, trade unions, policy and research institutions and government agencies. The purpose of the consultations was to obtain expert knowledge of relevant Swedish actors, to share information on the process and the negotiations on the 2030 Agenda and to initiate broad support in Sweden for the 2030 agenda.

Achieving a common understanding on the challenges and the nature of the new agenda requires addressing the following questions:

  • Are the concepts of sustainable development, SDGs, and PCSD well understood by the public, governmental organisations and across levels of the government?

  • What efforts have been made to develop clear, widely accepted and operational objectives and principles for achieving the SDGs?

  • How do the SDGs inform policy-making?

  • Has the role of PCSD been considered for implementing the SDGs?

Ensure commitment at the highest level

Clear government commitment to the SDGs is essential to support the development of a concrete national strategy and subsequent action (Box 2.4). Strong leadership and clearly stated and articulated commitments at the highest political level is a precondition to coherence for sustainable development. Political commitment needs to be expressed at the highest levels and backed by policies, instructions, legislation, and incentives that allow taking sustainable development forward.

Box 2.4. Political Commitment

Recommendation 1: Make public the government’s political commitment regarding objectives and policy priorities on policy coherence for sustainable development, clearly outlining how these relate to the SDGs.

Recommendation 2: Publish time-bound plans for making progress on policy coherence for sustainable development in implementing the SDGs.

Recommendation 3: Educate and engage the public, working with civil society, research organisations and partner countries, to raise awareness of government commitments supporting policy coherence for sustainable development as part of the means of implementation for the SDGs.

Source: Recommendations adapted from the 2010 Council Recommendation on Good Institutional Practices for Promoting Policy Coherence for Development.

2. In achieving the 2030 Agenda for Sustainable Development, governments have to ensure that policies in all sectors are aligned with the SDGs and associated targets. This entails overcoming “silo” thinking and reluctance from “short-termism”. It requires leadership for establishing priorities, planning for longer-term policy objectives, and seeking a balance with short-term problem solving objectives and considerations that often are a priority. It also requires specific initiatives by governments to better integrate the SDGs within the mandate of each national institution (Box 2.5).

Box 2.5. Integrating the SDGs into national strategies

Austria – By decision of the Austrian Council of Ministers of 12 January 2016, the Austrian Government has requested all Ministries to integrate the SDGs into their relevant programs and strategies. The SDGs have already been fully incorporated into some new policies and programs, such as the Three-Year Program guiding the Austrian development co-operation from 2016-18.

Finland – According to the Government Program on 2015, a National Agenda 2030 Implementation Plan will be drawn up by the end of 2016. This Plan will outline how Finland in various policy sectors and in international co-operation will carry out the principles, goals and targets of the Agenda 2030, and how the progress of the implementation will be monitored and reviewed. It identifies Finland’s strengths as well as major gaps and challenges and offers solutions and tools to improve the efficiency.

Japan – The government is developing a national system for the implementation of the 2030 Agenda across the government. In parallel, relevant ministries are mapping out their respective policies and initiatives to analyse gaps and integrate SDGs into their policy frameworks.

Achieving clear commitment at the highest level possible and leadership implies addressing the following questions:

  • Is there a clear commitment at the highest political level to the implementation of SDGs and formulation of a national strategy?

  • Is there a political statement spelling out the government’s commitment to PCSD?

  • Is this commitment effectively communicated across levels of government?

  • Has it made a public commitment endorsed at the highest political level to integrate sustainable development into specific sectoral policies with clear links to the SDGs?

  • Has the government identified priority areas for PCSD and developed action plans?

Ensure leadership of the Centres of Government in the priority-setting process

Institutional arrangements can facilitate co-ordination and collaboration across different ministries and levels of government, but they could be more effective if are supported by the Centre of Government (CoG) (Box 2.6). The CoG is an essential institution to securing policy development, policy implementation and co-operation across ministries in support of strategic domestic and international objectives. Achieving a coherent international framework for sustainable development with a set of universal goals has entailed convergence between key inter-related international processes. For example, the successful negotiation of three major conferences in 2015 – i) the Third International Conference on Financing for Development (FfD); ii) the UN Summit to adopt the Post-2015 Development Agenda; and iii) the 21st Conference of the Parties (COP21) – have major implications for national policy and practice and require leadership at the highest levels of government to convene the different policy interests, achieve consensus and reconcile potentially competing objectives, and ensure coordination.

Box 2.6. OECD Network of Senior Officials from Centres of Government

The Centres of Government (CoG) provide direct support and advice to the Head of Government and the Council of Ministers. They consist of Heads of Prime Ministers’ Offices, Cabinet Secretaries, or Secretaries-general of the Government, depending on the state structure. CoGs act as a coordinator to ensure horizontal consistency among policies. They also contribute to promoting new and innovative approaches to policy development and delivery across public services.

The OECD Network of Senior Officials from Centres of Government convenes meetings with these decision makers on an annual basis, providing a forum for informal discussion on topics of high relevance, including growth, new economic challenges, or political economy of reform. The Network is one of the OECD’s highest-level policy networks.

For more information: www.oecd.org/gov/cog.

The Centre of Government may be the best placed to provide that leadership. The Centre is in principle policy neutral in contrast to line ministries or departments, it has a convening power which can influence policy adjustments, as well as coordination expertise and experience in dealing with cross-cutting issues and complex agendas. Governments should, however, build on existing policy co-ordination structures and inter-ministerial mechanisms, including those facilitated by PCD national focal points and those established as part of the Agenda 21 for sustainable development, and ensuring vocal champions wherever possible.

Ensuring the involvement of the Centres of Government for the coordination and implementation of the SDGs requires addressing the following questions:

  • Are the current Sustainable Development priorities of the government aligned to the vision of the SDGs?

  • Is policy coherence for sustainable development an element of the national strategy?

  • Is there involvement of the Centre of Government in the coordination of high level priorities for sustainable development and for achieving the SDGs across line ministries?

  • Are there specific mechanisms to ensure effective feedback between different levels of government?

Engage key actors and stakeholders in the priority-setting process from the outset, and stimulate multi-stakeholder action for sustainable development

Sustainable development involves trade-offs among economic, social and environmental objectives and value judgments which cannot be determined by governments alone. The implementation of the SDGs will require effective communication and participatory approaches, whereby governments and key stakeholders, acting individually and collectively, identify common challenges, set priorities, align policies and actions, and mobilise resources for sustainable development. This will allow for an aggregated and coherent set of actions at the local, national, regional and global levels by governments, intergovernmental organisations, the private sector and civil society organisations.

Cities and local governments can provide an important conduit from the national level to local citizens and community groups. They can generate and compile data and provide innovation labs for new sustainable development strategies and approaches. Academia can provide evidence, identify best practice and play a key role in public awareness. Civil society can represent the needs of under-represented communities and regions and help ensure accountability. Other actors will be critical for helping to mobilise or provide finance and technical assistance. This multi-stakeholder engagement will also be important in light of the long-term nature of the SDG Agenda which needs to transcend partisan politics and electoral cycles and steer the country to success by 2030. Broad-based consultations involving a wide range of stakeholders were conducted in a number of countries in the in the process leading up to the SDGs, which provide a good basis for further stakeholder engagement (Box 2.7).

Box 2.7. Multi-stakeholder engagement

Finland adopted “The Finland We Want by 2050 – Society’s Commitment to Sustainable Development” in 2014. It brought together government leaders and representatives from local communities, the social partners and civil society organisations to agree on a long term vision, key government programmes and action programmes from business and other civil society organisations.

