Assessments Based on Indicators

The second approach to integrated assessment has built on the long work of statisticians and economists to assemble integrated and coherent national economic accounts. Gadrey and Jany-Catrice (2003) have reviewed in detail the recent efforts to extend this work into indicators of wealth and development. This approach starts by compiling many different statistics and indicators into a comprehensive data set. The challenge of this approach is to identify a realistic and balanced set of indicators and to collect sufficient reliable data to avoid so much interpolation or estimation that the results are meaningless. As with the illustrative indicators in the text-based assessments, a compilation of indicators can demonstrate many facets of the problem but does not actually integrate them. Here the issues of selection and weighting become crucial, and there is no consensus on a scientifically valid solution. This approach is still at the stage of a better description of the present state of the economy and society and sometimes the reconstruction of past trends. Less work has been done on the potential to project such indicator-based assessments into the future to determine sustainability because this will require complex and conceptually challenging models. A few examples will illustrate the present state of the art.

Gadrey and Jany-Catrice (2003) cite the Index of Economic Well-Being developed by Osberg and Sharpe (2002) as the most methodologically sound of the integrated indices while combining both objective and subjective measures. It equally weights four components: consumption (market consumption per capita, government expenditure per capita, unpaid domestic work), wealth (physical capital per capita, R&D per capita, natural resources per capita, human capital and education, minus net exterior debt per capita, minus cost of environmental degradation), equality (poverty, Gini coefficient of inequality), and economic security (risk of unemployment, economic risk of illness, poverty risk in single-parent families, poverty risk of older adults). Some of the factors are only roughly estimated, but because the index measures change over time, the absolute values are less important than relative changes from year to year. The index is also insensitive to changes in weighting. The plots of this index and its components over time show that GDP per capita and well-being do not always correlate, and even between industrialized countries, the performance on the different components can vary widely. Although the focus of this index is economic, it includes social and environmental dimensions. It does not attempt to measure sustainability, but methodologically it shows what might be possible.

The World Economic Forum and Yale and Columbia Universities developed an Environmental Sustainability Index (ESI) as the basis for their report Environmental Performance Measurement: The Global Report 2001—2002 (Esty and Cornelius 2002), recently updated in the 2005 Environmental Sustainability Index (Esty et al. 2005) comparing the performance of 146 countries. The ESI is made up of twenty-one indicators and seventy-six variables. It is probably the environmental assessment that most directly uses indicators as the tool for its evaluation. However, the reliance on indicators did not reduce the subjective dimension of the assessment, which was simply reflected in the selection of indicators and the weighting method chosen. Widespread criticisms of the 2002 ESI led to significant modifications in the 2005 version, which also identified further improvements that would be desirable when the data permit. The index also aims only to provide an integrated measure of environmental sustainability and does not attempt to address economic or social sustainability.

The UN Commission on Sustainable Development work program on indicators has produced two compilations of methods for sustainable development indicators (UN DSD 1996, 2001) for use at the national level. These have conceptually attempted to provide the basis for integrating many dimensions of sustainable development as defined by governments in Agenda 21, but they have not actually been used to generate integrated assessments, leaving that responsibility to national governments. Governments have indicated that they did not want such indicators used to compare and assess their sustainable development at the international level out of fear that this might lead to conditionality in development assistance. However, the Commission on Sustainable Development (CSD) indicators is the only set benefiting from such high-level political acceptability through their trial by many governments and adoption by the CSD. The first trial set of 134 indicators was arranged in a driving force, state, response framework and grouped by chapters of Agenda 21 (UN DSD 1996). This could have provided the basis for integrating the indicators according to their roles in system sus-tainability, but the indicators were too few and disparate for such integration, and the framework served only to show how well key issues of sustainability were being covered. The second set of 58 core indicators (UN DSD 2001) aimed to show their policy relevance by clustering them by themes and subthemes. This strengthened their power to communicate but was less amenable to an integrated view of sustainability.

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