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A sensitivity analysis of the Korean composite environmental index
Ecological Economics 43 (2002) 159 /174 www.elsevier.com/locate/ecolecon
ANALYSIS
A sensitivity analysis of the Korean composite environmental index Sang Mok Kang Department of Economics, University of Chicago, Chicago, IL 60637, USA Received 4 December 2001; received in revised form 17 June 2002; accepted 29 July 2002
Abstract The purpose of this paper is to carry out a sensitivity analysis of the Korean composite environmental index (CEI) by examining the CEIs computed by functional forms and those derived from opinion surveys, with a special emphasis on the assessment of weights of environmental indicators and themes: the CEIs are based on environmental themes and pressure indicators. The trends of CEIs had minor gaps according to survey types, survey years, and functional forms, but their effects on the CEI were not strong enough to alter the general trend, which is a clear deterioration of the environment. The Korean CEI has been deteriorating in proportion to economic growth. The annualized growth rate of real GDP and the annualized deterioration rate of environment for 1986 /1997 were 7.8 and 5.6%, respectively, and a linear regression of CEI on real GDP over the same period showed a close, positive relation, specifically that a 1% growth of real GDP caused a 0.7% deterioration of the environment. The principal cause of the deteriorating environment is the priority given to economic growth over environmental preservation in the Korean drive for economic development. # 2002 Elsevier Science B.V. All rights reserved. Keywords: Composite environmental index; Sub-environmental index; Expert survey; Public survey; Analytic hierarchy process Keywords: 047; Q28
1. Introduction One of the reasons that the demand for integrated environmental information has recently
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increased in many countries is because integrated information is essentially used in evaluating the performance of environmentally sustainable development. As it is very difficult to evaluate the environmental performance on the grounds of so many environmental indicators, we should reduce the number of indicators by aggregating them to a composite environmental index (CEI) to make this information accessible. CEIs are very valuable as a
0921-8009/02/$ - see front matter # 2002 Elsevier Science B.V. All rights reserved. PII: S 0 9 2 1 - 8 0 0 9 ( 0 2 ) 0 0 2 0 7 - 0
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S.M. Kang / Ecological Economics 43 (2002) 159 /174
vehicle for providing environmental information in a clear and succinct manner. CEIs are especially very useful for environmental decision-making by policy makers and for maintaining well-informed public, although environmental experts may have several means for analyzing many indicators. Decision makers are much more likely to rely on integrated information such as the CEIs. Efforts to select basic data on environmental indicators and to integrate these indicators into a CEI have been ongoing since the 1970s, but because systematic and reasonable methodologies have not been clearly formulated, CEIs have not been widely used. Prior studies have defects such as a lack of basic environmental data, deficient information on environmental and public health effects of pollutants, arbitrary selection of weights assigned to environmental themes, and a lack of rationale in the use of the CEI function. Ott (1978) and Naito and Nishioka (1984) construct frameworks and theories for computing CEIs. Inhaber (1974), Hope and Parker (1980), Hope et al. (1992), NWF (1991), Parker (1991) and Hope and Parker (1995) compute CEIs, and Adriaanse (1993), Jesinghaus (1995a), Jesinghaus (1995b, 1997) and Puolamaa et al. (1996) develop new frameworks for CEIs using an environmental theme approach.1 US EPA (1997) arranges the literature on environmental indices. These studies show the methods used to weigh environmental indicators and functional forms in order to aggregate sub-indices into a CEI. But Inhaber (1974), NWF (1991), Parker (1991), Hope et al. (1992) and Hope and Parker (1995), determine the selection of basic data and the seriousness of pollution materials subjectively, based on the authors’ or a small number of experts’ opinions. Moreover, they do
1 An environmental index based on the environmental media approach (air, water and soil) cannot effectively respond to complicated and diversified environmental themes. The environmental theme approach is far more effective in that not only are economic activities linked to the pressure of the environment, but it is also possible to devise concrete measures for solving the environmental theme.
not follow an environmental theme approach but rather, an environmental media approach for computing a CEI.2 Conversely, Puolamaa et al. (1996) use the environmental theme approach, and select environmental indicators based on materials causing environmental themes. Further, by scaling the seriousness of pollutants according to their physical impact on the environment, they employ objectivity in selecting environmental indicators and weights. But they compute sub-environmental indices (SEI) rather than a CEI, and only suggest a method for computing CEIs. Kang (1997) and Kang et al. (1999) determine the weights of the seriousness among environmental indicators and the weights of environmental themes through an expert survey in order to overcome the limitations of Hope et al. (1992), Hope and Parker (1995) and Puolamaa et al. (1996). They compute a CEI using a weightedsum form */one of increasing functions. But they depend solely on the expert survey for the weights of environmental themes, and compute the CEI with the weights based only on a one-time survey. The purpose of this paper is to carry out a sensitivity analysis of the Korean CEI by examining the CEIs that were computed by functional forms and those derived from opinion surveys, with a special emphasis on the assessment of weights of environmental indicators and themes: the CEIs are based on environmental themes and pressure indicators.
2
In a PSR (pressure-state-response) framework, P (pressure) indicates human activities which deteriorate the environmental state. For example, industrial activities, traffic and various pollution emissions belong to the pressure category. S (state) denotes ambient environmental states changed due to pressure factors like human activities. The concentrations of pollutants are usually included here. R (response) means the response tools of humans to control and improve a worsening environment state. For instance, the control activities, pollution control and abatement expenditure, environmental regulation and effluent charge system belong to the response category.
S.M. Kang / Ecological Economics 43 (2002) 159 /174
cess is as follows:
2. Model The procedure of calculating a CEI is divided into two main parts. The first part involves selecting the proper environmental indicators that belong to each sub-index and then computing the sub-index. The second part involves deriving weights for the sub-indices and combining the weighted sub-indices to obtain a composite index. Sub-indices depend primarily on the quality of basic data and the equivalency factor for pressure. An initial step in deriving sub-indices is the identification of the pressure sources that cause each environmental theme. The causal relation between pressure sources on each environmental theme should be examined scientifically. The most proper way to measure environmental pressure is based on potential effects of the pressure. In order to determine the relative contribution of the main pressures to each environmental theme, the pressures that have a primary potential effect on each one are selected. Then, each pressure is computed using its relative potential influence, or environmental impact coefficient.3 By adding all pressures, a sub-index for each environmental theme is, finally, derived as shown in Eq. (1): SIjt P1jt E1jt P2jt E2jt . . . . . .Pnjt Enjt
n X
161
Pijt ×Eijt ;
(1)
ijt
where SIjt is a sub-index for theme j in year t , Pijt is pressure i causing theme j in year t, and Eijt is the environmental impact coefficient of pressure i causing theme j in year t. For each environmental theme, pressures may be expressed in different units. Therefore, it is necessary to normalize the sub-index by expressing each pressure as a ratio of a reference year’s pressure. The environmental impact coefficient is also replaced by the weighted value with its corresponding pressure. The normalization pro3 For example, SO2 emission within the acidification is 1.43 times more harmful than NOX scientifically. The environmental impact coefficients (E ) of SO2 and NOX are 1.43 and 1.
NIjt
P1jt P P EW1j 2jt EW2j . . . . . . njt P1j0 P2j0 Pnj0 EWnj
n X Pijt × EWij
Pij0
i1
(2)
;
where NIjt is the normalized sub-index for theme j in year t, and Pij 0 is the pressure i causing theme j in a reference year. EWij is the weighted value of Eij , i.e. EWij /Pijt Eij /ai Pijt Eij . Therefore, Eq. (2) can be expressed as:
NIjt
n X P i1
ijt
Pij0
×Pijt Eij
=
n X
Pijt Eij
i1
n X Pijt Pijt Eij SIit i1 Pij0
(3)
As mentioned above, the sub-indices should be combined with their weights to compute a CEI. The weights of the environmental themes can be obtained from environmental expert surveys or from public surveys about environmental themes. These surveys were the methods pursued by Hope et al. (1992) and Jesinghaus (1995a). To derive the weights practically, we used the analytic hierarchy process (AHP) that Saaty (1980) and Varis (1989) suggested.4 Each value of a pairwise comparison is arranged in a square matrix. The weights of environmental themes are calculated by dividing the arithmetic mean value of the pairwise comparisons in each row by the sum of the values of pairwise comparisons in a corresponding column. 4 The core of the questionnaire is to assess the seriousness of one theme in relation to another. The respondents pairwise evaluate nine types of themes separately in terms of the relative degree of seriousness, which runs from one (equally serious) to nine (nine times more serious).
S.M. Kang / Ecological Economics 43 (2002) 159 /174
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Table 1 Environmental indicators and weights (1997 /1998) Environment indicators
Weights
(a) Global warming CO2 NH4 (b) Ozone depletion CFC11 CFC12 CFC13 CFC114,115 Halon1211 Halon1301 111-TCE (c) Acidification SO2 NOX (d) Eutropication NOX Fertilizer Wastewater effluent (e) Eco-toxicant effect Heavy metal As Cr Ni
Environment indicators
1997
1998
1 0.08 0.92 1 0.06 0.06 0.06 0.06 0.17 0.56 0.01 1 0.59 0.41 1 0.28 0.40 0.32 1 0.27 0.04 0.04 0.02
1 0.08 0.92 1 0.06 0.06 0.06 0.06 0.17 0.56 0.01 1 0.59 0.41 1 0.22 0.45 0.34 1 0.25 0.04 0.04 0.02
Pb Cd Hg Zn Pesticides Specified waste Toxic chemicals (f) Resource depletion Underground water Energy The fisheries Forest lumbering rate (g) Photo-oxidation HC NOX (h) Biodiversity loss Land use Toxicant emission (i) Noise/bad odor Noise-vibration Bad odor Traffic quantity Airplane transportation
Weights 1997
1998
0.05 0.05 0.05 0.02 0.23 0.23 0.26 1 0.27 0.35 0.15 0.23 1 0.44 0.56 1 0.63 0.37 1 0.26 0.36 0.17 0.22
0.05 0.05 0.05 0.03 0.25 0.25 0.25 1 0.26 0.35 0.18 0.22 1 0.45 0.55 1 0.59 0.41 1 0.22 0.37 0.20 0.22
The weights of pressure indicators within global warming, ozone depletion, and acidification are internationally used weights (Puolamaa et al. (1996)).
W1
V1 V1
VT1
V1 Vm
V2 W2 V1
V1 V2
= = = = VTm
V2 V2
m
= = = = VT1
V 2 Vm
VTm
where Wj is the weight of jth theme; Vl /Vk is the value of the pairwise comparison for k th and lth themes; VTj is the sum of values of pairwise comparison in jth column. Finally, the CEI is calculated as follows:
VT2 . . .
CEIt NI1t W1t NI2t W2t NIjt
VT2 . . .