Germany has a Sustainable Development Council, consisting of experts from science, business and civil society appointed by the Federal Chancellor, to advise the government on sustainable development questions and contribute to improving the Sustainable Development Strategy. Germany’s BMZ also undertook a consultation process to echo the voice of its citizens in a “Charter for the Future”.

Multi-stakeholder partnerships, including public-private partnerships can help mobilise the actions and means for creating the necessary enabling environments to achieve the SDGs. Achieving this requires addressing the following questions:

  • What mechanisms are in place to involve and promote active participation of the government departments, parliamentarians, civil society, business and industry, academia, in the preparation of national strategies for achieving the SDGs?

  • How have other countries, international organisations and stakeholders been involved and helped inform the design of plans for enhancing PCSD?

Establish a coherent strategic framework for achieving the SDGs

Establishing a strategic policy framework for sustainable development will help ensure that sectoral, domestic, and foreign policies are coherent with the government’s common agenda, commitments and priorities for achieving the SDGs. The Centre can use the strategic policy framework as a tool to orient policy development in line ministries. This can be facilitated if the government’s agenda for achieving the SDGs has been mapped out collectively, i.e., with the involvement of all the ministries who will be responsible for its implementation. The high level goals and priorities established by the government should be made public, clearly outlining how these relate to the SDGs.

Several governments have started their processes for aligning national strategies to the 2030 Agenda and the SDGs. These processes are involving all ministries to identify priorities, and integrate the SDGs and targets in their sectoral programmes (Box 2.8), see also Chapter 7.

Box 2.8. Integrating the SDGs into national strategies

Austria – By decision of the Austrian Council of Ministers of 12 January 2016, the Austrian Government has requested all Ministries to integrate the SDGs into their relevant programs and strategies. The SDGs have already been fully incorporated into some new policies and programs, such as the Three-Year Program guiding the Austrian development co-operation from 2016-18.

Finland – According to the Government Program on 2015, a National Agenda 2030 Implementation Plan will be drawn up by the end of 2016. This Plan will outline how Finland in various policy sectors and in international co-operation will carry out the principles, goals and targets of the Agenda 2030, and how the progress of the implementation will be monitored and reviewed. It identifies Finland’s strengths as well as major gaps and challenges and offers solutions and tools to improve the efficiency.

Japan – The government is developing a national system for the implementation of the 2030 Agenda across the government. In parallel, relevant ministries are mapping out their respective policies and initiatives to analyse gaps and integrate SDGs into their policy frameworks.

Building a coherent framework for pursuing the SDGs requires addressing the following basic questions:

  • Is the government aligning its national or sectoral strategies to the SDGs and setting whole-of-government plans for implementation at the domestic and international levels?

  • Is PCSD recognised in national strategies as an integral part of the means of implementation?

  • Have the roles and responsibilities for domestic and international implementation been specified?

Make use of existing co-ordination mechanisms to steer sustainable development integration

3. There exist a variety of well-known policy-coordination mechanisms, particularly in OECD countries. Many of them have existed for years, and represent important tools to achieve policy coherence for sustainable development (Box 2.9).

Box 2.9. Co-ordination practices relevant for PCSD

National practices at central level

The complexity of modern government requires the usage of effective coordination mechanisms within the administration. This better enables the various component parts of a government to consult and coordinate on policies, and to resolve any conflicts or inconsistencies in either their development or implementation. This involves working out how policies are formulated and developed, how they are implemented, how they are monitored and reviewed. A central oversight or “whole-of-government” perspective on the formulation, implementation and impact of policy and regulations, can also help to ensure coherence. However, a less centralised approach can involve inter-ministerial co‐ordination. There, policy coherence is promoted in the first instance by development ministries or agencies which have the mandate to promote consideration of development issues in the policy making process.

National practices at line ministry level

Establishing Cabinet Sub-Committees or Cabinet Committees has been the practice for many OECD countries. They provide an opportunity for coherence at a political level, and an opportunity for the Centre of Government to be aware of what is happening across the civil service in key strategic or politically sensitive issues, and to bring sustainable development considerations to bear. The “shadowing” of such Cabinet or sub-Cabinet Committees by inter-ministerial committees and working groups offers opportunities both for preparing the groundwork for forthcoming meetings of the political administration, and for better sharing of information across ministries. Similar networks or team-based approaches to working within line ministries, which offer the opportunity for public sector agencies, under the aegis of the ministry, to be included, have proven to help ensure that appropriate internal dialogue and co-operation take place.

National practices at sub-national levels of government

In some countries, sub-national levels of government have a role in setting or developing policy priorities, and can play a significant role in policy implementation and in monitoring the coherency of policies for sustainable development. In these cases, they are uniquely placed to observe at first hand where inconsistencies and incoherent approaches occur.

Source: C(2010)41 – C/M(2010)8/PROV “Recommendation of the Council on Good Institutional Practices in Promoting Policy Coherence for Development”.

The 2010 Recommendation of the Council on Good Institutional Practices in Promoting Policy Coherence for Development identified general processes for efficient co-ordination that have proven to be practical for promoting PCD. They can be helpful as guidance for promoting PCSD where they are compatible with the general national institutional context (Box 2.10).

Box 2.10. Policy Co-ordination

Recommendation 2: Use the Government Office/Centre of Government as mandated for the central coordination of high-level policy priority issues to ensure general coherence and consistency of approach across line ministries.

Recommendation 3: Encourage the Government Office/Centre of Government, as appropriate, to play a pro-active role in promoting the integration of sustainable development in policy coordination at the cabinet level, in accordance with the particular organisational systems that exist at national level.

Recommendation 4: Establish efficient processes at appropriate levels for inter-ministerial coordination to resolve policy conflicts, while ensuring that mandates and responsibilities are clear, fully involving ministries beyond development and foreign affairs.

Recommendation 5: Ensure that both formal governance arrangements and informal working practices support effective communication between ministries and departments, and between ministries and public sector bodies under their aegis.

Recommendation 6: Consult appropriately the sub-national levels of government in both policy development and the monitoring of policy implementation, when they have a role in this area.

Source: Recommendations adapted from the 2010 Council Recommendation on Good Institutional Practices for Promoting Policy Coherence for Development.

In the context of the 2030 Agenda for Sustainable Development, existing coordination structures could be used to enhance PCSD. Many countries set up inter-agency or inter-ministerial co-ordinating committees for sustainable development as part of the National Sustainable Development Strategies (NSDS) agreed in the Agenda 21 signed at the United Nations Conference on Environment and Development in 1992. These co-ordination mechanisms have provided an overarching integrative body and framework for action. However, in most OECD countries, responsibilities for NSDS implementation were housed in the Ministry of Environment, either directly or indirectly through a co-ordinating committee which it oversees.

4. A good practice is to assign overall co-ordination to a Prime Minister’s office or the equivalent which has greater authority to demand inputs and resolve conflicts than line ministries (OECD, 2006). Several countries have started to adapt institutional settings to integrating the SDGs as well as strengthen coordination mechanisms for implementation (Box 2.11).

Box 2.11. Strengthening policy coordination mechanisms for SDG implementation

Finland – the government decided that from 1st January 2016, the Prime Minister’s Office (PMO) is in charge of the co-ordination of the national implementation of the 2030 Agenda for Sustainable Development and the SDGs to ensure an integrated approach. The Coordination Secretariat includes representatives from the PMO, Ministry for Foreign Affairs and the National Commission on Sustainable Development. The Secretariat, establishing an operational hub, works closely together with the Co-ordination Network, comprising all Government Ministries.

