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2005 Environmental Sustainability Index Benchmarking National Environmental Stewardship Designing & Building an Indicator Daniel C. Esty Yale University Millennium Challenge Corporation June 24, 2005 2005 Environmental Sustainability Index Partners Constructing the ESI 76 variables 21 indicators equally weighted average 5 components ESI Score 76 Variables •Nitrogen dioxide concentration •Sulfur dioxide concentration •Ecoregions at risk •Threatened birds •Threatened mammals •Particulate concentration •Indoor air quality •Threatened amphibians •National Biodiversity Index 21 Indicators Air Quality Biodiversity •Wilderness area •Developed area •Dissolved oxygen •Electrical conductivity •Suspended solids •Phosphorus concentration •Surface water availability •Groundwater availability •Coal consumption •Nitrogen oxide emissions •Sulfur dioxide emissions •VOC emissions •Vehicles in use •Forest cover change •Acidification •Population growth •Total fertility rate •Ecological Footprint •Waste recycling rates •Hazardous waste generation •Industrial organic effluents •Fertilizer consumption •Overfishing •Sustainably managed forests •Market distortions •Deaths from intestinal infect. diseases •Child mortality rate •Pesticide consumption •Area under water stress •Salinization due to irrigation •Agricultural subsidies •Malnutrition •Safe drinking water supply •Casualties due to environmental disasters •Environmental Hazard Exposure Index •Gasoline price •Corruption •Government effectiveness •Protected land area •Environmental governance •Strength of rule of law •Civil and political liberties •Sustainable development data gaps •International environmental engagement •Environmental knowledge creation •Democratic institutions •Local Agenda 21 initiatives •Energy efficiency •Renewable energy production •Corporate sustainability (Dow Jones) •Corporate sustainability (Innovest) •ISO 14001 certified companies •Private sector environmental innovation •Participation in Responsible Care Program •Innovation capacity •Digital Access Index •Female primary education •University enrollment •Research scientists •Intergovernmental environmental activities •Role in intl. environmental aid •Participation in intl. environmental agreements Participation in International Collaborative Efforts •Greenhouse gas emissions / GDP •Greenhouse gas emissions / capita Greenhouse Gas Emissions •Transboundary sulfur dioxide spillovers •Polluting-goods imports •Child mortality due to respiratory infections 5 Components Land Environmental Systems Water Quality Water Quantity Reducing Air Pollution Reducing Ecosystem Stress Reducing Population Pressure Reducing Waste & Consumption Pressures Reducing Stresses Reducing Water Stress Natural Resources Management Environmental Health Basic Human Sustenance Reducing Human Vulnerability Exposure to Natural Disasters Environmental Governance Energy Efficiency Social and Institutional Capacity Private Sector Responsiveness Science and Technology Reducing Transboundary Environmental Pressures Global Stewardship Indicator Construction Variables Indicator Component • NO2 concentration • SO2 concentration • Particulate concentration • Indoor air quality Air Quality Environmental Systems ESI Rankings Top Ten Other Countries 1 Finland 11 Brazil 137 Yemen 2 Norway 31 Germany 138 Kuwait 3 Uruguay 33 Russia 139 Trinidad & Tob. 4 Sweden 36 France 140 Sudan 5 Iceland 45 U.S.A. 141 Haiti 6 Canada 65 U.K. 142 Uzbekistan 7 Switzerland 93 South Africa 143 Iraq 8 Guyana 95 Mexico 144 Turkmenistan 9 Argentina 101 India 145 Taiwan 133 China 146 North Korea 10 Austria Bottom Ten Key to Policy Leverage • Peer groups • Multiple perspectives – income-based – geographic – political / trade groupings – statistically derived ESI Country Scores by Quintile Bottom Quintile 4th Quintile 3rd Quintile 2nd Quintile Top Quintile Cluster Analysis: ESI Characteristic-Based Country Groupings Why Measure? • Better policy management • Improved performance and results • Benchmarking – shows what is possible • Competitiveness pressure – leaders and laggards – best practices Application in MCC Context • Supports merit-based aid • Helps clarify what is “meritorious” • Makes decisionmaking more objective But note: • No purely “objective” criteria • Data limitations are significant • Measurement challenges should not be an excuse to withhold aid Elements of effective and credible index 1. Theoretical foundation 2. Openness about strengths and weaknesses 3. Transparent methodology 4. Published data 5. Crosscheck – peer review 6. Sensitivity analysis (JRC) MCC Issues to Consider • Environment is a hard topic to capture – multidimensional issue – divergent priorities and values • Companies invest in measurement – so should MCC • A sound analytic framework cannot be developed on the cheap What to Measure? • Choices – Outcomes – Inputs (efforts) – Processes – Trends • Targets – Absolute – Relative • How to fill data gaps MCC Evaluation of Options • Seek a credible capacity to deliver • Emphasize an operational set of indicators • Stress experience and a proven track record • Look for a clear action blueprint – – – – What issues to track Where data will come from How to check/verify data Strategy for revising and updating Sensitivity Analysis • Checks the robustness of the rankings • Evaluates sensitivity to the assumptions and aggregation methods utilized The 2005 ESI is available at: www.yale.edu/esi