Wjt NImt Wmt
m
m X
NIit ×Wit
(5)
i1
n Vm Wm V1
V VT1 m VT2 . . . V2 VTm m;
= = = =
Vm Vm
(4)
Wj has a major and direct influence on the CEI: it represents how much each sub-index affects the composite index. If a sub-index increases by 1%, the composite index will increase by Wj percent. As a result, an increase in the CEI over time implies that environmental quality is deteriorating.
S.M. Kang / Ecological Economics 43 (2002) 159 /174
3. Environmental indicators and weights of environmental themes
3.1. Environmental indicators and weights We classify the scope of the CEI into nine themes: global warming, natural resource depletion, ozone layer depletion, biodiversity loss, acidification, photo-oxidation, eutrophication, eco-toxicant effect, and noise/bad odor.5 Thirtyseven environmental indicators within nine environmental themes are included in this paper (Table 1). These selected indicators within each environmental theme reflect the sufficiency of the core indicators.6 Most environmental themes used in Adriaanse (1993) and Puolamaa et al. (1996) are covered by the nine environmental themes presented here.7 Categorizing indicators by the traditional environmental media sometimes misses the main pollutants, and the cause of pollution, and it cannot respond to new pollutants and newly occurring environmental themes quickly. Therefore, in recent years, it has become more common to select environmental indicators harmonizing environmental media with information categories of the PSR framework.8
5 Noise and bad odor are different themes. But the reason we included these in one environmental theme is because even though bad odor had not yet enough indicators to be an environmental theme, we could not exclude it in estimating the CEI comprehensively. 6 The core environmental indicators stand for the principal and representative indicators that can explain an environmental theme more clearly of the several environmental indicators. The OECD (1998) suggests the core environmental indicators for environmental themes. 7 Puolamaa et al. (1996) also presented radioactive pollution. But this theme was excluded in this paper because its data is not available in Korea. 8 Most of the reports on environmental indicators that international organizations and OECD countries have published lately follow the PSR framework, including the environmental media.
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Hence, the environmental indicators included here are ‘pressure’ indicators within the PSR framework. It is generally acknowledged that the public can understand ‘state’ indicators more easily, and is more familiar with them. But since state indicators in Korea have not been produced in sufficient quantities compared to pressure indicators, gaps exist in computing CEIs with state indicators. Such a gap does not exist with pressure-based CEIs. The weights of the environmental pressure indicators for the nine environmental themes were computed in the following manner. Internationally known weights were used as the weights of pressure indicators within three themes: global warming, ozone depletion and acidification. The weights of pressure indicators within the six other themes were derived based on the mean responses from Korean environmental expert surveys over the 1997/1998 period. In the surveys, the environmental experts scored the damage potential for each pollution indicator on a 0 /1000 scale. Given the average score of individual indicator i (ASi ), its (unit pressure) weight is computed as n ASi =ai1 ASi :/ The weights of environmental indicators within each theme for 1997 /1998 are shown in Table 1. Note that the weights of the environmental indicators for these years show no significant difference. The order of weights of the environmental indicators also did not change. For example, the order of weights within eutrophication is: fertilizer consumption, wastewater discharge, and NOx (always from highest to lowest). The order of weights within natural resource depletion is: energy consumption, underground water, depletion of forest, and fisheries. The gaps of weights between the 2 years were modest. Within eutrophication, fertilizer consumption increased a small amount, and NOx decreased in 1998. The weights within eco-toxicant effect were almost identical. Within biodiversity loss, the weight of land use decreased, and the weight of toxic materials increased slightly.
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3.2. Weights of environmental themes Weights for environmental themes can be used primarily in investigating the public’s priorities.9 It is widely accepted that environmental experts in environmental themes understand the seriousness or damage potential of environmental themes best, but lately, public surveys have been used because of the recognition that public opinion is often more important in determining public policy. Hence, we need to compare the different weights assigned to environmental themes by each group of respondents. Further, because the opinions on environmental themes may be different across professions and regions, the weights were divided into categories corresponding to jobs and regions. That is, samples for the experts and the public were categorized into six stakeholder groups, and also distinguished between Seoul and other regions (Pusan, Taegu, Kwangju, Taejon, and Chunju). A stratified random sampling was used for two surveys. Following Jesinghaus (1995a) and Jesinghaus (1997), we considered six job groups as a population, and stratified and assigned samples by jobs and regions.10 In both 1997 and 1998, 200 environmental experts in 56 relevant Korean agencies were surveyed. The survey given only to experts in 1997 was expanded to the public in 1998. The public survey involved 200 lay-people who had not worked in environmental affairs. For comparison between the expert and public surveys, environmental experts and non-experts were categorized according to the six same job classifications. 140 out of 200 questionnaires in the 1997 expert survey were used in the analysis.11 One hundred and 9 Saaty (1980), Saaty and Kearn (1985), and Saaty and Vargass (1991) use the AHP to determine the priority of various social themes. Varis (1989) applies the AHP to the study of preference in environmental concerns. 10 Sub-sample sizes were governmental officials 40, public researchers 35, professors 45, NGOs 30, journalists 30, and private researchers 20. 11 When the questionnaires of respondents were not c on s i s t e n t i n t h e i r p a i r w i s e c om p a r i s o n b e t w e en environmental themes, or had no response items, they were excluded.
twenty-one out of 200 expert questionnaires and 115 out of 200 layperson questionnaires in the 1998 expert and public surveys were used. The weights of environmental themes were computed by the AHP of Saaty (1980). The weights of environmental themes from the expert survey in 1998 (total weight /100) are shown in Table 2.12 Comparing the 1998 weights with the 1997 weights in Table 3, we see the orders of the weights of environmental themes are the same for both years: global warming /natural resource depletion/ozone layer depletion/loss of biodiversity /acidification /photo-oxidation /eutrophication /eco-toxicant effect / noise/bad odor. Comparing average weights of environmental themes between the 1997 and 1998 expert surveys in Table 2 and Table 3, we see that the average weight of global warming and natural resources depletion increased, whereas the average weights for the 7 other environmental themes decreased. Most notably, the average weights for depletion of ozone layer and biodiversity loss decreased greatly. When we analyzed the gaps of weights among the six jobs in Table 2, the job category nearest to the distribution of the 1998 average weights was professors. The job categories deviated most from the distribution of the 1998 average weights were private researchers, NGOs and journalists. The weight distributions of government officials and public researchers in 1997 showed a pattern similar to the distribution of average weights in Table 3. In terms of the weight distribution between regions in Table 2, Seoul appeared much closer to the distribution of average weights. To test the consistency of the responses, we computed the principal eigenvalue (lmax) (Saaty, 1980). The consistency index (CI) is defined as (lmax/n)/(n/1), where n is the number of environmental themes. The consistency ratio (CR) is a proportion of the random index (RI) to CI, i.e. CR/CI/RI, where RI depends on the size of the
12
The comparison of weights between Seoul and other regions was not analyzed in the 1997 expert survey.
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Table 2 Weights of environmental themes by expert survey (1998) Environment themes
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
Jobs (%)
Range
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
26.2 15.9 8.5 8.3 4.9 15.9 7.3 10.5 2.5 1.6 3.9
26.3 17.0 9.0 5.8 6.5 16.7 6.2 9.5 3.0 1.8 3.9
27.6 11.5 9.3 6.5 7.1 21.0 5.7 8.9 2.5 2.3 1.7
25.0 13.0 8.8 4.6 6.4 17.1 7.5 15.1 2.5 1.8 6.2
29.6 12.6 9.3 6.5 6.1 14.4 5.7 12.3 3.6 4.8 7.5
23.6 7.5 8.8 7.4 10.6 21.4 10.5 6.6 3.6 1.0 8.7
6.0 9.5 0.8 3.7 5.7 7.0 4.8 8.5 1.1 / /
Mean
26.0 12.9 8.7 6.6 6.3 19.7 8.1 9.0 2.7 2.6 /
Regions (%) Seoul
Other
27.4 12.1 7.9 5.3 6.1 19.9 7.8 10.8 2.7 1.2 1.0
30.9 17.3 9.0 7.5 4.9 14.4 5.7 8.5 1.9 1.4 10.2
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers. Table 3 Weights (%) of environmental themes by expert survey (1997) Environment themes
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
Range
Mean
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
21.9 17.1 9.2 7.6 5.7 18.4 7.8 9.4 2.9 1.5 1.8
16.4 15.7 9.8 8.3 6.4 16.4 10.3 13.2 3.5 1.2 2.9
16.9 14.7 8.5 9.8 10.1 15.5 10.0 10.8 3.8 0.9 4.8
24.5 13.2 7.7 5.7 6.0 16.6 7.4 16.4 2.6 1.7 6.4
24.6 17.2 7.8 5.0 3.8 16.3 8.3 13.5 3.4 1.4 5.1
20.3 11.1 13.6 6.1 7.6 19.5 9.2 8.0 4.4 1.6 7.0
8.2 6.1 5.9 4.8 6.3 4.0 2.6 8.4 1.8 / /
20.5 15.1 9.3 7.3 6.5 17.4 9.0 11.7 3.4 0.9 /
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers.
matrix.13 If the value of CR is B/10%, the results of the survey are considered to be consistent. The CRs in the two surveys are 0.9 and 2.6%, implying that the consistency levels are reliable.14 We also compared the weights between the 1998 expert and public surveys. The weights of environ-
13
The distribution of RI for matrix size (n /n ) is as follows (Saaty and Kearn, 1985): 0 for 1/1 and 2/2; 0.58 for 3/3; 0.9 for 4/4; 1.12 for 5/5; 1.24 for 6/6; 1.32 for 7/7; 1.41 for 8/8; 1.45 for 9/9; 1.49 for 10/10; 1.51 for 11/11. 14 In case the value of CR is /10%, the responses are considered to be inconsistent (Saaty, 1980).
mental themes in the 1998 public survey are shown in Table 4. The weights of global warming and natural resource depletion in the 1998 expert survey were higher than those in the 1998 public survey. Conversely, the weights of ozone layer depletion and acidification in the 1998 public survey were relatively higher than those in the 1998 expert survey. Meanwhile, the experts showed big gaps over depletion of the ozone layer and biodiversity loss, but the public showed the greatest difference between global warming and ozone layer depletion. In the CR ratio, the expert survey showed higher consistency than the public survey.
S.M. Kang / Ecological Economics 43 (2002) 159 /174
166
Fig. 1. CEIs by weights of the expert and public surveys.