Poland – Poland will use existing structures, mechanisms and tools to implement SDGs. The main tool for the external implementation of the 2030 Agenda is the new Multiannual Development Co-operation Programme for the period 2016-2020, which was adopted in October 2015. The new plan makes an explicit commitment to PCSD.

Switzerland – Switzerland is committed to implement the 2030 Agenda for Sustainable Development. Major strategic documents include Switzerland’s Sustainable Development Strategy 2016-2019 as well as its Dispatch on Switzerland’s International Co-operation 2017-2020. The government has stressed its willingness to ensure a high level of policy coherence for sustainable development. An inter-ministerial co-ordination group has been set up for a transition period to review and build on existing structures with the aim to arrive at an efficient process within the Confederation to implement the 2030 Agenda in domestic and foreign policy.

Experiences in involving and coordinating the government departments as well as key stakeholders that are relevant to address a cross-cutting issue, such as food security, have proved to be useful for allowing policy coherence strategies to take a more integrated perspective, give voice to a range of different interest and identify trade-offs and synergies across policy areas. The Food Security pilot undertaken by Finland (Box 2.12) has proven its value as a good model for sharing and pooling knowledge on policies affecting food security overall, and for shaping objectives and recommendations for related policies.

Box 2.12. Finland’s Food Security Pilot 2012-13

The Government of Finland piloted a preliminary version of the OECD Policy Framework on Policy Coherence for Sustainable Development in 2012-13, to analyse how Finnish and EU policies impact on food security and the right to food in developing countries. Focus was put on i) national institutional mechanisms to promote policy coherence; ii) influencing EU policies in the areas of agriculture, fisheries, environment and trade from a development perspective; and iii) creating a new type of broad-based co-operation, in order to strengthen Finland’s voice in various international fora discussing global food security.

Under the leadership of the Ministry for Foreign Affairs (MFA), the pilot was launched in June 2012 by the inter-ministerial high-level working group on PCD, chaired by the Under-Secretary of State for Development Policy. It was one of the key measures in the Government’s Development Policy 2012 and also provided essential substance to the Communication on Development Impact and Policy Coherence for Development that the Government submitted to Parliament in early 2014.

By invitation of the Under-Secretary of State, a steering group for the pilot was established in August 2012. The steering group consisted of a wide range of stakeholders, each responsible for a different element of the assessment:

  • Government: MFA (development and trade); Ministry of Agriculture and Forestry (MAF); Ministry of Environment (MOE); Ministry of Social Affairs and Health (SAH); Ministry of Economy and the Employment (MEE).

  • Research institutions: Finnish Meteorological Institute; Helsinki University/development and agriculture studies; Pellervo Economic Research; Statistics Finland; Agrifood Research Finland

  • NGOs: Central Union of Agricultural Producers and Forest Owners; Kehys – The Finnish NGDO Platform to the EU; Finnchurchaid.

The pilot was executed in six phases, with a different steering group member responsible for each phase. The group finalised its work in late 2013, and a report on the pilot was launched during the European Development Days in November 2013.

Source: Ministry of Foreign Affairs, Finland (2013), Food security in developing countries can be enhanced through an interplay of policies, Executive Summary.

Strengthening co-ordination mechanisms for enhancing policy coherence in the implementation of the SDGs requires addressing the following questions:

  • Have formal mechanisms been established for inter-ministerial collaboration, coordination and policy arbitration on SD?

  • Do these mechanisms provide opportunities for informing ex ante on domestic policy making as well as on its interface with foreign policies?

  • Is it located strategically within the government organisational structure to promote coherence and resolve policy conflicts (e.g. at the level of the Prime Minister’s office)?

  • Is the budget process used to set priorities, reconcile policy objectives and promote policy integration?

Set country-specific SDG targets and use them to guide coherent national action

The 2030 Agenda for Sustainable Development calls on each country to set its own national targets adapted to differing national circumstances, capacities and priorities, and consistent with internationally agreed standards, but guided by the global ambition in the SDGs. The new agenda envisages that “each government will also decide how these targets should be incorporated in national planning processes, policies and strategies” (UNGA,2015).

Translating the SDGs and targets into actionable, measurable and achievable country-specific targets, requires paying attention to interlinkages, synergies and trade-offs between policy areas and between different levels of policy implementation (local, regional, international). National targets can guide policy coherence for sustainable development. The preparation of national targets should involve all ministries as well as local and regional authorities. The proposed “Integrating Approach” by Colombia provides one example of a participatory process for identifying priority targets for a national implementation strategy for the SDGs (Box 2.13). This approach could be useful for identifying sectoral priorities, examine their inter-linkages and implications, and reconcile potentially conflicting policy targets.

Box 2.13. The ‘Integrating Approach’ for identifying SDG targets

What is the “Integrating Approach”? It is an inclusive policy platform where actors from several policy communities come together to discuss the SDGs in their national context and identify priority targets, paying specific attention to inter-linkages, synergies and trade-offs. The process helps the stakeholders to translate the proposed global level SDGs and Targets into national level targets through a “bottom-up” approach, thus taking a first step towards developing a national implementation strategy for the SDGs.

Why this approach? Working in “silos” across several national agencies was seen as one of the main impediments to aligning its policy to the post-2015 agenda. To break this lack of coherence Colombia launched a participatory process with incentives for policy dialogue and interaction. The process was fully transparent, allowing each of the actors to identify their priorities, examine the inter-linkages, and reconcile potentially conflicting policy targets. The process will facilitate the setting of priorities and their subsequent implementation.

How was it done? The “Integrating Approach” was organised as follows:

  • Launching of the process by a senior official at the Ministry of Foreign Affairs involving 20 ministries and Presidential Councils;

  • Ensuring common understanding of purpose, benefits and methodology;

  • Identifying three priority targets within each agency

  • Collectively discussing the outcomes of the process and finding synergies. For example, the Ministry of Mines and Energy affirmed that formalizing the mining sector was its top priority. Other ministries and agencies joined in, noting that the target was also relevant to their interests.

  • Responsibility for follow up is transferred from the Ministry of Foreign Affairs to the National Planning Department as the discussions gathered momentum.

Source: Cited in Stockholm Development Institute, 2014, “Cross-sectoral integration in the Sustainable Development Goals: A nexus approach”.

Using national targets to guide policy coherence efforts entails addressing the following questions:

  • Does the prioritised set of national targets acknowledge policy inter-linkages and cover the three dimensions of sustainable development?

  • Are the targets based upon the best available data, evidence?

  • Do the targets contribute to economic and social transformation as well as to preserve the natural asset base?

Consider linkages between decisions and actions across different governance levels, from international to national and local levels (vertical coherence)

Sustainable development challenges as well as the SDGs require to be addressed at different levels. This is critical in an increasingly interconnected global economy where systemic risks have inextricable global-domestic linkages that need to be managed. Some of the challenges need to be addressed at the global level (e.g. climate change); at the national level (e.g. legislative changes or changes in economic, fiscal and trade policy); and at the local level (e.g. specific details on land use; human settlement patterns, or transportation planning). The impacts of decisions taken at different governance levels need to be considered in an integrated and coherent way to manage policy tensions or inconsistencies and enhance complementarities for achieving sustainable development.

Box 2.14. Local Level Governance in the context of the SDGs

As the level of government closest to the people, local and regional governments are uniquely placed to identify and respond to development needs and gaps, hence the need to “localise the Post-2015 Development Agenda”. Specifically, this refers to the process of defining, implementing and monitoring strategies at the local level for achieving global, national and sub-national sustainable development goals and targets. This involves concrete mechanisms, tools, innovations, platforms and processes to effectively translate the development agenda into action at the local level (UNDP et al., 2014). The aim should be to strengthen coordination, maximise flexibility in the local management of programmes, preserve efficiency in service delivery, ensure accountability for the use of resources invested, and promote participation from businesses and civil society (OECD, 2005).

The report Localizing the Post-2015 Development Agenda: Dialogues on Implementation (UNEP, 2014) is the result of a multi-stakeholder dialogue process carried out in 2014. The main recommendations include:

  • National governments and international partners should acknowledge and define the role of local governments and stakeholders in setting, implementing and monitoring the Post-2015 Development Agenda.

  • National governments and development partners should ensure that the localisation of the SDGs is accompanied by the localisation of resources, enabling local governments to raise more revenue locally.

  • Promote a bottom-up approach to ensure ownership of the Post-20 Development Agenda at the local level.

  • National planning institutions should align and embed the global development agenda into national and local development plans, and foster linkages and partnerships with other actors to harmonise local development activities and avoid duplications and promote effectiveness.

  • National governments and the international development community should recognise that local governments are best placed to convene local-level stakeholders, e.g. civil society, the private sector, and academia.

  • Governments at all levels must be held accountable for responding to social inclusion and human security challenges.

  • National governments and development partners should scale scale-up, replicate and adapt at the national and international levels.

  • Decentralised development co-operation should be acknowledged and used as a modality to support the implementation of the SDGs at local level.

  • Strengthen the capacities of national, regional and international associations of local governments to participate in global dialogues.

  • Promote transparency and wider access to data and information to local governments through ICTs.

  • SDG 11 to “make cities and human settlements inclusive, safe, resilient and sustainable” can help to mobilise local authorities and stakeholders and to focus the attention on the potential of urbanisation as a key driver for sustainable development.

Source: OECD (2005), Local Governance and the Drivers of Growth, OECD, Paris; UNDP, UN Habitat, Global Taskforce of Local and Regional Governments for Post-2015 Development Agenda Towards Habitat III (2014), Localizing the Post-2015 Development.

Enhancing vertical coherence (across different governance levels) entails addressing the following questions:

  • Has the government involved local stakeholders in the formulation and implementation of policies?

  • Is the national government supporting local authorities to increase or combine resources and capacities to formulate effective policy responses for sustainable development?

  • Are implementation responsibilities clearly divided among different levels of government, taking into account the distinct competences and comparative advantage of each level?

  • What mechanisms are in place to ensure coordination and joint action of agencies from different government levels involved in international initiatives?

Use budget processes as a tool for enhancing coherence for sustainable development

The budgetary process is the government’s key policy and priority setting document, where policy objectives are reconciled and implemented in concrete terms. It affects all sectors of activity and it is an important tool for policy integration for sustainable development. A country’s overall budgeting system seeks to allocate resources to government priorities and to achieve greater efficiency and effectiveness in government operations. Given that the budgetary process tends to be structured along departmental lines, a key challenge is to incorporate sustainability criteria and consider interlinkages between policies.

In general, a budgetary process involves several steps: budget preparation, approval, execution, audit and evaluation. In this process it will be important to see whether legislation, guidelines for the various ministries, recognition of international priorities such as the SDGs, resources, staff, and auditing procedures are in place. Using budgetary processes for enhancing coherence requires addressing the following basic questions:

  • Is the budget process used to align national priorities to the SDGs, reconcile sectoral objectives and foster policy integration?

  • What efforts are being made to re-structure the budgetary process to reflect the increasing cross-cutting nature of policy-making? Is sustainable development integrated into regular budget process?

  • In what ways are the policies and their associated resource allocations likely to reinforce each other for achieving sustainable development objectives?

  • How do policies and programmes reflect the priorities in the SDGs and Targets?

Promote an administrative culture for cross-sectoral collaboration and systematic dialogue among policy communities

An administrative culture that promotes cross-sectoral collaboration and a systematic dialogue between different policy communities will contribute to strengthen policy integration and coherence. Bringing together officials from different policy fields to examine interlinkages between policies can be a way to foster a more collaborative administrative culture, develop shared frameworks of understanding on sustainable development issues, and manage policy change.

Box 2.15. Embedding Culture Change in the Public Service in Support of PCSD

Recommendation 7: Ensure that staff with the relevant skills and competencies to support effective and coherent policy making are appropriately deployed across the public service.

Recommendation 8: Ensure that appropriate internal communication is undertaken to explain to staff how and why revised ways of working are being implemented.

Recommendation 9: Ensure that appropriate measures are taken to raise awareness across the broader society about the direction a government is taking with regard to policy development and priorities for sustainable development.

Source: Recommendations adapted from the 2010 Council Recommendation on Good Institutional Practices for Promoting Policy Coherence for Development.

Fostering an administrative culture that contributes to enhance policy coherence for sustainable development requires addressing the following basic questions:

  • What measures (management, performance incentives) are used to encourage collaboration and greater mobility of civil servants among ministries?

  • What mechanisms are in place to help increase the informal flow of information across ministries, institutions and sectors?

  • How sustained collaborative relationships are promoted among senior-level officials across the government?

Monitoring framework: Tracking progress on diverse elements of coherence

The assessment of OECD DAC members on policy coherence for development has been primarily focused on institutional mechanisms. Progress is conceptualised as a three-phase cycle, with each phase supported by one the three building-blocks for policy coherence: political commitment; co-ordination; and monitoring (OECD, 2009). These building blocks set out the essential functions and capabilities needed by countries to enhance policy coherence.

In the context of the 2030 Agenda for Sustainable Development, tracking progress on policy coherence for sustainable development at national level requires going beyond institutional mechanisms and identifying additional indicators that can inform policy‐making in any country towards sustainable development. It entails looking at the inter-linkages between economic, social and environmental objectives, and more specifically at the combined effect of diverse policies in these three areas and the way in which they enable or disable sustainable development. Considering critical sectoral interactions as well as trans-boundary and intergenerational effects, as highlighted in the first section of this chapter, is critical to support more efficient and coherent decisions in achieving the SDGs.

The general guidance provided in this section aims to help policy-makers and other stakeholders to complement, adapt, and strengthen existing PCD monitoring systems. It provides options for identifying indicators that could be used to track progress on institutional and policy performance; trans-boundary and long-term policy effects; and interactions between economic, social and environmental policies, i.e. how these interactions lead to policy tensions (trade-offs) or synergies. Diverse OECD indicators have been identified to support countries efforts to track progress towards PCSD in the three priority areas for policy coherence set out by the OECD Strategy on Development: food security, illicit financial flows and green growth (OECD, 2015).

Strengthen existing monitoring mechanisms for informing policy-making

A key element for enhancing coherence for sustainable development is informed decision making. This requires three complementary actions: i) putting in place monitoring systems to collect evidence about the diverse effects of policies; ii) developing analytical capacity to make sense of the data collected; and iii) establishing mechanisms for reporting back to parliament and the public. The ability to easily access and utilise up-to-date quantitative information on the performance of policies is crucial for accountability, learning and effective decision-making. Not only is such information important to assessing how policies are performing, but also for policy makers in refining or re-prioritising policy objectives and instruments.

