Report

Tracking trends in Official Development Assistance towards green employment and skills promotion programmes

This report presents approaches to track Official Development Assistance flows toward employment and skills promotion programmes directed towards green sectors and greening traditional sectors, thereby enabling the G7 to assess compliance with its 2022 commitment

This report, Tracking Trends in Official Development Assistance Toward Green Jobs and Skills, analyzes the flows of Official Development Assistance (ODA) directed at promoting employment and skill development in green sectors and the greening of traditional sectors. Commissioned to support the G7’s commitment to increasing ODA for green employment by 2025, the study explores and refines methodologies for tracking these financial flows. Using data from the OECD Creditor Reporting System (CRS), it combines sectoral purpose codes with green policy markers to classify ODA projects. Additionally, the report leverages large language models (LLMs) for semantic text analysis, offering a dynamic approach to identify green projects through advanced text embeddings. The findings reveal trends in green ODA from 2016 to 2022, highlighting contributions from G7 and European Commission donors. Key recommendations are provided for improving the accuracy and consistency of ODA reporting for green jobs and skills, emphasizing the importance of robust methodologies and comprehensive data for tracking international development commitments.

In 2022, during the Germany presidency of the G7, the groups’ Leaders committed to increase, by 2025, the share of their country’s official development assistance (ODA) employment and skills promotion programmes that is directed specifically towards green sectors and greening traditional sectors, in alignment with emerging and developing partner countries’ strategies and subject to G7 budgetary processes. The commitment also encouraged the development of a harmonized, lean approach for the monitoring and evaluation of respective programmes’ impacts of G7 ODA by 2030. Following from this, the German Federal Ministry for Economic Cooperation and Development (BMZ) asked the ILO, in collaboration with Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ), to develop a methodology for tracking the ODA commitment, and to work on a framework to measure impact of ODA in both technical cooperation and financial cooperation.

The work on the ODA tracking methodology was done in several stages. First, a methodology was proposed and discussed with G7 representatives, at the occasion of G7 Dialogue Forum on 16 November 2022. The main approach, to be applied to the OECD Development Assistance Committee (DAC) database of development commitment and disbursements, was based tracking commitments pertaining to a selection of creditor reporting system (CRS) codes and green markers.

The ILO then took steps to refine and test the approach to track the ODA commitment at national levels. This resulted in the development of an “Indicator Specification Sheet” that was presented in June 2023 in a G7 Technical Workshop “Measuring green jobs and skills in G7 official development assistance (ODA)”. The sheet gives an orientation in applying the CRS method to OECD data as well as national data. Building on these efforts, ILO collaborated with experts from the university of Glasgow and the Keil Institute for the World Economy. The ILO requested to apply two approaches to track the G7 objective: The first based on applying the CRS codes and green markers; and the second through a Large Language Model (LLM) analysis. The LLM approach was applied to support validation and offer additional insights into the results of the analysis provided by CSR codes. Running this approach in parallel on the same data set also serves to inform G7 partners as to how to best leverage LLM approaches in future for quick processing and analysis of textual data and allowing for a comprehensive and timely understanding of ODA trends.

The report presents the respective methodologies and findings stemming from both approaches, and recommendations for the continued measuring of the commitment.

Contact: Gaëla Roudy Fraser, Project Manager, EMPLAB