4. Comparisons of CEIs 4.1. Trends of SEIs and CEIs The nine SEIs over the 1986/1997 period (1990 /100) are presented in Table 5. Five SEIs (all except ozone layer depletion, acidification, eutrophication, and photo-oxidation) exhibited continuous increases over the period. Even though total fuel use increased continuously, the slow increases of acidification and photo-oxidation were due to the growing use of low-sulfur fuel
and the consequent reduction of SOx emissions. Conversely, the increase of NOx due to the rapid increase in total vehicles offset the negative effect of reduced SOx emissions. The ozone layer depletion index rose continuously until 1991. A cause of the rapid growth in consumption of CFCs and Halons was South Korea’s imminent joining of the Montreal Protocol against depletion of the ozone layer, and its intent to build the reserves of CFCs and Halons before joining. Since signing the Montreal Protocol in February 1992, the Korean government has regulated the consumption of
Table 4 Weights of environmental themes by public survey (1998) Environment themes
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
Jobs (%)
Range
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
21.2 17.5 11.9 5.8 7.9 12.1 9.7 9.9 3.9 1.4 3.1
23.2 17.5 10.2 6.9 7.9 12.5 7.1 9.1 5.6 1.3 3.0
18.9 15.7 10.1 6.5 8.8 16.8 7.6 9.9 5.7 1.0 4.1
24.8 18.6 10.9 5.3 4.7 12.2 7.9 12.1 3.5 2.4 4.3
29.8 18.9 11.2 5.9 4.7 9.8 6.8 9.0 3.8 1.3 11.9
24.7 20.1 15.9 6.0 5.2 10.7 5.9 7.8 3.8 2.5 9.8
10.9 4.4 5.8 1.6 4.1 7.0 3.8 4.3 2.2 / /
Mean
23.0 17.1 10.6 5.9 6.3 16.0 8.8 8.8 3.6 4.0 /
Regions (%) Seoul
Other
22.8 17.5 12.5 6.8 8.1 11.8 7.4 8.3 4.8 0.8 3.6
24.8 18.3 10.0 5.7 5.4 13.0 7.6 11.1 4.2 1.2 2.7
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers.
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167
Table 5 Trends of nine SEIs (1986 /1997)
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Biodiversity loss Noise/bad odor
’86
’87
’88
’89
’90
’91
’92
’93
’94
’95
’96
’97
74.3 54.9 79.2 80.6 80.3 84.4 76.2 91.1 62.0
78.1 88.7 72.0 84.7 83.7 84.7 82.7 92.5 66.2
86.9 89.9 92.3 93.5 91.4 91.1 96.8 95.8 74.1
91.4 141.2 98.8 102.4 95.2 97.7 105.5 97.6 85.3
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
108.9 170.8 97.9 92.1 123.3 99.6 92.9 110.0 111.7
128.5 140.0 104.5 106.4 127.5 107.5 96.8 112.2 123.6
140.2 69.0 106.4 113.3 134.3 114.3 100.0 115.3 131.4
149.9 67.4 107.9 115.4 150.1 124.3 100.5 122.4 122.3
161.7 68.6 103.5 116.7 156.1 134.4 99.0 125.9 135.7
173.6 61.4 105.4 106.1 160.6 144.1 106.1 128.8 148.6
181.6 67.4 99.6 108.1 190.2 156.8 108.9 141.5 169.1
All SEIs in 1990 are 100.
ozone-depleting materials at a constant rate. The Korean Ministry of Environment (1999) planned to reduce the consumption of ozone depletion materials to 50% of the average consumption level for 1995 /1997 by 2005.
Five other SEIs (e.g. global warming, natural resource depletion, and eco-toxicant etc.) increased rapidly. The fast growth of these SEIs resulted from Korean government policies, which put a high priority on economic growth. Rapid
Table 6 Gaps of two CEIs by weights of the 1997 and 1998 expert surveys CEIs
’93
’94
’95
’96
’97
1997 Weight (A) 1998 Weight (B) Gaps (B /A)
112.7 115.1 2.4
118.2 121.1 3.0
123.2 126.9 3.7
127.4 131.9 4.5
136.1 140.7 4.6
Table 7 Causes of gaps between two CEIs CEIs
Expert
Public
Leading SEIs of degradation
Before ’93
After ’93
SEI
Weight
SEI
Weight
Before ’93
Ozone depletion Acidification Photo-oxidation Global warming
H
L
L
L
After ’93
Resource depletion Bio-diversity loss Ozone depletion
L
H
H
H
Before ’93
Acidification Photo-oxidation
H
H
L
H
After ’93
Global warming Resource depletion Bio-diversity loss
L
L
H
L
H, high value; L, low value.
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S.M. Kang / Ecological Economics 43 (2002) 159 /174
increases of energy, natural resource use, land development and toxic materials reflect government policy that values economic growth quite highly. The CEIs by weighted-sum are shown in Fig. 115. The weights of the 1998 expert survey were used to compute one of the CEIs (1990 /100). Though Korean environmental pollution partially showed improvements in 1990 and 1993, the overall trend worsened for 1986/1997. When Hope and Parker (1995) analyzed the trends of environmental pollution indices in England, France and Italy over the 1980/1988 period, these countries showed continuous improvements from the early 1980s on. In contrast, the Korean CEI has worsened, growing from 76.3 in 1986 to 140.7 in 1997. The sub-environmental themes that led to environmental deterioration at the end of the 1980s were depletion of ozone layer, acidification, photo-oxidation and eutrophication. But since 1993, global warming, natural resource depletion, biodiversity loss, and eco-toxicant effects have played a leading role in the degradation.
4.2. CEIs by weights of surveys If we compare the CEIs computed with the weights of the 1997 and 1998 expert surveys, the two CEIs show almost identical values and trends over the 1986 /1992 period. But after 1993, the CEI by 1998 weights shows a steeper increase than the CEI computed using 1997 weights (Table 6). The gap between the two CEIs is explained by the higher weights for global warming and natural resource depletion in 1998, leading to the greater CEI since 1993. But the overall CEIs both demonstrated similarly increasing trends. When we compare CEIs with the weights of the 1998 expert and public surveys as shown in Fig. 1, the two CEIs show almost identical values over the 1986 /1992 period. Since 1993, however, the CEI by the weights of the expert survey has higher
values than that by the weights of the public survey. The principal factors that explain the gap between the two CEIs are SEIs and their weights. Generally, a CEI combining a high sub-index (SIH) with a high weight (WH) and a low subindex (SIL) with a low weight (WL) will be higher than a CEI combining a high sub-index (SIH) with a low weight (WL) and a low sub-index (SIL) with a high weight (WH). The causes of the gaps between the two CEIs are depicted in Table 7. The CEI by the weights of the expert survey was generally calculated by the combination of SIH /WL and SIL /WH before 1993. But the CEI was generally calculated by the combination of SIH /WH and SIL /WL after 1993. On the other hand, the CEI by the weights of the public survey was calculated by SIH /WH and SIL /WL before 1993, and afterwards by SIL /WH and SIH /WL. The growth rate of the CEI by the weight of the public survey after 1993 was small compared to the growth rate before 1993. Generally, CEIs may differ according to weights by survey years or survey types. But, despite the variation of survey years and types, the CEIs in this study all steadily increased. Therefore, it appears that the differences due to weights by survey years and types were not substantial in Korea: the deteriorating environmental trend dominates any survey-induced variation. Hope et al. (1992) and Hope and Parker (1995) show similar results across various public surveys. Moreover, the results in this paper present much smaller gaps between CEIs than those of Hope et al. (1992) and Hope and Parker (1995). 4.3. CEIs by functional forms Environmental indices are generally divided into two categories: increasing and decreasing scale functions.16 The ideal functions of the CEI should 16
15
The weighted-sum form of the CEI was widely used in Inhaber (1974), Hope et al. (1992) and Parker (1991).
Inhaber (1974) mentions increasing indices as environmental pollution indices, and decreasing indices as environmental quality indices. Ott (1978) describes these as increasing scale functions and decreasing scale functions.
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169
Table 8 CEI functions General
Increasing indices
Decreasing indices
I ai1 Ii/ n I ai1 Wi Ii/
Ambiguity: no eclipsing Eclipsing: no ambiguity
Eclipsing: no ambiguity Eclipsing: no ambiguity
Reduction of ambiguity and eclipsing
Eclipsing: no ambiguity
1. Additive Linear-sum Weighted-sum
/
RSP
/
RMS
/
I ½(1=n)ðai1 Iip Þp/
Reduction of ambiguity and eclipsing
Eclipsing: no ambiguity
Q W I ni1 Ii I/ /I Max(I1 ; I2 ; . . . In )/ /I Min(I1 ; I2 ; . . . In )/
No application No ambiguity: no eclipsing No application
No eclipsing, no ambiguity No application No eclipsing, no ambiguity
/
n
1
I ðai1 Iip Þp/ 1
2. Multiplicative 3. Maximum 4. Minimum
n
/
Source: Ott (1978). I , CEI; Ii , SEI; Wi , weight of SEI; n , the number of environmental theme; p , degree of function.
minimize the loss of (relevant) information, and reflect the characteristics of the sub-indices perfectly. The functions for CEIs are characterized by four forms (additive, multiplicative, maximum, and minimum) as shown in Table 8. Additive forms, including linear-sum, weighted-sum, rootsum-power (RSP) and root-mean-square (RMS), have been used most widely in previous works. Of those, the weighted-sum is frequently used. The linear-sum is a simple summation of each SEI. So, even though each SEI satisfies environmental emission standards, the linear-sum CEI may exceed the environmental standard. That is, the linear-sum CEI may exaggerate the severity of the actual pollution situation. Hence, overestimation occurs when either SEI does not exceed the environmental standard, but the CEI exceeds it. The weight sum can complement the linear-sum by multiplying each SEI with its weight. While not overestimating the CEI, the weighted-sum can underestimate the CEI. Underestimation occurs when extremely bad environmental quality exists for at least one SEI, and the CEI cannot reflect this accurately. Meanwhile, there are non-linear functions, RSP and RMS, which eliminate both the overestimation and underestimation problems. As the degree of function is p E/1, there can be functions of various types according to p values.
That is, the higher the p , the less the overestimation. As p approaches , all overestimation and underestimation disappear. But because RSP and RMS may be used to emphasize the seriousness of particular SEIs, there are some constraints in adapting them to general environmental phenomena. 17 A maximum form, a special type of increasing form, is the most suitable when we check whether one of the SEIs exceeds at least an environmental standard.18 In contrast to the additive forms, multiplicative forms are used as decreasing functions. In a decreasing function, the more pollutant indices are near zero, the worse is environmental quality. Consequently, as these pollutant indices get far away from zero, environmental quality is better. If one SEI /0, the CEI is always 0 in a multiplicative model. This characteristic eliminates underestimation, because if one sub-index of the CEI shows bad environmental quality, the CEI will also show bad environmental quality. Conversely, if at least 17
When indices by linear models are weight-averaged, the gaps among high values and low values are offset. RSP and RMS were developed in order to complement this point. So, these models are especially used to highlight serious pollution. 18 If P approaches , the maximum function is also one of RSP, i.e. lim{[Ip 1/Ip 2]1/p } /Max{I1, I2}.
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Fig. 2. CEIs by functional forms.
one SEI is zero, the CEI is zero, and overestimation cannot also happen in multiplicative forms.19
19
The geometric average is a special type of weighted multiplicative function.