Box 2.16. Monitoring, analysis and reporting

Recommendation 10: Embed an evidence-based approach to policy making across the public service, making use of appropriate assessment tools for policy coherence for sustainable development in support of this.

Recommendation 11: Ensure that structures are in place, including the allocation of sufficient and appropriate resources, to ascertain effective coordination for policy coherence for sustainable development.

Recommendation 12: Consider the data indicators and information that will be gathered and used to report back on performance, prior to the roll-out or implementation of new policies.

Recommendation 13: Monitor and report back on policy impacts by using local, sub‐national, and field-level resources, including embassies and development co-operation agencies, and by strengthening local capacities and international partnerships.

Recommendation 14: Ensure that in examining information on policy performance, including information gathered by field officials/local government officers, efforts be made to also draw on evidence available through other reliable and impartial resources, such as academia, independent domestic and international think-tanks etc.

Recommendation 15: Publish regular reports for the parliament and the wider public about progress on policy coherence for sustainable development, outlining progress made on the achievement of policy priorities and on how policies are being implemented regarding sustainable development issues. These reports would enhance transparency and accountability and they could be included in reporting on government activities and progress made towards meeting the Sustainable Development Goals.

Recommendation 16: Consider regular independent reviews of policy performance on high priority issues with a substantial impact on sustainable development objectives.

Source: Recommendations adapted from the 2010 Council Recommendation on Good Institutional Practices for Promoting Policy Coherence for Development.

Monitoring mechanisms need to be strengthened to ensure that policies can be adjusted in the light of their potential negative effects on sustainable development, new information, and changing circumstances. Achieving this entails addressing the following questions:

  • Are monitoring and reporting systems in place? Do they draw on evidence from officials and other reliable and impartial sources?

  • Is there transparent reporting to parliament and the public on PCSD, and on the impact of sectoral policies on SD?

  • Are resources and capacity adequate to analyse PCSD?

  • Is there a mechanism for assessing the performance of sectoral policies with regard to SD?

  • How are policies adjusted as new information on negative effects appears in the course of implementation, or as circumstances and priorities change?

Adapt existing PCD monitoring frameworks to the needs of the 2030 Agenda for Sustainable Development

Policy Coherence for Sustainable Development is a means of implementation for the SDGs, and therefore inextricably bound up with processes and outcomes. Monitoring PCSD in the context of the 2030 Agenda requires consideration of three inter-related elements of the policy-making process: 1) institutional mechanisms for coherence: 2) policy interactions across sectors; including critical contextual factors that promote or hinder contributions to sustainable development (enablers and disablers); and 3) policy effects, i.e. trans-boundary and intergenerational effects (Figure 2.2). This broader approach can be used to assess the extent to which domestic policies are aligned with national sustainable development objectives and contribute to the achievement of the SDGs.

Figure 2.2. Key elements for tracking progress on PCSD
picture

Source: OECD (2015), Better Policies for Development 2015: Policy Coherence and Green Growth, OECD Publishing, Paris.

Different sets of indicators can be used to track progress on PCSD, depending on the elements of policy coherence to be monitored (Table 2.3). PCSD indicators could look at: i) functions and capacities to formulate coherent policies (e.g. institutional mechanisms, including budgetary factors); ii) the ways in which policies across economic, social and environmental areas interact in achieving sustainable development outcomes (e.g. fostering synergies and addressing trade-offs); iii) changes in institutional and policy performance as a result of PCSD (e.g. policy outcomes); and iv) the resulting impact of policies on sustainable development “here and now”, “elsewhere” and “later”.

Table 2.3. Some examples of indicators that could be used to track progress on different elements of PCSD

Elements of coherence

Indicators

Institutional mechanisms

Process indicators that describe ways in which policy coherence is enhanced. These could include:

  • Public commitment (backed by legislation).

  • Priorities and a specific action plan (including interlinks between different governance levels: local, national and international).

  • Inter-ministerial coordination and involvement of multiple stakeholders.

  • Capacity to analyse policy interactions and effects.

  • Analysis of policy coherence (specific issues)

  • Monitoring and reporting systems

  • Policy efforts, and budgetary measures

Policy interactions

A combination of indicators to capture the linkages and trade-offs between economic, social and environmental values and identify trends, e.g.: the rate of deforestation due to agricultural expansion. These could include:

  • Resource indicators, e.g. intensity of water use; forest resources (net change, intensity of use)

  • Consumption

  • Capital stocks (economic, natural, social, human)

  • Wellbeing indicators.

Policy outcomes

Measures that describe the results/changes achieved through policies, in particular changes that contribute to foster:

  • Equitable access to resources

  • Efficiency in the use of natural resources (energy, land, water, mineral, etc.)

  • Sustainability

  • Enabling environments for sustainable development (a fair and well-functioning global trading system, a more transparent global tax system, stable financial systems, equitable access to knowledge, innovation and technology, responsible investment, effective climate action, etc.)

Policy effects

Sets of indicators to provide information on the effect of policies according to the following conceptual dimensions of sustainable development:

“Here and now” dimension

  • Well-being indicators, including economic, social and environmental aspects (Nutrition, health, labour, education, etc.)

“Elsewhere” dimension (the impact that one country or region has on other parts of the world).

  • ODA,

  • imports from less-developed countries

  • Migration of human capital

  • Trans-boundary contributions to footprints on land/water/carbon

  • Imports of energy/ mineral resources

  • Exports of physical/ knowledge capital

  • Foreign Direct Investment

  • Contribution to international institutions

“Later” dimension (how much economic and financial, natural, human and social capital the current generation leaves for future generations so that they can pursue their well-being).

  • capital stocks (that should be preserved for future)/long-term drivers (economic capital, natural capital, human capital, social capital)

Adapting existing PCD monitoring frameworks to the new agenda requires addressing the following basic questions:

  • Have specific indicators been identified at the national level to measure progress on PCSD?

  • Is the monitoring system considering the whole policy-making cycle (identification, formulation, adoption, implementation and assessment)?

  • Have indicators been identified to address all elements of PCSD (functions and capacities, policy interactions in achieving SD outcomes, and policy effects)?

  • Are trans-boundary and long-term effects taken into account?

Measure policy interactions (synergies and trade-offs)

There are deep interconnections among SDGs and targets that need to be identified and addressed for effective implementation and monitoring. Goal areas in the SDG framework overlap and many targets might contribute to several goals (ICSU-ISSC, 2015). Identifying and understanding the different types of interactions between goals and targets will help policy makers to maximise synergies and exploit win-wins (pursuing multiple objectives at the same time); avoid potential policy conflicts (pursuing one policy objective without undermining others); manage trade-offs (minimising negative impacts on other policies); and ultimately design policies that generate multiple co-benefits for sustainable development.

A number of steps can be taken to develop a series of PCSD indicators at national level to capture synergies and trade-offs:

First: Map out critical interactions across the 17 SDGs and 169 targets. Analysis on the different types of interactions within the SDGs can be carried out through inter-ministerial (or cross-sectoral) consultations. This should involve expert policy officers and stakeholders in different sectors to stimulate discussions on the scope of sustainable development challenges, not sectoral challenges. Box 2.17 provides an example of how such consultations might be organised. The focus should be on areas where inter-linkages are well known, and where possibilities for synergies, conflicts and trade-offs are high. Diverse methodologies could be used to map out interactions such as network analysis or nexus approaches. Analysis by the Stockholm Environment Institute based on the water-energy-food nexus, for example, shows three main types of interactions between targets in the SDG framework: i) some are interdependent, one target has to be realised in order for another to be viable; ii) other targets impose conditions or constraints on one another; and iii) some targets reinforce each other, highlighting potential synergies (Weitz N., M. Nilsson and M. Davis, 2014). Mapping exercises should identify the nature of the different interactions, but also consider enablers and disablers, i.e. the drivers behind synergies and trade-offs.

