Share the page
Research on ecological transitions
Published on
Our research uses analysis tools and macroeconomic models to help policymakers assess whether a country’s development path is sustainable. We also focus on sustainable finance and the role of financial actors in the transition.
In 2015, the international community adopted the Addis Ababa Action Agenda on financing for development, the Paris Agreement on climate change, and the 2030 Agenda for the Sustainable Development Goals (SDGs). These agreements lay the foundation for a new way of understanding development—at the intersection of economic, environmental, and social dimensions. This paradigm shift calls for rethinking how planetary boundaries are integrated into development pathways, as well as the role of financial actors.
Understanding development trajectories
We support research aimed at providing policymakers and citizens with reliable tools and analyses to assess whether a country’s development path is sustainable—or not.
Despite over fifty years of scientific work and numerous international summits, it remains difficult to evaluate the state of the environment in a simple and rigorous way. Existing analytical tools often suffer from key limitations: incomplete definitions of environmental sustainability, lack of relevant data or indicators... This uncertainty makes it all the more challenging to assess development trajectories, especially in the context of collapsing biodiversity and major climate disruptions.
To ensure that sustainable development commitments are truly met, we advocate for a robust and demanding approach to sustainability in development trajectories: the strong sustainability approach. The analytical tools we develop reflect and support this vision.
This approach is based on three key guiding principles:
- The a priori refutation of substitutability between natural capital, social capital, and economic capital;
- Using multidimensional analysis to identify both synergies and possible tensions between different objectives and indicators;
- The importance of building a social construct around what constitutes a desirable state of the environment and society—and the pathways to achieve it.
Read the research paper to find out more:
A strong sustainability approach to development trajectories
As part of its commitment to strong sustainability, AFD supports the development of analytical tools that help better understand the interactions between the economic, ecological, and social dimensions of transition trajectories. This research contributes to the creation of scenarios that fully reflect these three pillars of sustainability.
A few tools to support decision-making:
- Measuring the environmental sustainability of a territory
The ESGAP (Environmental Sustainability Gap) indicator estimates the gap between the current state of the environment and what would constitute a “good environmental state,” based on biophysical thresholds. ESGAP helps highlight how far a country or region needs to go and serves as a decision-making tool to guide public policy toward sustainable development pathways. It has been tested in New Caledonia, Kenya, Vietnam, Colombia, and South Africa.
- Anticipating the physical impacts of climate change and environmental pressures
AFD supports research to improve understanding of the physical impacts of climate change and human pressures on natural resources, in order to anticipate their consequences for societies and ecosystems.
- Assessing financial and socio-economic risks related to nature
AFD is developing methods to assess risks associated with biodiversity loss, whether physical (related to the degradation of ecosystem services), or transition-related (linked to evolving public policies, regulations, or consumption patterns aiming to reduce pressure on nature).
These analyses also support public development banks in assessing these risks within their sovereign and non-sovereign debt portfolios.
Other research efforts focus on how to make transformative transitions operational, as called for by IPBES. This includes exploring links and tensions between various imperatives—such as biodiversity conservation, carbon emission reduction, and food security.
These projects examine, in particular:
- Environmental and climate vulnerabilities,
- Climate-related damages,
- And the mainstreaming of biodiversity into key economic sectors, such as in the ECOPRONAT research program.
Spotlight onr ECOPRONAT
The ECOPRONAT research program aims to support the emergence of a nature-positive economy, grounded in science and knowledge-sharing. Its objectives include:
- Developing knowledge and methodologies to mainstream biodiversity into AFD Group policies and sector strategies;
- Mobilizing financial resources to support these shifts;
- Building the capacities of researchers in the Global South and supporting AFD partners in managing change.
Modeling the economic impacts of transitions
Sustainable development trajectories are at the heart of many political debates: national contributions to the Paris Agreement and Net Zero trajectories, just transition objectives, alignment between climate and biodiversity goals, and more. These trajectories typically combine climatic, ecological, social, technological, economic, financial, and political dimensions.
We propose to analyze them through the lens of strong sustainability, which can be summarized in one key question: How can we stay within ecological limits, while ensuring social minimums and maintaining macroeconomic stability?
AFD has developed two quantitative modeling tools — GEMMES and ESTEEM — to study the macroeconomic dimensions of ecological transition.
Grounded in the principles of strong sustainability, these modeling frameworks incorporate financial and monetary risks related to climate change, ecological disruptions, and transition policies. They aim to support macroeconomic decision-making by factoring in the most pressing environmental challenges and systemic imbalances.
Modelling economy for a sustainable future
Mobilizing sustainable finance
In collaboration with research centers, universities, and international partners, we conduct research projects focused on the role of financial actors in the transition, and how their strategic vision, financial products, and analytical tools must adapt to a rapidly evolving landscape.
The Addis Ababa Action Agenda, the Paris Climate Agreement, and the 2030 Agenda for Sustainable Development all place strong expectations on both public and private financial sectors to actively drive change. While integrating environmental factors into investment decisions — now the dominant form of sustainable finance — is a step in the right direction, progress remains too slow.
Beyond climate concerns, this reality calls for deeper thinking: how can the financing of the SDGs provide a unified framework for development, helping to inform political choices with sound, evidence-based reasoning? Approaches based solely on financial return are no longer sufficient.
Public development banks, which sit at the intersection of public and private finance, are a first pillar of our research.
The Global Research Network (GRN)
In 2020, under the initiative of the Finance in Common coalition, AFD launched an international research group that brings together around thirty researchers and think tanks. The GRN produces original research to support informed public policy dialogue on the role and future of PDBs.
The second pillar of our research focuses on the evolving responsibility of private finance, including:
- Measuring its impact on nature and biodiversity (e.g., through the TNFD – Taskforce on Nature-related Financial Disclosures),
- Exploring the leverage effect of official development assistance in redirecting financial flows (blended finance),
- And developing new frameworks and taxonomies to quantify finance aligned with the Sustainable Development Goals.
Key numbers on our research on ecological transitions
Some research projects on ecological transitions