The CEIs by functional forms using the weights of the 1998 expert survey are shown in Fig. 2. The trends of the CEIs do not show strong differences among the several forms except the maximum CEI. Part (a) of Fig. 2 indicates the increasing CEIs by five different forms. The linear-sum and the weight-sum showed very similar levels for
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171
Table 9 The Korean central government’s budget expenditures (1990 /1999) 1990 Totala Economic development Labor Education Health and medical care Housing and human settlement Transportation and communicationb Culture Public peace and security Social welfare and safety Environmentc
26114.3 7017.7 152.5 8319.3 669.9 497.6 2980.9 234.2 2111.8 3963.2 167.3
1993 100.0 26.9 0.6 31.9 2.6 1.9 11.4 0.9 8.1 15.2 0.6
26081.2 5735.4 270.8 8531.7 404.2 351.5 3141.2 321.3 3142.2 4081.6 101.1
1996 100.0 22.0 1.0 32.7 1.5 1.3 12.0 1.2 12.0 15.6 0.4
35570.6 8167.0 349.6 10707.8 529.7 687.1 4573.6 517.5 4341.7 5564.1 132.4
1998 100.0 23.0 1.0 30.1 1.5 1.9 12.9 1.5 12.2 15.6 0.4
41045.6 9796.6 296.8 10773.5 862.8 502.3 9910.4 675.0 3750.0 4262.3 215.7
1999 100.0 23.9 0.7 26.2 2.1 1.2 24.1 1.6 9.1 10.4 0.5
44164.2 10357.2 640.9 10351.7 780.6 672.5 10947.5 790.8 3867.5 5560.4 195.1
100.0 23.5 1.5 23.4 1.8 1.5 24.8 1.8 8.8 12.6 0.4
Source: Korean National Statistical Office (1991 /2000). GDP deflator 1995/100. Units of variables are billion won and percent. a Military defense, public administration, local government support, and debt repayment expenditure are ruled out. b Transportation and communication expenditure belongs to economic development, but we separate it into an independent section. c If environment section includes the expenditure for environmental special accounts, the ratio of environmental expenditure increases to 1 /1.5%.
Part (b) of Fig. 2 shows the CEIs by the multiplicative and minimum forms. Analogously to increasing functions, the CEI by the multiplicative form continuously worsened from 1986/132.3 to 1997/74.8, which is similar to the CEI levels by the linear-sum and weighted-sum forms of increasing functions. The CEI by the
1986 /1997. But, as mentioned for the RSP and the RMS, these forms highlight outstanding values for each sub-index. The CEIs by the RSP and the RMS in 1989 and 1991 increased dramatically because the RSP and the RMS emphasized the sub-index of ozone layer depletion, which showed very high values in 1989 and 1991.
Table 10 Weights of Korean people for 10 sections (1997)
Total Economic development Labor Education Health and medical care Housing and human settlement Transportation and communication Culture Public peace and security Social welfare and safety Environment
Total (%)
Expertsa
Non-expertsb
Gapsc
100 13.6 11.4 10.7 10.5 9.1 7.9 8.2 8.9 9.0 10.7
100 13.1 12.0 10.5 9.9 9.0 7.8 8.2 8.8 9.2 11.6
100 14.0 11.1 10.8 10.9 9.2 7.9 8.2 9.0 9.0 10.0
0 10.3 /10.7 15.5 /8.4 /7.9 16.2 /6.6 0.2 1.4 /10.2
Source: Korean National Statistical Office (1998). a Experts indicate researchers and persons of affairs who have worked in 10 sections. b Non-experts point laypersons. c Gaps are differences between weights of budget expenditures of the Korean government and those of Korean people for 10 sections. Null hypothesis that the variance of weights of the Korean government and people for 10 sections is equal is rejected by Ftest. The critical value is 38.87.
S.M. Kang / Ecological Economics 43 (2002) 159 /174
172
minimum form also shows a deteriorating pattern in inverse proportion to the CEI by the maximum form. There is little difference among the functional forms*/the CEIs deteriorate regardless. 4.4. Korean environmental deterioration and economic growth A comparison of Korean economic growth and environmental deterioration showed interesting results. The annualized growth rates of real GDP and the annualized deterioration rate of environment over the 1986/1997 period were estimated and compared. The annualized growth rate of real GDP and the annualized deterioration rate of environment were 7.8 and 5.6%, respectively.20 We can also compare these by distinguishing two periods, 1986 /1990 and 1991 /1997. The annualized growth rate of GDP and the annualized deterioration rate of the environment were 9.1 and 7.0% for 1986/1990, and were 7.0 and 5.0% for 1991/1997, respectively. A linear regression of the CEI on the Korean real GDP for 1986 /1997 also gives the following result: ln(CEI)4:130:7 ln(GDP) (0:55)
(6)
(0:043)
where the standard errors are in parentheses. As expected, the CEI deterioration has a close, positive relation with real GDP growth (R2 / 0.96). A 1% growth in real GDP causes 0.7% deterioration in the CEI. Hence, the environment has been worsening in proportion to economic growth, suggesting that Korea has pursued economic growth at the expense of the environment. One of representative indicators that show that the Korean government has pursued an economic growth-oriented policy can be the budget expenditures of the Korean government for 10 sections. We hypothesize that the budget expenditures of the Korean government for 10 sections reflect the weights of the Korean government policy for each section. Comparing these weights of the Korean 20
The annualized growth rate of GDP/{Exp [ln (GDP in 1997/GDP in 1986)/11]/ 1}100, and the annualized deterioration rate of environment/{Exp [ln (CEI in 1997/ CEI in 1986)/11]/1}100.
government for each section with the corresponding weights assigned to each section by the Korean people, we can determine whether the environment section has a high enough weight and whether this weight is ignored by the Korean government, which places first its economic policy instead of the environment. Table 9 shows the budget expenditures of the Korean central government for 10 sections over the 1990/1999 period. The budgets of 10 sections in 1990 were expended as follows: education 31.9%, economic development 26.9%, social welfare and security 15.2%, transportation and communication 11.4%, public peace and safety 8.1%, health and medical care 2.6%, housing and human settlement 1.9%, culture 0.9%, labor 0.6%, and environment protection 0.6%. Table 9 also shows that the budget shares of the central government almost kept a constant proportion and the same order for 9 fields for 1990/1999. The Korean government has broadly included transportation and communication section in economic development. The proportion for economic development in total government expenditure was 23.9%, and the share for broad economic development (including transportation and communication) was 48.0% in 1998. It seems the reason the Korean government allocated such a big portion to transportation and communication is because this section is very important for economic development. Conversely, the budget expenditure of the central government for environmental protection was only 0.5% in the same year. Meanwhile, Table 10 indicates the weights of Korean people for 10 sections based on a 1997 Korean National Statistical Office survey. The gaps among the weights of Korean people for 10 sections are generally small, and range from 13.6% for economic development to 7.9% for transportation and communication. While Korean people, of course, have the highest weight for economic development, they also have a high weight for environment protection, 10.7%, which is next to economic development and labor. Comparing the weights of the Korean government with those of the Korean people (Table 10), the gap between the two weights of economic development is 10.3%. The gaps between the
S.M. Kang / Ecological Economics 43 (2002) 159 /174
weights of education and transportation and communication are 15.5 and 16.2%, respectively, but the gap between the weights of the environment by the Korean government and the Korean people is /10.2%, and the gaps between those of labor, health and medical care, housing and human settlement, and culture are /10.7, /8.4, /7.9, and /6.6%. This implies that the Korean government put a priority on economic growth at the cost of environment protection, labor, health and medical care, and culture.
5. Conclusions We carried out a sensitivity analysis of the Korean CEI by examining the CEIs that were computed by functional forms, and those derived from opinion surveys with a special emphasis on the assessment of weights of environmental indicators and themes. The trends of CEIs had minor gaps according to survey types, survey years, and functional forms, but their effects on the CEI were not strong enough to alter the general trend, which is a clear deterioration of the environment. The Korean CEI has been deteriorating in proportion to economic growth. The annualized growth rate of real GDP and the annualized deterioration rate of environment for 1986 /1997 were 7.8 and 5.6%, respectively, and a linear regression of CEI on real GDP over the same period showed a close, positive relation, specifically that a 1% growth of real GDP caused a 0.7% deterioration of the environment. The main cause of this environmental deterioration is that Korea is still a developing country under active economic growth. Though the Korean government speaks of environmentally sound and sustainable development, it, in practice, appears to favor economic growth over environmental preservation. This was supported by comparing these weights of the Korean government and the Korean people for economic growth and environmental protection, which showed that the environment had a high enough weight, but this weight was ignored by the Korean government. As is well-known, the CEI is very helpful to narrow the differences of opinions about environ-
173
mental pollution between governments and people. Further, this comprehensive measurement is needed to enforce the environmental component of governmental policies, and to complement the deficiencies of GDP in terms of environment. In order to develop and improve the CEI more in the future, the following endeavors should be undertaken. First, since composite environmental indices are intended to show comprehensive environment changes and evaluate policy performance, they should be increasingly used in environmental decision-making. Second, environmental indicators for the environmental state and the environmental response, as well as the environmental pressure, should be developed, and both ‘state’ CEI and ‘response’ CEI should be developed to provide more accurate environmental information.
Acknowledgements We appreciate Jochen Jesinghaus and Jonathan Parker, as well as referee Renat Perelet and other anonymous referees who gave very constructive comments.
References Adriaanse, A., 1993. Environmental Policy Performance Indicators. Statistics Netherlands, Netherlands. Hope, C., Parker, J., 1980. Environmental information for all: the need for a monthly index. Energy Policy 18 (4), 312 / 319. Hope, C., Parker, J., 1995. Environmental indices for France, Italy and the UK. European Environment 5, 13 /19. Hope, C., Parker, J., Peake, S., 1992. A pilot environmental index for the United Kingdom in the 1980s. Energy Policy 20 (4), 335 /343. Inhaber, H., 1974. Environmental quality: outline for a national index for Canada. Science, 798 /805. Jesinghaus, J., 1995a. The pressure indices project: theory and structure. Working Paper. Eurostat. Jesinghaus, J., 1995b. Green accounting and environmental indicators. Workshop Paper. The Scope Workshop on Indicators of Sustainable Development. Wuppertal, Germany. Jesinghaus, J., 1997. Pressure indicators and indices. Internal Working Document. Eurostat.
