Tracking Spillover Effects

Measure and promote actions to curb negative transboundary SDG impacts

What are spillover effects?

Spillovers
Spillovers effects on the global commons involve impacts generated in various countries at several stages of production and consumption. Learn more about this approach in the Global Commons Stewardship Index.

Positive and negative spillovers must be understood, measured, and carefully managed since countries cannot achieve the SDGs if spillovers from other countries counteract their efforts. In a highly interdependent world, countries' actions can have positive or negative effects on other countries' ability to achieve the SDGs. International spillover effects occur when one country's actions generate benefits or impose costs on another country that are not reflected in market prices, and therefore are not "internalized" by the actions of consumers and producers. Such spillover effects can undermine other countries' efforts to achieve the SDGs.

Global supply chains and international financial flows can generate both negative and positive spillovers. Examples of negative international spillovers include demand for commodities (such as palm oil or osy) in one country that fuel deforestation in other countries. Tolerance for poor labor standards in international supply chains that harm the poor, particularly women, in many developing countries. Examples of negative financial spillovers include those related to investments or tax havens and banking secrecy which can inhibit other countries' ability to raise the public revenues needed to finance the SDGs. Official Development Assistance (ODA), partnerships (country to country & city to city) and knowledge transfers are examples of positive spillovers. Sustainable trade practices can also promote socio-economic progress, jobs and income globally, and in particular in poorer countries.

Our work on spillovers focuses on three major aspects:

  1. Put precise numbers on trade-related negative spillovers, building on Multi-Regional Input-Output Model and Consumption-based accounting.
  2. Explore policy and regulatory levers that can help curb negative international spillovers and promote comprehensive corporate reporting.
  3. Promote a science-based dialogue between Global North and Global South countries to maximize the positive impacts of international supply chains and minimize negative environmental and social spillovers.

Our work

In cooperation with the Center for the Global Commons at the University of Tokyo, the SDSN publishes annually the Global Commons Stewardship Index which tracks each year the performance 150+ countries on their domestic and spillover impacts on the Global Commons. The International Spillover Index complements each year the global SDG Index. We also provide detailed analyses, including policy briefs and country features, to strengthen the governance of specific sectors, industries and commodities (textile, food, soy, minerals etc.). We work closely with National Statistical Institutes to strengthen spillover statistics. We also work with the business community to strengthen corporate action. Our work on international spillovers is used extensively by the public and private sector and civil society. It was used and cited for instance in the first European Parliament SDG resolution adopted with a vast majority in June 2022.

The Sustainable Development Solutions Network (SDSN) collaborates with key partners - including the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the Center for Global Commons (CGC) at the University of Tokyo, the University of Sydney and Yale University among others - to advance research on spillover data and policies in the context of the SDGs and Paris Climate Agreement.

Our most relevant publications

Paper

International Spillover Effects and Germany

Globalization has created new complexities for countries to measure and manage the environmental and social risks their economies may generate. Rich countries, given their historical responsibility for climate change and high levels of consumption, have a special imperative to ensure they are not impeding other countries’ abilities to meet the SDGs. As one of the world’s largest economies and a key player in the multilateral system, Germany’s efforts in managing its global responsibilities will be essential for the 2030 Agenda. The present study aims to provide a quantitative analysis of some of these positive and negative effects Germany has on other countries around the world as well as some of the key policy levers the country may use to manage these spillover effects.

Dashboard

Bilateral Spillovers Toolkit

The Bilateral Spillover Impacts (BSI) tool offers visual representations of a selection of bilateral social, economic, and environmental spillover effects arising from international trade or financial interactions between countries.

The BIS tool is an initiative led by the Sustainable Development Solutions Network (SDSN) and funded by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ). This project is the fruit of a long-term collaboration on the subject of spillover effects. The tool visually represents a selection of bilateral social, economic, and environmental spillovers resulting from international trade between countries.

Report

Dashboard

2022 Global Commons Stewardship Index

Taking advantage of the latest advances in MRIO trade data, environmental research, and industrial ecology, the 2022 GCS Index features a global ranking and detailed features for ten countries and regions (the USA, the EU, China, India, Japan, South Korea, Indonesia, the Phillipines, Brazil and Indonesia) alongside sector-specific analyses of spillovers embodied in trade flows, e.g. links between GHG emissions and the production of textiles and clothing in specific countries, or deforestation and logging and cattle production.

Assessing the role of economic sectors in the transfer of embodied impacts highlights the opportunities for industries, firms, and their regulators to clean up supply chains and remediate unsustainable consumption patterns.

Report

Dashboard

Sustainable Development Report Series: Spillover Index

The Sustainable Development Report features a Spillover Index that assesses the positive and negative spillover effects of each UN Member State, based on indicators tracking environmental and social spillovers embodied into trade, economic and financial spillovers, and spillover effects related to security.

Report

Tracking forced labour, accidents at work and climate impacts in EU's consumption of fossil and mineral raw materials (November 2022)

This study analyzes how consumer demand in the EU drives environmental and social impacts linked to mining worldwide. Using MRIO data, we quantify positive (i.e., income, employment) and negative impacts (GHG emissions, accidents at work, modern slavery) from the mining in raw material sectors as indicators for the UN Sustainable Development Goals. We estimate that across all sectors, goods consumed in the EU are associated with about 4200 cases of fatal accidents at work and 1.2 million cases of modern slavery annually.

Report

Study: International spillovers embodied in EU's food supply chains

Human demand for agri-food products contributes to environmental degradation from land-use impacts and emissions. Developing and implementing policy instruments to mitigate these impacts requires robust and timely statistics at the sectoral, regional and global levels. In this study, we quantify emissions (CO2, particulate matter, SO2, NO2), land use, employment and income-related impacts embodied in European Union’s (EU’s) demand for agri-food products.

Created in partnership with the University of Sydney and supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Learn more about SDSN's reports, publications and data visualizations in our library

How can spillover effects be measured?

Generally, methods for assessing international trade-related spillovers fall into three broad categories: