A Critique of the Environmental Sustainability Index

Abstract

A central issue in the context of the environment is that of its sustainability. This presumes the development of an index that encapsulates both the current state of the environment as well as its potential to provide support for future human activity. Once the broad contours are accepted the need for a measure of sustainability arises. Obviously such a measure must be general enough so as to cover various dimensions of environmental degradation and potential as well all the countries in the world. The 2002 Environmental Sustainability Index (ESI) is a significant effort in this direction. The present paper presents a critical evaluation of the ESI methodology. It is argued that the ESI has conceptual problems in its visualization of environmental degradation and sustainability. The choice of variables as well as the statistical methodology of compiling the index are also found to be wanting. This paper proposes an alternative methodology using Principal Components Analysis and argues this is an improvement upon the ESI methodology. Given the likely use of aggregate environmental indexes in future environmental management, the critique advanced in this paper is of considerable significance.

Keywords: Environmental sustainability, Principal Components Analysis

JEL Classification: Q01, Q38, Q39