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Kang, S.M., 1997. On Computation of Korean Composite Environmental Index. National Statistical Training Center National Environment Institute, South Korea. Kang, S.M., Kim, M.S., Lee, M.H., 1999. An empirical study for composite environmental index. Korean Association of Economics. Journal Korean Economic Review 47, 349 /370. Korean Ministry of Environment, 1999. Core Environmental Indicators. Seoul, South Korea. Korean National Statistical Office, 1998. Korean Social Welfare Indicators. Seoul, South Korea. Korean National Statistical Office, 1991 /2000. Korean Statistical Yearbook. Seoul, South Korea. Naito, M., Nishioka, S., 1984. Environmental Indices: Basic Notion and Formation. The National Institute for Environmental Studies (NIES), Japan. NWF, 1991. 23rd environmental quality index (for 1990). National Wildlife, 33 /40. OECD, 1998. Core Environmental Indicators. Paris, France. Ott, W.R., 1978. Environment Indices: Theory and Practice. Ann Arbor Science Press.
Parker, J., 1991. Environmental Reporting and Environmental Indices. Ph.D. Dissertation. The University of Cambridge, UK. Puolamaa, M., Kaplas, M., Reinikainen, T., 1996. Index of Environmental Friendliness: A Methodological Study. Statistics Finland, Finland. Saaty, T.L., 1980. Analytical Hierarchy Process: Planning, Priority Setting, Resource Allocation. McGraw-Hill, New York. Saaty, T.L., Kearn, K.P., 1985. Analytical Planning. RWS Publication. Saaty, T.L., Vargass, L.G., 1991. The Logic of Priorities. RWS Publication. US EPA, 1997. Literature review of environmental indices. Working Paper. Washington, DC. Varis, O., 1989. The analysis of preferences in complex environmental judgments */a focus on the analytic hierarchy process. Journal Environment Management 28, 283 / 294.
ANALYSIS
A sensitivity analysis of the Korean composite environmental index Sang Mok Kang Department of Economics, University of Chicago, Chicago, IL 60637, USA Received 4 December 2001; received in revised form 17 June 2002; accepted 29 July 2002
Abstract The purpose of this paper is to carry out a sensitivity analysis of the Korean composite environmental index (CEI) by examining the CEIs computed by functional forms and those derived from opinion surveys, with a special emphasis on the assessment of weights of environmental indicators and themes: the CEIs are based on environmental themes and pressure indicators. The trends of CEIs had minor gaps according to survey types, survey years, and functional forms, but their effects on the CEI were not strong enough to alter the general trend, which is a clear deterioration of the environment. The Korean CEI has been deteriorating in proportion to economic growth. The annualized growth rate of real GDP and the annualized deterioration rate of environment for 1986 /1997 were 7.8 and 5.6%, respectively, and a linear regression of CEI on real GDP over the same period showed a close, positive relation, specifically that a 1% growth of real GDP caused a 0.7% deterioration of the environment. The principal cause of the deteriorating environment is the priority given to economic growth over environmental preservation in the Korean drive for economic development. # 2002 Elsevier Science B.V. All rights reserved. Keywords: Composite environmental index; Sub-environmental index; Expert survey; Public survey; Analytic hierarchy process Keywords: 047; Q28
1. Introduction One of the reasons that the demand for integrated environmental information has recently
Address: 2450 Sycamore Lane #5A, West Lafayette, IN 47906, USA. Tel.: /1-765-496-6262/464-2485; fax: /1-765496-1224 E-mail address: [email protected] (S.M. Kang).
increased in many countries is because integrated information is essentially used in evaluating the performance of environmentally sustainable development. As it is very difficult to evaluate the environmental performance on the grounds of so many environmental indicators, we should reduce the number of indicators by aggregating them to a composite environmental index (CEI) to make this information accessible. CEIs are very valuable as a
0921-8009/02/$ - see front matter # 2002 Elsevier Science B.V. All rights reserved. PII: S 0 9 2 1 - 8 0 0 9 ( 0 2 ) 0 0 2 0 7 - 0
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S.M. Kang / Ecological Economics 43 (2002) 159 /174
vehicle for providing environmental information in a clear and succinct manner. CEIs are especially very useful for environmental decision-making by policy makers and for maintaining well-informed public, although environmental experts may have several means for analyzing many indicators. Decision makers are much more likely to rely on integrated information such as the CEIs. Efforts to select basic data on environmental indicators and to integrate these indicators into a CEI have been ongoing since the 1970s, but because systematic and reasonable methodologies have not been clearly formulated, CEIs have not been widely used. Prior studies have defects such as a lack of basic environmental data, deficient information on environmental and public health effects of pollutants, arbitrary selection of weights assigned to environmental themes, and a lack of rationale in the use of the CEI function. Ott (1978) and Naito and Nishioka (1984) construct frameworks and theories for computing CEIs. Inhaber (1974), Hope and Parker (1980), Hope et al. (1992), NWF (1991), Parker (1991) and Hope and Parker (1995) compute CEIs, and Adriaanse (1993), Jesinghaus (1995a), Jesinghaus (1995b, 1997) and Puolamaa et al. (1996) develop new frameworks for CEIs using an environmental theme approach.1 US EPA (1997) arranges the literature on environmental indices. These studies show the methods used to weigh environmental indicators and functional forms in order to aggregate sub-indices into a CEI. But Inhaber (1974), NWF (1991), Parker (1991), Hope et al. (1992) and Hope and Parker (1995), determine the selection of basic data and the seriousness of pollution materials subjectively, based on the authors’ or a small number of experts’ opinions. Moreover, they do
1 An environmental index based on the environmental media approach (air, water and soil) cannot effectively respond to complicated and diversified environmental themes. The environmental theme approach is far more effective in that not only are economic activities linked to the pressure of the environment, but it is also possible to devise concrete measures for solving the environmental theme.
not follow an environmental theme approach but rather, an environmental media approach for computing a CEI.2 Conversely, Puolamaa et al. (1996) use the environmental theme approach, and select environmental indicators based on materials causing environmental themes. Further, by scaling the seriousness of pollutants according to their physical impact on the environment, they employ objectivity in selecting environmental indicators and weights. But they compute sub-environmental indices (SEI) rather than a CEI, and only suggest a method for computing CEIs. Kang (1997) and Kang et al. (1999) determine the weights of the seriousness among environmental indicators and the weights of environmental themes through an expert survey in order to overcome the limitations of Hope et al. (1992), Hope and Parker (1995) and Puolamaa et al. (1996). They compute a CEI using a weightedsum form */one of increasing functions. But they depend solely on the expert survey for the weights of environmental themes, and compute the CEI with the weights based only on a one-time survey. The purpose of this paper is to carry out a sensitivity analysis of the Korean CEI by examining the CEIs that were computed by functional forms and those derived from opinion surveys, with a special emphasis on the assessment of weights of environmental indicators and themes: the CEIs are based on environmental themes and pressure indicators.
2
In a PSR (pressure-state-response) framework, P (pressure) indicates human activities which deteriorate the environmental state. For example, industrial activities, traffic and various pollution emissions belong to the pressure category. S (state) denotes ambient environmental states changed due to pressure factors like human activities. The concentrations of pollutants are usually included here. R (response) means the response tools of humans to control and improve a worsening environment state. For instance, the control activities, pollution control and abatement expenditure, environmental regulation and effluent charge system belong to the response category.
S.M. Kang / Ecological Economics 43 (2002) 159 /174
cess is as follows:
2. Model The procedure of calculating a CEI is divided into two main parts. The first part involves selecting the proper environmental indicators that belong to each sub-index and then computing the sub-index. The second part involves deriving weights for the sub-indices and combining the weighted sub-indices to obtain a composite index. Sub-indices depend primarily on the quality of basic data and the equivalency factor for pressure. An initial step in deriving sub-indices is the identification of the pressure sources that cause each environmental theme. The causal relation between pressure sources on each environmental theme should be examined scientifically. The most proper way to measure environmental pressure is based on potential effects of the pressure. In order to determine the relative contribution of the main pressures to each environmental theme, the pressures that have a primary potential effect on each one are selected. Then, each pressure is computed using its relative potential influence, or environmental impact coefficient.3 By adding all pressures, a sub-index for each environmental theme is, finally, derived as shown in Eq. (1): SIjt P1jt E1jt P2jt E2jt . . . . . .Pnjt Enjt
n X
161
Pijt ×Eijt ;
(1)
ijt
where SIjt is a sub-index for theme j in year t , Pijt is pressure i causing theme j in year t, and Eijt is the environmental impact coefficient of pressure i causing theme j in year t. For each environmental theme, pressures may be expressed in different units. Therefore, it is necessary to normalize the sub-index by expressing each pressure as a ratio of a reference year’s pressure. The environmental impact coefficient is also replaced by the weighted value with its corresponding pressure. The normalization pro3 For example, SO2 emission within the acidification is 1.43 times more harmful than NOX scientifically. The environmental impact coefficients (E ) of SO2 and NOX are 1.43 and 1.
NIjt
P1jt P P EW1j 2jt EW2j . . . . . . njt P1j0 P2j0 Pnj0 EWnj
n X Pijt × EWij
Pij0
i1
(2)
;
where NIjt is the normalized sub-index for theme j in year t, and Pij 0 is the pressure i causing theme j in a reference year. EWij is the weighted value of Eij , i.e. EWij /Pijt Eij /ai Pijt Eij . Therefore, Eq. (2) can be expressed as:
NIjt
n X P i1
ijt
Pij0
×Pijt Eij
=
n X
Pijt Eij
i1
n X Pijt Pijt Eij SIit i1 Pij0
(3)
As mentioned above, the sub-indices should be combined with their weights to compute a CEI. The weights of the environmental themes can be obtained from environmental expert surveys or from public surveys about environmental themes. These surveys were the methods pursued by Hope et al. (1992) and Jesinghaus (1995a). To derive the weights practically, we used the analytic hierarchy process (AHP) that Saaty (1980) and Varis (1989) suggested.4 Each value of a pairwise comparison is arranged in a square matrix. The weights of environmental themes are calculated by dividing the arithmetic mean value of the pairwise comparisons in each row by the sum of the values of pairwise comparisons in a corresponding column. 4 The core of the questionnaire is to assess the seriousness of one theme in relation to another. The respondents pairwise evaluate nine types of themes separately in terms of the relative degree of seriousness, which runs from one (equally serious) to nine (nine times more serious).
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162
Table 1 Environmental indicators and weights (1997 /1998) Environment indicators
Weights
(a) Global warming CO2 NH4 (b) Ozone depletion CFC11 CFC12 CFC13 CFC114,115 Halon1211 Halon1301 111-TCE (c) Acidification SO2 NOX (d) Eutropication NOX Fertilizer Wastewater effluent (e) Eco-toxicant effect Heavy metal As Cr Ni
Environment indicators
1997
1998
1 0.08 0.92 1 0.06 0.06 0.06 0.06 0.17 0.56 0.01 1 0.59 0.41 1 0.28 0.40 0.32 1 0.27 0.04 0.04 0.02
1 0.08 0.92 1 0.06 0.06 0.06 0.06 0.17 0.56 0.01 1 0.59 0.41 1 0.22 0.45 0.34 1 0.25 0.04 0.04 0.02
Pb Cd Hg Zn Pesticides Specified waste Toxic chemicals (f) Resource depletion Underground water Energy The fisheries Forest lumbering rate (g) Photo-oxidation HC NOX (h) Biodiversity loss Land use Toxicant emission (i) Noise/bad odor Noise-vibration Bad odor Traffic quantity Airplane transportation
Weights 1997
1998
0.05 0.05 0.05 0.02 0.23 0.23 0.26 1 0.27 0.35 0.15 0.23 1 0.44 0.56 1 0.63 0.37 1 0.26 0.36 0.17 0.22
0.05 0.05 0.05 0.03 0.25 0.25 0.25 1 0.26 0.35 0.18 0.22 1 0.45 0.55 1 0.59 0.41 1 0.22 0.37 0.20 0.22
The weights of pressure indicators within global warming, ozone depletion, and acidification are internationally used weights (Puolamaa et al. (1996)).