Box 2.17. Learning to navigate the SDGs

The OECD’s PCSD unit has conducted exercises to help map out critical interactions across the SDGs and transpose this awareness into a coherent policy making process. In a role playing exercise participants – preferably from diverse backgrounds (different ministries, NGOs, businesses, etc.) – are asked to explore policy options to address key cross-cutting issues in the SDG framework (e.g. water-energy-land nexus in achieving food security). It consists of three phases:

  • In Phase 1, different sectoral groups (water, energy, food, climate, urbanisation, etc.) are formed and tasked with addressing a specific sectoral challenge. The discussion is supported by a background note providing a global and national context, and summarising relevant evidence-based analysis. The groups analyse their problem with reference to the SDGs, identify priorities for action, and pivotal links, which help them to comprehend and navigate the integrated nature of the SDG framework. They proceed to draw up, discuss and agree on a number of priorities and recommendations within their specific policy sector.

  • In Phase 2, the groups are reshuffled into an “interdisciplinary task force” comprising “sectoral experts” from each sectoral group. Now, participants are asked to outline and defend their specific sectoral priorities and policy proposals. The ensuing discussion will most likely bring to the fore the multiple interactions between the different priorities and actions proposed: Some objectives will clash, whereas others will harmonise. The groups will then have to harness the complex SDG framework in order to reconcile the different objectives, attempt to turn inconsistencies into synergies, and take a deliberate choice where a win-win situation is out of reach.

  • In Phase 3, the groups identify and discuss institutional mechanism and practices required for managing cross-cutting issues, considering unintended consequences of policies (ex ante, during, and ex post), and tracking progress.

The experience from recent workshops demonstrated that this quick mapping exercise greatly helps participants to understand the complex nature of the challenges addressed in the SDGs and the paramount importance of policy coherence for breaking the silos and strengthening collaboration across sectoral boundaries. The exercise has proved to be useful for identifying sectoral priorities, examine their inter-linkages and implications, and reconcile potentially conflicting policy targets.

Second: Prioritise PCSD areas based on the critical interactions identified through the mapping exercise. Special attention should be paid on areas where fundamental trade-offs need to be managed. Engaging key actors and stakeholders in the priority-setting process will be fundamental to mobilise action, as highlighted in the section above on “Institutional framework: breaking out of policy silos”.

Third: Review data availability and take stock of existing indicators at the national level for measuring interactions (synergies and trade-offs) with high potential for impact. The analysis from the mapping exercise could be used to set a baseline for the proposed indicators. A combined presentation of indicators from different disciplines can help to capture interactions as well as key trends, and draw attention to selected policy coherence issues. Indicators to track progress on PCSD will necessary vary from country to country depending on their natural attributes, economy, institutional setup, and political and social variables. While countries may use different range of indicators to track progress on PCSD, some common indicator sets could be identified for cross-country comparisons and peer reviews. Table 2.4 provides some examples of how PCSD indicators could be developed using a combination of diverse indicators to capture synergies and trade-offs for the implementation of SDGs.

Table 2.4. Examples of PCSD indicators to consider policy interactions

Interactions among SDGs/Targets

Policy interaction identified

Type of interaction

Suggested PCSD indicators

Desired trend

OECD Data sources

Between SDG7.2 increasing the share of renewable energy, and SDG2.1 ending hunger

These targets could potentially conflict if food crops and biofuel production compete for the same land/or irrigation water.

Trade-off

Number of hectares of arable land diverted from the production of food to the production of biofuel feedstock.

Based on:

  • Agricultural land use

  • Agricultural production

  • Water resources

  • Biofuels support

Decrease

  • Environmental Database.

  • Biofuels Support Policy Database.

Between

SDG12c phasing out harmful subsidies,

SDG7.2 increasing the share of renewable energy,

SDG7.3 improving energy efficiency,

SDG3.9 reduce deaths from air pollution,

SDG11.6 air quality in cities, and

SDG13 combat climate change

Removing inefficient fossil fuel subsidies and investing in renewable energy sources and energy efficiency can have substantial benefits to climate, but also to public health by decreasing GHG emissions, air pollution levels, and thus contributing to reduce deaths and diseases from air pollution.

A fuel subsidy reform could also offer fiscal space to extend social programmes.

Synergy

The amount of revenue raised from fossil fuel subsidy reform used in renewable energy /social programmes.

Number of people exposed to air pollution from gases, nitrous oxides (NOX), volatile organic compounds (VOCs) sulphur dioxides, and particles.

Based on:

  • Total support for fossil fuels

  • Green Growth Indicators

  • Renewable energy indicator

Increase

Decrease

Inventory of Support Measures for Fossil Fuels

  • Indicators for CO2 emissions

  • Greenhouse gas emissions by source

  • Emissions of air pollutants.

  • Energy efficiency indicators

Measuring interactions across policies in the implementation of the SDGs, entails addressing the following questions:

  • Have the critical interactions across SDGs and Targets been mapped out? Have potential synergies and trade-offs been identified? Have PCSD priority areas been identified based on these interactions?

  • Can existing indicators at national and subnational level be used to capture policy interlinkages and examine co-relations across sectors (e.g. rate of deforestation due to agricultural expansion)?

Take into account global effects

Nationally-based efforts to track progress on policy coherence for sustainable development should consider the impacts of domestic policies on global sustainability (trans-boundary effects). Country specific indicators need to be complemented by measures of economic, environmental and social externalities imposed beyond national borders. This refers to the “elsewhere dimension” highlighted in the section on the “Analytical framework”, i.e. how the actions of one government or region affect their neighbours or other countries or regions. Examples are the environmental indicators of embedded carbon flows that measure the import of products with significant carbon content. These indicators show the impact of countries on the stratosphere through the production and consumption of CO2. In this context, tracking progress on coherence entails looking at changes in policy performance over time, for example efforts towards the elimination of inefficient subsidies that encourage production and consumption of fossil fuels – the main human activity that emits CO2 – which undermine efforts to deal with climate change.

Diverse set of indicators have been proposed to measure the “elsewhere” dimension of sustainable development. Examples of indicators are the so-called footprint indicators, which calculate the environmental pressure attributable to consumption in one country on resources abroad (UNECE/OECD/Eurostat, 2014).

Consider inter-generational aspects and long-term impacts

A basic principle of sustainable development is to balance the needs of current and future generations. This calls for a long-term perspective in policy-making about the consequences of today’s decisions and activities as reflected in the preamble of the 2030 Agenda for Sustainable Development.

In many cases the time frames of government’s plans or strategies are too short to take into account intergenerational and long-term considerations. Achieving the SDGs requires national strategies with long timeframes for implementing notions of intergenerational equity, which is a key principle of sustainable development. Tracking progress on PCSD in the context of national strategy implementation requires using indicators that capture the long-term impact of current decisions, policies and behaviours. This refers to the “later” dimension of sustainable development. Diverse set of indicators have also been proposed to measure this dimension (UNECE/OECD/Eurostat, 2014).

The Netherlands provides an example of how the “later” dimension can be captured in monitoring systems through its Sustainability Monitor. The system includes a conceptual (56 indicators) and thematic categorisation (129 indicators) to measure sustainable development and rank countries within the European Union. The conceptual categorisation is divided into the “here and now” (quality of life), “later” (resources) and “elsewhere” (Netherlands in the world) with indicators showing the trend and the comparison among countries of the European Union. Using colour coding, the visualisation helps to make clear the trade-offs between the “here and now”, “later” and “elsewhere”, and thus communicate the sustainability of the actions. The Monitor also show the thematic categorization based on fourteen themes, such as “education and knowledge or R&D expenditure” (UNECE/OECD/Eurostat, 2014, pages 181-183).

Modelling tools can also be used to assess policy coherence considering a long-term perspective. For example the OECD ENV-Linkages model assists governments in analysing the medium- and long-term implications of policy shifts that require significant resource reallocation across sectors and countries, as well as the associated spill-over effects. The model links economic activity to environmental pressures, specifically to greenhouse gas (GHG) emissions. The model projects economic activities and emissions several decades into the future to shed light on the impacts of environmental policies.1

Annotations

What is Policy Coherence for Sustainable Development (PCSD)?

The OECD Strategy on Development launched by Ministers in 2012 has contributed to a new definition of “Policy Coherence for Sustainable Development (PCSD)”. The perspective has shifted from “donor-centred” and limited “do no harm” perspectives to a ‘partnership approach’ engaging key actors and stakeholders among advanced, emerging and developing economies, and with a greater emphasis on sustainable development. The Strategy has underscored the need for more proactive approaches focused on building synergies across actors and sectors to address common challenges, such as creating enabling conditions for achieving food security and curbing illicit financial flows, which are considered international priorities in the SDG framework.

For the purposes of this Framework, Policy Coherence for Sustainable Development (PCSD) is an approach and policy tool to integrate the economic, social, environmental and governance dimensions of sustainable development at all stages of domestic and international policy making. As policy tool, PCSD aims to increase the capacities of governments and stakeholders to identify synergies, consider trade-offs between multiple and sometimes conflicting objectives – for example between economic growth, environmental protection and reduction of carbon emissions – and address potential spillovers of domestic policies (Figure 2.3).

Figure 2.3. Policy Coherence for Sustainable Development (PCSD)
picture

Source: OECD (2015), Better Policies for Development 2015: Policy Coherence and Green Growth, OECD Publishing, Paris.

The new definition of PCSD aims to respond to the vision and multi-sectoral and integrated nature of the 2030 Agenda for Sustainable Development. The implementation of the SDGs requires breaking out of policy silos and greater involvement of key actors and stakeholders. PCSD recognises that the integration of the different dimensions of sustainable development represents one of the most difficult balances to achieve in policy making and implementation. In practice, many national sustainable development strategies launched as part of Agenda 21 signed at the United Nations Conference on Environment and Development (the Rio Earth Summit) in 1992, have had a greater focus on environmental issues with attempts to incorporate economic aspects.

The concept of PCSD captures the core elements of sustainable development. According to the most commonly accepted definition, sustainable development refers to “development that meets the needs of the present without comprising the ability of the future generations to meet their own needs”.2 Sustainable development encompasses economic, social and environmental aims (dimensions), which are considered interdependent and mutually reinforcing.

Sustainable development entails making choices between using resources to maximise current human well-being or preserving resources for future use; or between maximising the human well-being of one country at the expense of others (UNECE/OECD/Eurostat, 2014). It requires consideration and balance of multiple and potentially competing objectives, such as: inclusive economic growth, social wellbeing and good governance, and environmental protection.

The pursuit of sustainable development requires changes in many policy sectors and ensuring coherence between them. In addition to this, a basic tenet of sustainable development is to balance the needs of current and future generations which demands a long-term perspective in policy-making about the consequences of today’s decisions and activities.

Shifting from PCD towards PCSD

The OECD Strategy on Development has emphasised the critical function that policy coherence for development (PCD) can play as a whole-of-government tool to cope with increasingly complex economic, social and environmental challenges and to address their interconnectedness. Key questions, however, are whether current PCD approaches can effectively support countries to implement a more ambitious set of universal, integrated and transformative sustainable development goals, and if current PCD tools are designed to foster sustainable development outcomes and look at the long-term impact of policies.

Moving from PCD to PCSD is consistent with the transition from MDGs to SDGs. The world has changed profoundly since the early 1990s when the notion of PCD emerged in a context of a growing international concern with aid effectiveness. In the mid-90s the international donor community committed to “achieve coherence between aid policies and other sectoral policies which impact on developing countries”. Current approaches are founded upon the notion that PCD is a responsibility mainly for developed countries. The underlying assumption is that the objectives and results of a government’s (aid provider) development policy can be undermined by other sectoral policies in areas with important cross-border dimensions such as trade, investment, and agriculture, and can have negative impacts on the development prospects of developing countries (aid recipients).

PCD approaches have been instrumental in raising awareness and building commitment in OECD countries. However, efforts have been mainly focused on setting up institutional mechanisms and practices, giving prominence to processes rather than the impact of domestic policies on development. The experience of more than a decade of assessing “beyond aid” issues in the DAC peer reviews has shown that progress is limited. Institutional mechanisms (the “three building blocks for PCD”) are and continue to be necessary to raise awareness and build efficient decision-making, but they are not sufficient to deliver more coherent policies in practice.

Efforts to improve understanding of incoherence and promote PCD have also been carried out on a sector-by-sector basis. Analysis has looked at issues with important cross-border dimensions, such as trade, agriculture, investment, environment, technology, migration, amongst others, but without giving due attention to the inter-sectoral, inter-linkages and the multidimensionality of development challenges. Considerations have primarily adopted a “do no harm approach” putting emphasis on the negative impact of developed countries sectoral policies on the prospects of developing countries.

The global development landscape has changed dramatically since the concept of PCD emerged almost three decades ago. The North-South dichotomy has become blurred, as developing countries – particularly emerging economies – play an increasingly important role in international finance, investment, trade, innovation and development co-operation. It is increasingly recognised that approaches need to evolve to respond to a more complex context in which all stakeholders and all countries play a key role in enabling sustainable development, regardless their level of development.

Although it is recognised that institutional mechanisms and practices for promoting PCD are necessary to raise awareness and build efficient decision-making in donor countries, they are not sufficient to deliver more coherent policies in practice. Complementary and more targeted actions are needed to enhance coherence for sustainable development.

Against this background, the OECD Strategy on Development has encouraged a broader approach to PCD as a way to ensure progress as well as to address key global issues such as global food security and illicit financial flows. Applying a broader PCD lens to these areas has generated significant lessons for adapting current approaches to the new 2030 Agenda for Sustainable Development (Box 2.18).

Box 2.18. Lessons learned on PCD from the OECD Strategy on Development

The Strategy has helped bring about a broader approach to PCD, which will entail the following shifts:

  • Move away from generalities to an “issues-based” focus on common challenges, such as improving framework conditions for achieving global food security.

  • Consolidate, but go beyond institutional mechanisms, and take into account international level coordination.

  • Move away from a donors only emphasis to engaging key actors in advanced, emerging and developing countries.

  • Go beyond the negative impacts of non-aid policies (“do-no harm”) towards more proactive approaches based on synergies across sectors.

  • Recognise the importance of PCD across all levels (local, national regional and global).

  • Shift the focus from sectoral to more integrated cross-sectoral approaches to capture the dimensions of sustainable development in a holistic manner.

