2001 Environmental Sustainability Index

1. 2001 Environmental Sustainability Index Or, Can you really measure the unmeasurable? March 1, 2001 Columbia Engineering School

2. Partners • World Economic Forum, Global Leaders for Tomorrow Environment Task Force • Yale University Center for Environmental Law and Policy • Columbia University Center for International Earth Science Information Network

3. Key Findings • Measuring Environmental Sustainability is Possible • ESI Ranks 122 countries • Based on 67 empirical measurements • Economic conditions are important, but not a fundamental policy constraint • Among countries at similar income levels, there is no correlation between GDP/capita and ESI. • Data limitations present severe constraint on shift toward more analytically rigorous environmental decision-making

4. ESI’s Purpose: • Benchmark environmental performance • Identify comparatively environmental results that are above or below expectations • Identify “best practices” • Investigate interactions between environmental and economic performance

5. Part of broader movement to measure sustainability • UN Commission on Sustainable Development • OECD • Rio + 10 initiatives • Consultative Group on Sustainable Development Indicators • Corporate-level efforts • Global Reporting Initiative • WBCSD • National and Local efforts

6. 2001 Rankings G:\Davos2001\Map_AV\esi 2001_map.jpg

7. Top Quintile 13 France 14 Uruguay 15 Germany 16 United Kingdom 17 Ireland 18 Slovak Republic 19 Argentina 20 Portugal 21 Hungary 22 Japan 23 Lithuania 24 Slovenia 25 Spain 1 Finland 2 Norway 3 Canada 4 Sweden 5 Switzerland 6 New Zealand 7 Australia 8 Austria 9 Iceland 10 Denmark 11 United States 12 Netherlands

8. Bottom Quintile 98 Kyrgyz Republic 99 Bangladesh 100 Macedonia 101 Togo 102 Algeria 103 Benin 104 Burkina Faso 105 Iran 106 Syria 107 Sudan 108 China 109 Lebanon 110 Ukraine 111 Niger 112 Philippines 113 Madagascar 114 Vietnam 115 Rwanda 116 Kuwait 117 Nigeria 118 Libya 119 Ethiopia 120 Burundi 121 Saudi Arabia 122 Haiti

9. Middle 3 Quintiles 26 Costa Rica 27 Estonia 28 Brazil 29 Czech Republic 30 Bolivia 31 Chile 32 Latvia 33 Russia 34 Panama 35 Cuba 36 Colombia 37 Italy 38 Peru 39 Croatia 40 Botswana 41 Greece 42 Zimbabwe 43 Nicaragua 44 Ecuador 45 South Africa 46 Mauritius 47 Venezuela 48 Armenia 49 Gabon 50 Mongolia 51 Sri Lanka 52 Malaysia 53 Israel 54 Paraguay 55 Fiji 56 Central African Republic 57 Belarus 58 Poland 59 Moldova 60 Bulgaria 61 Guatemala 62 Papua New Guinea 63 Ghana 64 Honduras 65 Singapore 66 Nepal 67 Egypt 68 Trinidad and Tobago 69 Azerbaijan 70 Turkey 71 Mali 72 Dominican Republic 73 Mexico 74 Thailand 75 Bhutan 76 Cameroon 77 Mozambique 78 Albania 79 Belgium 80 Romania 81 Uganda 82 Kenya 83 Tunisia 84 El Salvador 85 Pakistan 86 Indonesia 87 Senegal 88 Jamaica 89 Morocco 90 Uzbekistan 91 Kazakhstan 92 Malawi 93 India 94 Tanzania 95 South Korea 96 Jordan 97 Zambia

10. Methodology: Guiding Principles • Create ESI in a systematic, transparent, and reproducible manner. • Be faithful to scientific literature as well as relevant to the major policy debates. • Be applicable to a wide range of situations and conditions. • Make use of what can actually be measured today but leave room for movement tomorrow.