W1
V1 V1
VT1
V1 Vm
V2 W2 V1
V1 V2
= = = = VTm
V2 V2
m
= = = = VT1
V 2 Vm
VTm
where Wj is the weight of jth theme; Vl /Vk is the value of the pairwise comparison for k th and lth themes; VTj is the sum of values of pairwise comparison in jth column. Finally, the CEI is calculated as follows:
VT2 . . .
CEIt NI1t W1t NI2t W2t NIjt
VT2 . . .
Wjt NImt Wmt
m
m X
NIit ×Wit
(5)
i1
n Vm Wm V1
V VT1 m VT2 . . . V2 VTm m;
= = = =
Vm Vm
(4)
Wj has a major and direct influence on the CEI: it represents how much each sub-index affects the composite index. If a sub-index increases by 1%, the composite index will increase by Wj percent. As a result, an increase in the CEI over time implies that environmental quality is deteriorating.
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3. Environmental indicators and weights of environmental themes
3.1. Environmental indicators and weights We classify the scope of the CEI into nine themes: global warming, natural resource depletion, ozone layer depletion, biodiversity loss, acidification, photo-oxidation, eutrophication, eco-toxicant effect, and noise/bad odor.5 Thirtyseven environmental indicators within nine environmental themes are included in this paper (Table 1). These selected indicators within each environmental theme reflect the sufficiency of the core indicators.6 Most environmental themes used in Adriaanse (1993) and Puolamaa et al. (1996) are covered by the nine environmental themes presented here.7 Categorizing indicators by the traditional environmental media sometimes misses the main pollutants, and the cause of pollution, and it cannot respond to new pollutants and newly occurring environmental themes quickly. Therefore, in recent years, it has become more common to select environmental indicators harmonizing environmental media with information categories of the PSR framework.8
5 Noise and bad odor are different themes. But the reason we included these in one environmental theme is because even though bad odor had not yet enough indicators to be an environmental theme, we could not exclude it in estimating the CEI comprehensively. 6 The core environmental indicators stand for the principal and representative indicators that can explain an environmental theme more clearly of the several environmental indicators. The OECD (1998) suggests the core environmental indicators for environmental themes. 7 Puolamaa et al. (1996) also presented radioactive pollution. But this theme was excluded in this paper because its data is not available in Korea. 8 Most of the reports on environmental indicators that international organizations and OECD countries have published lately follow the PSR framework, including the environmental media.
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Hence, the environmental indicators included here are ‘pressure’ indicators within the PSR framework. It is generally acknowledged that the public can understand ‘state’ indicators more easily, and is more familiar with them. But since state indicators in Korea have not been produced in sufficient quantities compared to pressure indicators, gaps exist in computing CEIs with state indicators. Such a gap does not exist with pressure-based CEIs. The weights of the environmental pressure indicators for the nine environmental themes were computed in the following manner. Internationally known weights were used as the weights of pressure indicators within three themes: global warming, ozone depletion and acidification. The weights of pressure indicators within the six other themes were derived based on the mean responses from Korean environmental expert surveys over the 1997/1998 period. In the surveys, the environmental experts scored the damage potential for each pollution indicator on a 0 /1000 scale. Given the average score of individual indicator i (ASi ), its (unit pressure) weight is computed as n ASi =ai1 ASi :/ The weights of environmental indicators within each theme for 1997 /1998 are shown in Table 1. Note that the weights of the environmental indicators for these years show no significant difference. The order of weights of the environmental indicators also did not change. For example, the order of weights within eutrophication is: fertilizer consumption, wastewater discharge, and NOx (always from highest to lowest). The order of weights within natural resource depletion is: energy consumption, underground water, depletion of forest, and fisheries. The gaps of weights between the 2 years were modest. Within eutrophication, fertilizer consumption increased a small amount, and NOx decreased in 1998. The weights within eco-toxicant effect were almost identical. Within biodiversity loss, the weight of land use decreased, and the weight of toxic materials increased slightly.
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3.2. Weights of environmental themes Weights for environmental themes can be used primarily in investigating the public’s priorities.9 It is widely accepted that environmental experts in environmental themes understand the seriousness or damage potential of environmental themes best, but lately, public surveys have been used because of the recognition that public opinion is often more important in determining public policy. Hence, we need to compare the different weights assigned to environmental themes by each group of respondents. Further, because the opinions on environmental themes may be different across professions and regions, the weights were divided into categories corresponding to jobs and regions. That is, samples for the experts and the public were categorized into six stakeholder groups, and also distinguished between Seoul and other regions (Pusan, Taegu, Kwangju, Taejon, and Chunju). A stratified random sampling was used for two surveys. Following Jesinghaus (1995a) and Jesinghaus (1997), we considered six job groups as a population, and stratified and assigned samples by jobs and regions.10 In both 1997 and 1998, 200 environmental experts in 56 relevant Korean agencies were surveyed. The survey given only to experts in 1997 was expanded to the public in 1998. The public survey involved 200 lay-people who had not worked in environmental affairs. For comparison between the expert and public surveys, environmental experts and non-experts were categorized according to the six same job classifications. 140 out of 200 questionnaires in the 1997 expert survey were used in the analysis.11 One hundred and 9 Saaty (1980), Saaty and Kearn (1985), and Saaty and Vargass (1991) use the AHP to determine the priority of various social themes. Varis (1989) applies the AHP to the study of preference in environmental concerns. 10 Sub-sample sizes were governmental officials 40, public researchers 35, professors 45, NGOs 30, journalists 30, and private researchers 20. 11 When the questionnaires of respondents were not c on s i s t e n t i n t h e i r p a i r w i s e c om p a r i s o n b e t w e en environmental themes, or had no response items, they were excluded.
twenty-one out of 200 expert questionnaires and 115 out of 200 layperson questionnaires in the 1998 expert and public surveys were used. The weights of environmental themes were computed by the AHP of Saaty (1980). The weights of environmental themes from the expert survey in 1998 (total weight /100) are shown in Table 2.12 Comparing the 1998 weights with the 1997 weights in Table 3, we see the orders of the weights of environmental themes are the same for both years: global warming /natural resource depletion/ozone layer depletion/loss of biodiversity /acidification /photo-oxidation /eutrophication /eco-toxicant effect / noise/bad odor. Comparing average weights of environmental themes between the 1997 and 1998 expert surveys in Table 2 and Table 3, we see that the average weight of global warming and natural resources depletion increased, whereas the average weights for the 7 other environmental themes decreased. Most notably, the average weights for depletion of ozone layer and biodiversity loss decreased greatly. When we analyzed the gaps of weights among the six jobs in Table 2, the job category nearest to the distribution of the 1998 average weights was professors. The job categories deviated most from the distribution of the 1998 average weights were private researchers, NGOs and journalists. The weight distributions of government officials and public researchers in 1997 showed a pattern similar to the distribution of average weights in Table 3. In terms of the weight distribution between regions in Table 2, Seoul appeared much closer to the distribution of average weights. To test the consistency of the responses, we computed the principal eigenvalue (lmax) (Saaty, 1980). The consistency index (CI) is defined as (lmax/n)/(n/1), where n is the number of environmental themes. The consistency ratio (CR) is a proportion of the random index (RI) to CI, i.e. CR/CI/RI, where RI depends on the size of the
12
The comparison of weights between Seoul and other regions was not analyzed in the 1997 expert survey.
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Table 2 Weights of environmental themes by expert survey (1998) Environment themes
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
Jobs (%)
Range
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
26.2 15.9 8.5 8.3 4.9 15.9 7.3 10.5 2.5 1.6 3.9
26.3 17.0 9.0 5.8 6.5 16.7 6.2 9.5 3.0 1.8 3.9
27.6 11.5 9.3 6.5 7.1 21.0 5.7 8.9 2.5 2.3 1.7
25.0 13.0 8.8 4.6 6.4 17.1 7.5 15.1 2.5 1.8 6.2
29.6 12.6 9.3 6.5 6.1 14.4 5.7 12.3 3.6 4.8 7.5
23.6 7.5 8.8 7.4 10.6 21.4 10.5 6.6 3.6 1.0 8.7
6.0 9.5 0.8 3.7 5.7 7.0 4.8 8.5 1.1 / /
Mean
26.0 12.9 8.7 6.6 6.3 19.7 8.1 9.0 2.7 2.6 /
Regions (%) Seoul
Other
27.4 12.1 7.9 5.3 6.1 19.9 7.8 10.8 2.7 1.2 1.0
30.9 17.3 9.0 7.5 4.9 14.4 5.7 8.5 1.9 1.4 10.2
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers. Table 3 Weights (%) of environmental themes by expert survey (1997) Environment themes
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
Range
Mean
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
21.9 17.1 9.2 7.6 5.7 18.4 7.8 9.4 2.9 1.5 1.8
16.4 15.7 9.8 8.3 6.4 16.4 10.3 13.2 3.5 1.2 2.9
16.9 14.7 8.5 9.8 10.1 15.5 10.0 10.8 3.8 0.9 4.8
24.5 13.2 7.7 5.7 6.0 16.6 7.4 16.4 2.6 1.7 6.4
24.6 17.2 7.8 5.0 3.8 16.3 8.3 13.5 3.4 1.4 5.1
20.3 11.1 13.6 6.1 7.6 19.5 9.2 8.0 4.4 1.6 7.0
8.2 6.1 5.9 4.8 6.3 4.0 2.6 8.4 1.8 / /
20.5 15.1 9.3 7.3 6.5 17.4 9.0 11.7 3.4 0.9 /
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers.
matrix.13 If the value of CR is B/10%, the results of the survey are considered to be consistent. The CRs in the two surveys are 0.9 and 2.6%, implying that the consistency levels are reliable.14 We also compared the weights between the 1998 expert and public surveys. The weights of environ-
13
The distribution of RI for matrix size (n /n ) is as follows (Saaty and Kearn, 1985): 0 for 1/1 and 2/2; 0.58 for 3/3; 0.9 for 4/4; 1.12 for 5/5; 1.24 for 6/6; 1.32 for 7/7; 1.41 for 8/8; 1.45 for 9/9; 1.49 for 10/10; 1.51 for 11/11. 14 In case the value of CR is /10%, the responses are considered to be inconsistent (Saaty, 1980).
mental themes in the 1998 public survey are shown in Table 4. The weights of global warming and natural resource depletion in the 1998 expert survey were higher than those in the 1998 public survey. Conversely, the weights of ozone layer depletion and acidification in the 1998 public survey were relatively higher than those in the 1998 expert survey. Meanwhile, the experts showed big gaps over depletion of the ozone layer and biodiversity loss, but the public showed the greatest difference between global warming and ozone layer depletion. In the CR ratio, the expert survey showed higher consistency than the public survey.