  • Recognise the role of PCD to inform policy making, not prescribe (Identify win-win scenarios to engage in dialogue on common solutions).

Source: 2014 Report on the implementation of the OECD Strategy on Development (C/MIN[2014]14).

A new analytical framework for understanding and applying policy coherence for sustainable development

It is recognised that a new analytical framework needs to go beyond the PCD Building Blocks, donor-centred and “do no-harm approaches”, and to take into account the universal, integrated and transformative nature as well as the centrality of sustainable development in the 2030 Agenda.

The universal, integrated and transformative nature of the new agenda requires governments to be able to work across policy domains, actors and governance levels. It involves a significant shift in the way policy-making and policy coherence is approached:

  • A universal agenda entails recognising that we are no longer in a MDG world divided between donors and recipients. All countries face difficulties in addressing the sustainable development challenges ahead. Actions by governments, international institutions, private sector, and civil society to achieve SDGs and targets need to be adapted to the specific context, capacities and needs of each country.

  • An integrated agenda requires coherent policy-making to ensure a balanced approach to the economic, social and environmental dimensions of sustainable development in policy-making (horizontal coherence). It requires breaking out of sectoral silos and adopting integrated approaches to consider more systematically complex inter-linkages (such as the water-energy-food nexus), trans-boundary and intergenerational impacts, and trade-offs at different policy levels. As the SDGs overlap and targets interact, policy coherence is fundamental to ensure that progress achieved in one goal (e.g. water) contributes to progress in other goals (e.g. food security or health).

  • A transformative agenda involves aggregated and coherent actions at the local, national, regional and global levels (vertical coherence). This is critical in an increasingly interconnected global economy where systemic risks have inextricable global-domestic linkages that need to be managed. Some of the sustainable development challenges need to be addressed at the global level (e.g. climate change and other systemic risks); at the national or regional level (e.g. legislative changes, economic transformations needed for climate change mitigation or adaptation, or changes in fiscal and trade policy); and at the local level (e.g. specific details on land use; human settlement patterns, or transportation planning).

The analytical framework introduced in this chapter (Figure 2.4) provides key elements that need to be borne in mind when analysing policy and institutional coherence for sustainable development in the implementation of the SDGs. It aims to inform decision-making and support policies that systematically consider:

  1. the diverse roles of different actors at different levels (governments, international organisations, private sector and non-governmental organisations), as well as the diverse sources of finance – public and private, domestic and international – for achieving sustainable development outcomes;

  2. the policy inter-linkages across economic, social and environmental areas, including the identification of synergies, contradictions and trade-offs, as well as the interactions between domestic and international policies;

  3. the enabling and disabling conditions that influence policy performance and outcomes, i.e. the enablers (that can contribute to) and disablers (that hamper) sustainable development at the global, national, local and regional levels; and

  4. the policy effects on the well-being in any one particular country (“here and now”), for people living in other countries (“elsewhere”), i.e. trans-boundary impacts; and for future generations (“later”).

Figure 2.4. Analytical Framework for Policy Coherence for Sustainable Development
picture

Source: OECD (2015), Better Policies for Development 2015: Policy Coherence and Green Growth, OECD Publishing, Paris.

Key Elements for PCSD Analysis

  • Actors are governments at all levels, parliamentarians, civil society, business and industry, philanthropists, international organisations, bi-lateral and multi-lateral agencies, among others, that are involved and/or influence policy-making and implementation.

  • Policy inter-linkages are channels through which policies influence each other’s performance and objectives. Interconnections also include contextual factors, such as:

    • Systemic conditions (disablers) are the set of social, political, economic, environmental and institutional conditions at the national and international levels that affect sustainable development and have a significant influence in policy performance and outcomes.

    • Enabling environments (enablers) are the set of necessary and interrelated conditions in the political, legal, economic, and social domains that can influence positively policy outcomes.

  • Policy inputs are institutional factors such as resources, including knowledge, expertise and capital assets that feed into the policy making process.

  • Policy outputs are goods or services provided by governments to their citizens.

  • Policy outcomes are intended changes in society that governments seek to generate through laws, policies or offcial directives.

  • Policy effects are economic, social, and environmental impacts resulting from the implementation of policies (high-level outcomes). They refer to effects on the wellbeing of the present generation in one particular contry (“here and now”); effects on the wellbeing of people living in other countries (“elsewhere”), and effects on the wellbeing of future generations (“later”).

Policy coherence in the implementation of the 2030 Agenda for Sustainable Development

Effective implementation of a universal, integrated and transformative 2030 Agenda for Sustainable Development requires a high degree of policy coherence at multiple levels. Policy (and institutional) coherence for sustainable development (SDG17:14) is part of the means of implementation (MoI) for all SDGs. The SDGs and targets, which are a set of internationally agreed priorities for the next fifteen years, provide the objectives to guide policy coherence for sustainable development going forward.

The OECD, based on the definition provided above, and on the analytical framework introduced in this section, has identified five complementary levels of coherence that need to be addressed in the implementation of the SDGs (Figure 2.5). Governments as well as other stakeholders, depending on their particular circumstances, will have to prioritise and focus on those levels of coherence that require greatest attention for ensuring progress. These five levels emphasise vertical coherence across multiple levels of governance (from local to global); and horizontal coherence across sectors; actors including governments, private sector and civil society; and between diverse sources of finance, including public, private, domestic and international.

Figure 2.5. Five complementary levels of coherence for implementing the 2030 Agenda for Sustainable Development
picture

Source: Better Policies for Development 2015: Policy Coherence and Green Growth, OECD Publishing, Paris.

  1. Between the SDGs and national policies including at the local level. Consistent actions across multiple levels of governance at the local, regional, national and international level will be fundamental for a successful implementation of the SDGs (vertical coherence).

  2. Between the 2030 Agenda for Sustainable Development and other international agendas. The SDGs cannot be achieved without complementary actions at the global level and without supportive international normative frameworks and regimes. These international frameworks are critical for creating international enabling environments through: a fair and well-functioning global trading system, a more transparent global tax system, stable financial systems, equitable access to knowledge, innovation and technology, responsible investment, effective climate action, amongst others.

  3. Between economic, social and environmental policies. The 2030 Agenda needs to be implemented in a way that synergies can be realised across the environmental, social and economic dimensions of sustainable development. There is a need for inter-ministerial committees at the highest level to understand key policy linkages, to map out plans with long-term horizons, and to link national budgets and national statistic systems.

  4. Between diverse sources of finance (public, private, international and domestic). One of the main challenges in achieving the SDGs will be to increase and mobilise private investments, and a PCSD approach can help countries reduce inefficient legal and policy barriers in order to enhance synergies between the provision of ODA and private financial sources.

  5. Between actions of multiple actors (governments, international organisations, civil society and the private sector). Multi-stakeholder partnerships, including public-private partnerships can help mobilise resources, collective action and means for creating the necessary enabling environments to achieve the SDGs.

OECD Ministerial Declaration on Policy Coherence for Development (C/MIN(2008)2/FINAL).

Approaches to Assessing Policy Coherence for Development: A Summary of National and Expert Views (SG/PCD(2009)3).

Framework and Assessment Methodology for Policy Coherence for Development (SG/PCD(2009)4).

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Notes

← 1. See: www.oecd.org/environment/indicators-modelling-outlooks/modelling.htm.

← 2. World Commission on Environment and Development, (Brundtland Commission), 1987, Our Common Future, Oxford University Press, Oxford, United Kingdom..