11. Environmental Systems 5 Core Components Environmental Stresses Social and Institutional Capacity Global Stewardship Human Vulnerability • 22 Indicators • Air Quality • Water Quantity • Water Quality • Biodiversity • Terrestrial Systems • Reducing Air Pollution • Reducing Water Stress • Reducing Ecosystem Stress • Reducing Waste and Consumption Pressures • Reducing Population Stress • International Commitment • Global-Scale Funding/Participation • Protecting International Commons • Science/Technology • Capacity for Debate • Regulation and Management • Environmental Information • Eco-Efficiency • Reducing Public Choice Failures • Private Sector Responsiveness • Basic Sustenance • Environmental Health

12. Adding it all up • For each of the 22 indicators, we identified 2-6 variables to serve as quantitative measures (67 total) • We weighted the indicators equally in computing the Index 67 variables 22 indicators Index

13. Example: environmental health

14. Variable scores are averaged to get indicator scores

15. ESI 2001 Makes Country-Level Data Available • ES • 122 countries • Across 22 indicators • With reference to income-based peer groups

16. ESI Ranking

17. 5 Core Components

18. 22 indicators

19. Analysis • Spot broad patterns • Identify successful (and failing) policies • Explore correlations between environment and other factors (corruption, income, population) • Specify causal relationships and drivers of good environmental performance

20. Example: Analysis of Economy-Environment Relationship • Does environmental sustainability rise or fall with growing income? • Can poor countries afford good environmental performance? • Does strong environmental performance harm national competitiveness?

21. Does environmental sustainability rise or fall with growing income? In general, higher levels of income are associated with higher ESI scores 90 Canada 80 70 France UK USA Russia Japan Germany 60 Italy 50 India 40 China 30 ESI 20 0 10000 20000 30000 40000 GDP per capita (PPP), 1998

22. But richer countries aren’t good at everything

23. Can poor countries afford good environmental performance? .

24. 90 Canada 80 70 USA France UK Germany Japan 60 Russia Italy 50 India 40 China ESI 30 60 50 40 30 20 10 0 2000 Current Competitiveness Index Does strong environmental performance harm national competitiveness?

25. Innovest rankings surprisingly highly correlated with ESI

26. Corruption also highly correlated • Query: How many corporate sustainability reports document levels of corruption?

27. Conclusions

28. Next steps • Support efforts at major improvement in data creation and collection • Interactive version of ESI • More work at integrating information at different scales • Build capacity for consistent measures over time

29. Post-Davos fallout, banal • Attack of the green meanies • ESI is “meaningless noise” • Related criticism from other “narrower is better” quarters • Shallow Hurrah-ism • “We’re number 3!” • “We’re less horrible than we first thought!” • Sulking bitterness • “The hell-hole that is Belgium”

30. Post-Davos Fallout-interesting • Potential coordination with other indicator efforts in development • National • International (CSD, CSGDI, Rio+10) • City-based indicators • Regional (NAFTA, Mercosur, Asia, …) • Discussion about intensive efforts at database creation • Global map of wilderness areas • Global water quality index • Firm-level indicators • Discussion about potential applications of ESI • Linked to investment instruments (green bond fund, CDM) • Research tool (Kuznets curves; geographic influences)

31. Where do firms fit in? • Potential users of the Index • Many aspects are relevant to business climate and risk analysis • Government subsidies • Transparency and consistency of environmental regulations • Corruption • Quality of life measures

32. Where do firms fit in? • Potential suppliers of data to the Index • Often firms have access to high quality, relevant information • Effectiveness of regulations, local practices concerning waste disposal and treatment, water quality, etc. • Firms that wanted to could collect basic environmental information and provide it to a global clearinghouse

33. Where do firms fit in? • Strong interest in including firm-level information in future ESI • Useful national indicator (do some countries do better than others at promoting firm-level environmental innovation?) • Useful global stewardship indicator (which firms are helping to strengthen national sustainability efforts, which are taking advantage of weak ones?) • Most frequently suggested addition to 2000 ESI was “private sector responsibility” measure • Often firm-level activity is the most scientifically relevant scale • There is much more relevant firm-level information collected than will ever be reported publicly. • Are there creative strategies for liberating, filtering, and providing controlled access to some of that information?