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Fig. 1. CEIs by weights of the expert and public surveys.
4. Comparisons of CEIs 4.1. Trends of SEIs and CEIs The nine SEIs over the 1986/1997 period (1990 /100) are presented in Table 5. Five SEIs (all except ozone layer depletion, acidification, eutrophication, and photo-oxidation) exhibited continuous increases over the period. Even though total fuel use increased continuously, the slow increases of acidification and photo-oxidation were due to the growing use of low-sulfur fuel
and the consequent reduction of SOx emissions. Conversely, the increase of NOx due to the rapid increase in total vehicles offset the negative effect of reduced SOx emissions. The ozone layer depletion index rose continuously until 1991. A cause of the rapid growth in consumption of CFCs and Halons was South Korea’s imminent joining of the Montreal Protocol against depletion of the ozone layer, and its intent to build the reserves of CFCs and Halons before joining. Since signing the Montreal Protocol in February 1992, the Korean government has regulated the consumption of
Table 4 Weights of environmental themes by public survey (1998) Environment themes
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Bio-diversity loss Noise/bad odor CR VAR
Jobs (%)
Range
Govt. officials
Pub. R.
Prof.
NGOs
J.-lists
Priv. R.
21.2 17.5 11.9 5.8 7.9 12.1 9.7 9.9 3.9 1.4 3.1
23.2 17.5 10.2 6.9 7.9 12.5 7.1 9.1 5.6 1.3 3.0
18.9 15.7 10.1 6.5 8.8 16.8 7.6 9.9 5.7 1.0 4.1
24.8 18.6 10.9 5.3 4.7 12.2 7.9 12.1 3.5 2.4 4.3
29.8 18.9 11.2 5.9 4.7 9.8 6.8 9.0 3.8 1.3 11.9
24.7 20.1 15.9 6.0 5.2 10.7 5.9 7.8 3.8 2.5 9.8
10.9 4.4 5.8 1.6 4.1 7.0 3.8 4.3 2.2 / /
Mean
23.0 17.1 10.6 5.9 6.3 16.0 8.8 8.8 3.6 4.0 /
Regions (%) Seoul
Other
22.8 17.5 12.5 6.8 8.1 11.8 7.4 8.3 4.8 0.8 3.6
24.8 18.3 10.0 5.7 5.4 13.0 7.6 11.1 4.2 1.2 2.7
Govt. officials, governmental officials; Pub. R., public researchers; Prof., professors; J.-list, journalists; Priv. R., private researchers.
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Table 5 Trends of nine SEIs (1986 /1997)
Global warming Ozone depletion Acidification Eutrophication Eco-toxicant effect Resource depletion Photo-oxidation Biodiversity loss Noise/bad odor
’86
’87
’88
’89
’90
’91
’92
’93
’94
’95
’96
’97
74.3 54.9 79.2 80.6 80.3 84.4 76.2 91.1 62.0
78.1 88.7 72.0 84.7 83.7 84.7 82.7 92.5 66.2
86.9 89.9 92.3 93.5 91.4 91.1 96.8 95.8 74.1
91.4 141.2 98.8 102.4 95.2 97.7 105.5 97.6 85.3
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
108.9 170.8 97.9 92.1 123.3 99.6 92.9 110.0 111.7
128.5 140.0 104.5 106.4 127.5 107.5 96.8 112.2 123.6
140.2 69.0 106.4 113.3 134.3 114.3 100.0 115.3 131.4
149.9 67.4 107.9 115.4 150.1 124.3 100.5 122.4 122.3
161.7 68.6 103.5 116.7 156.1 134.4 99.0 125.9 135.7
173.6 61.4 105.4 106.1 160.6 144.1 106.1 128.8 148.6
181.6 67.4 99.6 108.1 190.2 156.8 108.9 141.5 169.1
All SEIs in 1990 are 100.
ozone-depleting materials at a constant rate. The Korean Ministry of Environment (1999) planned to reduce the consumption of ozone depletion materials to 50% of the average consumption level for 1995 /1997 by 2005.
Five other SEIs (e.g. global warming, natural resource depletion, and eco-toxicant etc.) increased rapidly. The fast growth of these SEIs resulted from Korean government policies, which put a high priority on economic growth. Rapid
Table 6 Gaps of two CEIs by weights of the 1997 and 1998 expert surveys CEIs
’93
’94
’95
’96
’97
1997 Weight (A) 1998 Weight (B) Gaps (B /A)
112.7 115.1 2.4
118.2 121.1 3.0
123.2 126.9 3.7
127.4 131.9 4.5
136.1 140.7 4.6
Table 7 Causes of gaps between two CEIs CEIs
Expert
Public
Leading SEIs of degradation
Before ’93
After ’93
SEI
Weight
SEI
Weight
Before ’93
Ozone depletion Acidification Photo-oxidation Global warming
H
L
L
L
After ’93
Resource depletion Bio-diversity loss Ozone depletion
L
H
H
H
Before ’93
Acidification Photo-oxidation
H
H
L
H
After ’93
Global warming Resource depletion Bio-diversity loss
L
L
H
L
H, high value; L, low value.
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increases of energy, natural resource use, land development and toxic materials reflect government policy that values economic growth quite highly. The CEIs by weighted-sum are shown in Fig. 115. The weights of the 1998 expert survey were used to compute one of the CEIs (1990 /100). Though Korean environmental pollution partially showed improvements in 1990 and 1993, the overall trend worsened for 1986/1997. When Hope and Parker (1995) analyzed the trends of environmental pollution indices in England, France and Italy over the 1980/1988 period, these countries showed continuous improvements from the early 1980s on. In contrast, the Korean CEI has worsened, growing from 76.3 in 1986 to 140.7 in 1997. The sub-environmental themes that led to environmental deterioration at the end of the 1980s were depletion of ozone layer, acidification, photo-oxidation and eutrophication. But since 1993, global warming, natural resource depletion, biodiversity loss, and eco-toxicant effects have played a leading role in the degradation.
4.2. CEIs by weights of surveys If we compare the CEIs computed with the weights of the 1997 and 1998 expert surveys, the two CEIs show almost identical values and trends over the 1986 /1992 period. But after 1993, the CEI by 1998 weights shows a steeper increase than the CEI computed using 1997 weights (Table 6). The gap between the two CEIs is explained by the higher weights for global warming and natural resource depletion in 1998, leading to the greater CEI since 1993. But the overall CEIs both demonstrated similarly increasing trends. When we compare CEIs with the weights of the 1998 expert and public surveys as shown in Fig. 1, the two CEIs show almost identical values over the 1986 /1992 period. Since 1993, however, the CEI by the weights of the expert survey has higher
values than that by the weights of the public survey. The principal factors that explain the gap between the two CEIs are SEIs and their weights. Generally, a CEI combining a high sub-index (SIH) with a high weight (WH) and a low subindex (SIL) with a low weight (WL) will be higher than a CEI combining a high sub-index (SIH) with a low weight (WL) and a low sub-index (SIL) with a high weight (WH). The causes of the gaps between the two CEIs are depicted in Table 7. The CEI by the weights of the expert survey was generally calculated by the combination of SIH /WL and SIL /WH before 1993. But the CEI was generally calculated by the combination of SIH /WH and SIL /WL after 1993. On the other hand, the CEI by the weights of the public survey was calculated by SIH /WH and SIL /WL before 1993, and afterwards by SIL /WH and SIH /WL. The growth rate of the CEI by the weight of the public survey after 1993 was small compared to the growth rate before 1993. Generally, CEIs may differ according to weights by survey years or survey types. But, despite the variation of survey years and types, the CEIs in this study all steadily increased. Therefore, it appears that the differences due to weights by survey years and types were not substantial in Korea: the deteriorating environmental trend dominates any survey-induced variation. Hope et al. (1992) and Hope and Parker (1995) show similar results across various public surveys. Moreover, the results in this paper present much smaller gaps between CEIs than those of Hope et al. (1992) and Hope and Parker (1995). 4.3. CEIs by functional forms Environmental indices are generally divided into two categories: increasing and decreasing scale functions.16 The ideal functions of the CEI should 16
15
The weighted-sum form of the CEI was widely used in Inhaber (1974), Hope et al. (1992) and Parker (1991).
Inhaber (1974) mentions increasing indices as environmental pollution indices, and decreasing indices as environmental quality indices. Ott (1978) describes these as increasing scale functions and decreasing scale functions.
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Table 8 CEI functions General
Increasing indices
Decreasing indices
I ai1 Ii/ n I ai1 Wi Ii/
Ambiguity: no eclipsing Eclipsing: no ambiguity
Eclipsing: no ambiguity Eclipsing: no ambiguity
Reduction of ambiguity and eclipsing
Eclipsing: no ambiguity
1. Additive Linear-sum Weighted-sum
/
RSP
/
RMS
/
I ½(1=n)ðai1 Iip Þp/
Reduction of ambiguity and eclipsing
Eclipsing: no ambiguity
Q W I ni1 Ii I/ /I Max(I1 ; I2 ; . . . In )/ /I Min(I1 ; I2 ; . . . In )/
No application No ambiguity: no eclipsing No application
No eclipsing, no ambiguity No application No eclipsing, no ambiguity
/
n
1
I ðai1 Iip Þp/ 1
2. Multiplicative 3. Maximum 4. Minimum
n
/
Source: Ott (1978). I , CEI; Ii , SEI; Wi , weight of SEI; n , the number of environmental theme; p , degree of function.
minimize the loss of (relevant) information, and reflect the characteristics of the sub-indices perfectly. The functions for CEIs are characterized by four forms (additive, multiplicative, maximum, and minimum) as shown in Table 8. Additive forms, including linear-sum, weighted-sum, rootsum-power (RSP) and root-mean-square (RMS), have been used most widely in previous works. Of those, the weighted-sum is frequently used. The linear-sum is a simple summation of each SEI. So, even though each SEI satisfies environmental emission standards, the linear-sum CEI may exceed the environmental standard. That is, the linear-sum CEI may exaggerate the severity of the actual pollution situation. Hence, overestimation occurs when either SEI does not exceed the environmental standard, but the CEI exceeds it. The weight sum can complement the linear-sum by multiplying each SEI with its weight. While not overestimating the CEI, the weighted-sum can underestimate the CEI. Underestimation occurs when extremely bad environmental quality exists for at least one SEI, and the CEI cannot reflect this accurately. Meanwhile, there are non-linear functions, RSP and RMS, which eliminate both the overestimation and underestimation problems. As the degree of function is p E/1, there can be functions of various types according to p values.
That is, the higher the p , the less the overestimation. As p approaches , all overestimation and underestimation disappear. But because RSP and RMS may be used to emphasize the seriousness of particular SEIs, there are some constraints in adapting them to general environmental phenomena. 17 A maximum form, a special type of increasing form, is the most suitable when we check whether one of the SEIs exceeds at least an environmental standard.18 In contrast to the additive forms, multiplicative forms are used as decreasing functions. In a decreasing function, the more pollutant indices are near zero, the worse is environmental quality. Consequently, as these pollutant indices get far away from zero, environmental quality is better. If one SEI /0, the CEI is always 0 in a multiplicative model. This characteristic eliminates underestimation, because if one sub-index of the CEI shows bad environmental quality, the CEI will also show bad environmental quality. Conversely, if at least 17
When indices by linear models are weight-averaged, the gaps among high values and low values are offset. RSP and RMS were developed in order to complement this point. So, these models are especially used to highlight serious pollution. 18 If P approaches , the maximum function is also one of RSP, i.e. lim{[Ip 1/Ip 2]1/p } /Max{I1, I2}.
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Fig. 2. CEIs by functional forms.
one SEI is zero, the CEI is zero, and overestimation cannot also happen in multiplicative forms.19
19
The geometric average is a special type of weighted multiplicative function.
The CEIs by functional forms using the weights of the 1998 expert survey are shown in Fig. 2. The trends of the CEIs do not show strong differences among the several forms except the maximum CEI. Part (a) of Fig. 2 indicates the increasing CEIs by five different forms. The linear-sum and the weight-sum showed very similar levels for
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Table 9 The Korean central government’s budget expenditures (1990 /1999) 1990 Totala Economic development Labor Education Health and medical care Housing and human settlement Transportation and communicationb Culture Public peace and security Social welfare and safety Environmentc
26114.3 7017.7 152.5 8319.3 669.9 497.6 2980.9 234.2 2111.8 3963.2 167.3
1993 100.0 26.9 0.6 31.9 2.6 1.9 11.4 0.9 8.1 15.2 0.6
26081.2 5735.4 270.8 8531.7 404.2 351.5 3141.2 321.3 3142.2 4081.6 101.1
1996 100.0 22.0 1.0 32.7 1.5 1.3 12.0 1.2 12.0 15.6 0.4
35570.6 8167.0 349.6 10707.8 529.7 687.1 4573.6 517.5 4341.7 5564.1 132.4
1998 100.0 23.0 1.0 30.1 1.5 1.9 12.9 1.5 12.2 15.6 0.4
41045.6 9796.6 296.8 10773.5 862.8 502.3 9910.4 675.0 3750.0 4262.3 215.7
1999 100.0 23.9 0.7 26.2 2.1 1.2 24.1 1.6 9.1 10.4 0.5
44164.2 10357.2 640.9 10351.7 780.6 672.5 10947.5 790.8 3867.5 5560.4 195.1
100.0 23.5 1.5 23.4 1.8 1.5 24.8 1.8 8.8 12.6 0.4
Source: Korean National Statistical Office (1991 /2000). GDP deflator 1995/100. Units of variables are billion won and percent. a Military defense, public administration, local government support, and debt repayment expenditure are ruled out. b Transportation and communication expenditure belongs to economic development, but we separate it into an independent section. c If environment section includes the expenditure for environmental special accounts, the ratio of environmental expenditure increases to 1 /1.5%.
Part (b) of Fig. 2 shows the CEIs by the multiplicative and minimum forms. Analogously to increasing functions, the CEI by the multiplicative form continuously worsened from 1986/132.3 to 1997/74.8, which is similar to the CEI levels by the linear-sum and weighted-sum forms of increasing functions. The CEI by the
1986 /1997. But, as mentioned for the RSP and the RMS, these forms highlight outstanding values for each sub-index. The CEIs by the RSP and the RMS in 1989 and 1991 increased dramatically because the RSP and the RMS emphasized the sub-index of ozone layer depletion, which showed very high values in 1989 and 1991.
Table 10 Weights of Korean people for 10 sections (1997)
Total Economic development Labor Education Health and medical care Housing and human settlement Transportation and communication Culture Public peace and security Social welfare and safety Environment
Total (%)
Expertsa
Non-expertsb
Gapsc
100 13.6 11.4 10.7 10.5 9.1 7.9 8.2 8.9 9.0 10.7
100 13.1 12.0 10.5 9.9 9.0 7.8 8.2 8.8 9.2 11.6
100 14.0 11.1 10.8 10.9 9.2 7.9 8.2 9.0 9.0 10.0
0 10.3 /10.7 15.5 /8.4 /7.9 16.2 /6.6 0.2 1.4 /10.2
Source: Korean National Statistical Office (1998). a Experts indicate researchers and persons of affairs who have worked in 10 sections. b Non-experts point laypersons. c Gaps are differences between weights of budget expenditures of the Korean government and those of Korean people for 10 sections. Null hypothesis that the variance of weights of the Korean government and people for 10 sections is equal is rejected by Ftest. The critical value is 38.87.
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minimum form also shows a deteriorating pattern in inverse proportion to the CEI by the maximum form. There is little difference among the functional forms*/the CEIs deteriorate regardless. 4.4. Korean environmental deterioration and economic growth A comparison of Korean economic growth and environmental deterioration showed interesting results. The annualized growth rates of real GDP and the annualized deterioration rate of environment over the 1986/1997 period were estimated and compared. The annualized growth rate of real GDP and the annualized deterioration rate of environment were 7.8 and 5.6%, respectively.20 We can also compare these by distinguishing two periods, 1986 /1990 and 1991 /1997. The annualized growth rate of GDP and the annualized deterioration rate of the environment were 9.1 and 7.0% for 1986/1990, and were 7.0 and 5.0% for 1991/1997, respectively. A linear regression of the CEI on the Korean real GDP for 1986 /1997 also gives the following result: ln(CEI)4:130:7 ln(GDP) (0:55)
(6)
(0:043)
where the standard errors are in parentheses. As expected, the CEI deterioration has a close, positive relation with real GDP growth (R2 / 0.96). A 1% growth in real GDP causes 0.7% deterioration in the CEI. Hence, the environment has been worsening in proportion to economic growth, suggesting that Korea has pursued economic growth at the expense of the environment. One of representative indicators that show that the Korean government has pursued an economic growth-oriented policy can be the budget expenditures of the Korean government for 10 sections. We hypothesize that the budget expenditures of the Korean government for 10 sections reflect the weights of the Korean government policy for each section. Comparing these weights of the Korean 20
The annualized growth rate of GDP/{Exp [ln (GDP in 1997/GDP in 1986)/11]/ 1}100, and the annualized deterioration rate of environment/{Exp [ln (CEI in 1997/ CEI in 1986)/11]/1}100.
government for each section with the corresponding weights assigned to each section by the Korean people, we can determine whether the environment section has a high enough weight and whether this weight is ignored by the Korean government, which places first its economic policy instead of the environment. Table 9 shows the budget expenditures of the Korean central government for 10 sections over the 1990/1999 period. The budgets of 10 sections in 1990 were expended as follows: education 31.9%, economic development 26.9%, social welfare and security 15.2%, transportation and communication 11.4%, public peace and safety 8.1%, health and medical care 2.6%, housing and human settlement 1.9%, culture 0.9%, labor 0.6%, and environment protection 0.6%. Table 9 also shows that the budget shares of the central government almost kept a constant proportion and the same order for 9 fields for 1990/1999. The Korean government has broadly included transportation and communication section in economic development. The proportion for economic development in total government expenditure was 23.9%, and the share for broad economic development (including transportation and communication) was 48.0% in 1998. It seems the reason the Korean government allocated such a big portion to transportation and communication is because this section is very important for economic development. Conversely, the budget expenditure of the central government for environmental protection was only 0.5% in the same year. Meanwhile, Table 10 indicates the weights of Korean people for 10 sections based on a 1997 Korean National Statistical Office survey. The gaps among the weights of Korean people for 10 sections are generally small, and range from 13.6% for economic development to 7.9% for transportation and communication. While Korean people, of course, have the highest weight for economic development, they also have a high weight for environment protection, 10.7%, which is next to economic development and labor. Comparing the weights of the Korean government with those of the Korean people (Table 10), the gap between the two weights of economic development is 10.3%. The gaps between the
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weights of education and transportation and communication are 15.5 and 16.2%, respectively, but the gap between the weights of the environment by the Korean government and the Korean people is /10.2%, and the gaps between those of labor, health and medical care, housing and human settlement, and culture are /10.7, /8.4, /7.9, and /6.6%. This implies that the Korean government put a priority on economic growth at the cost of environment protection, labor, health and medical care, and culture.
5. Conclusions We carried out a sensitivity analysis of the Korean CEI by examining the CEIs that were computed by functional forms, and those derived from opinion surveys with a special emphasis on the assessment of weights of environmental indicators and themes. The trends of CEIs had minor gaps according to survey types, survey years, and functional forms, but their effects on the CEI were not strong enough to alter the general trend, which is a clear deterioration of the environment. The Korean CEI has been deteriorating in proportion to economic growth. The annualized growth rate of real GDP and the annualized deterioration rate of environment for 1986 /1997 were 7.8 and 5.6%, respectively, and a linear regression of CEI on real GDP over the same period showed a close, positive relation, specifically that a 1% growth of real GDP caused a 0.7% deterioration of the environment. The main cause of this environmental deterioration is that Korea is still a developing country under active economic growth. Though the Korean government speaks of environmentally sound and sustainable development, it, in practice, appears to favor economic growth over environmental preservation. This was supported by comparing these weights of the Korean government and the Korean people for economic growth and environmental protection, which showed that the environment had a high enough weight, but this weight was ignored by the Korean government. As is well-known, the CEI is very helpful to narrow the differences of opinions about environ-
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mental pollution between governments and people. Further, this comprehensive measurement is needed to enforce the environmental component of governmental policies, and to complement the deficiencies of GDP in terms of environment. In order to develop and improve the CEI more in the future, the following endeavors should be undertaken. First, since composite environmental indices are intended to show comprehensive environment changes and evaluate policy performance, they should be increasingly used in environmental decision-making. Second, environmental indicators for the environmental state and the environmental response, as well as the environmental pressure, should be developed, and both ‘state’ CEI and ‘response’ CEI should be developed to provide more accurate environmental information.
Acknowledgements We appreciate Jochen Jesinghaus and Jonathan Parker, as well as referee Renat Perelet and other anonymous referees who gave very constructive comments.
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