Individual Indicators

City Development Index, Habitat

The City Development Index (CDI) is defined at the city level and could also be taken as a measure of average well-being and access to urban facilities by individuals. The high statistical significance and usefulness of the index indicate that it is actually measuring something real. CDI is a measure of depreciated total expenditure over time on human and physical urban services and infrastructure, and it is a proxy for the human and physical capital assets of the city. The CDI was developed as a prototype for Habitat II to rank cities according to their level of development. It is used in this report as a benchmark for comparative display of several of the key indicators from the United Nations Center for Human Settlements (UNCHS) (Habitat) Global Urban Indicators Database.

Corruption Perception Index, Global Corruption Barometer, and Bribe Payers Index

This group of indicators presents a joint initiative of the University of Passau and Transparency International. The Corruption Perception Index (CPI) is a poll of polls, reflecting the perceptions of businesspeople, academics, and risk analysts, both resident and nonresident. First launched in 1995, the 2003 CPI draws on seventeen surveys from thirteen independent institutions. A rolling survey of polls provided to Transparency International between 2001 and 2003, the CPI 2003 includes only countries that feature in at least three surveys. Whereas the CPI aims at assessing levels of corruption across countries, the Global Corruption Barometer (GCB) is concerned with attitudes that the general public forms about these levels of corruption. One question in the GCB asks respondents how significantly corruption affects their personal and family life. The resulting attitudes can vary widely and do not necessarily correlate with levels of corruption. Respondents in some countries may be capable of living with high levels of corruption, whereas for others even low levels of corruption provoke serious concerns. The CPI and GCB are complemented by Transparency International's Bribe Payers Index (BPI), which addresses the propensity of companies from top exporting countries to bribe in emerging markets. See www.transparency.org/tools/measurement.

Dow Jones Sustainability Index

Launched in 1999, the Dow Jones Sustainability Indices (DJSIs) are the first global indices tracking the financial performance of the leading sustainability-driven companies worldwide. The Dow Jones STOXX sustainability indices consist of a pan-European and a Eurozone index: the Dow Jones STOXX sustainability index (DJSI STOXX) and the Dow Jones EURO STOXX sustainability index (DJSI EURO STOXX). For both of these indices a composite and a specialized index are available, with the latter excluding companies that generate revenue from alcohol, tobacco, gambling, armaments, or firearms. See www.sustainability-indexes.com/.

Ecological Footprint

The Ecological Footprint (EF) was published for the first time in 1996 by Wackernagel and Rees. The EF of a specified population can be defined as the area of ecologically productive land needed to maintain its current consumption patterns and absorb its wastes with the prevailing technology. People consume resources from all over the world, so their footprint can be thought of as the sum of these areas, wherever on the planet they are located (Wackernagel and Rees 1996).

Environmental Space

The concept of environmental space has been promoted by Friends of the Earth in Europe as a way of measuring sustainability and quantifying the inequity in environmental impact between the North and the South. In practical terms, environmental space is the total amount of energy, nonrenewable resources, agricultural land, and forests that each person in a given population can use without causing irreversible environmental damage or depriving future generations of the resources they will need. The total amount of environmental space therefore is limited by the carrying capacity of the earth. The concept of a fair share in environmental space is based on the premise that all people have a right to an equitable share in the earth's resources and therefore is used to highlight the discrepancy in consumption patterns between different countries, communities, and lifestyle choices (Spangenberg 1995).

Environmental Sustainability Index

The Environmental Sustainability Index (ESI) is a measure of overall progress toward environmental sustainability, developed for 142 countries. The ESI scores are based on a set of twenty core indicators, each of which combines two to eight variables, for a total of sixty-eight underlying variables. The ESI permits cross-national comparisons of environmental progress in a systematic and quantitative fashion. It represents a first step toward a more analytically driven approach to environmental decision making. See www.ciesin.org/indicators/ESI/.

Freedom Country Scores

Since 1972, Freedom House has published an annual assessment of the state of freedom in all countries (and selected territories), now known as Freedom in the World. Individual countries are evaluated based on a checklist of questions on political rights and civil liberties that are derived in large measure from the Universal Declaration of Human Rights. Each country is assigned a rating for political rights and a rating for civil liberties based on a scale of 1 to 7, with 1 representing the highest degree of freedom and 7 the lowest level of freedom. The combined average of each country's political rights and civil liberties ratings determines an overall status of "Free," "Partly Free," or "Not Free." See www.freedomhouse.org/template.cfm?page=15&year=2006.

Genuine Progress Indicator (GPI)

This indicator uses a similar method as the Index of Sustainable Economic Welfare (ISEW) and makes twenty-seven adjustments to GDP. Its purpose is to provide a better indicator for well-being (Hamilton and Deniss 2000).

Genuine Savings

Genuine savings has been estimated and published in the World Bank's World Development Indicators. The rationale of the genuine savings approach is that persistently negative rates of genuine savings must lead to declining well-being. Genuine savings is calculated by subtracting natural resource depletion and pollution damages from net saving (net saving is gross saving minus the value of depreciation of produced assets). Resource depletion is measured as the total rents on resource extraction (bauxite, copper, gold, iron ore, lead, nickel, silver, tin, coal, crude oil, natural gas, and phosphate rock) and harvest (forests). So far, pollution damages are calculated only for carbon dioxide (Hamilton 2001).

Gross Domestic Product

GDP represents the total value of the goods and services produced by an economy over some unit of time (e.g., a month, a season, a year). The "domestic" part of the name comes from the fact that, unlike gross national product (GNP), it does not consider imports or exports in the calculation.

Growth Competitiveness Index and Business Competitiveness Index

The Growth Competitiveness Index (GCI) was developed by Jeffrey D. Sachs of Columbia University and John W. McArthur of the Earth Institute and was presented in Global Competitiveness Report 2001—2002. The Business Competitiveness Index (BCI) was developed by Michael Porter of Harvard University and was first introduced in Global Competitiveness Report 2000. The GCI uses both hard (publicly available) data and data from the World Economic Forum's Survey to estimate three component indices: the technology index, the public institutions index, and the macroeconomic environment index. The three components are then combined to calculate the overall GCI. To derive the overall BCI, two subindices are computed. The subindices measure the sophistication of company operations and strategy and the quality of the national business environment, respectively (World Economic Forum 2003).

Human Development Index

The Human Development Index is a summary composite index that measures a country's average achievements in three basic aspects of human development: longevity, knowledge, and a decent standard of living. Longevity is measured by life expectancy at birth; knowledge is measured by a combination of the adult literacy rate and the combined primary, secondary, and tertiary gross enrollment ratio; and standard of living is measured by GDP per capita. The index can take values between 0 and 1. Countries with an index over 0.800 are part of the High Human Development group. Between 0.500 and 0.800, countries are part of the Medium Human Development group, and below 0.500 they are part of the Low Human Development group (UNDP 2003).

Index of Environmental Friendliness

Statistics Finland developed the model for the Index of Environmental Friendliness. It is a general model for aggregating direct and indirect pressure data to problem indices and to an overall index. The scope of the model is designed to cover the key environmental problems related to the greenhouse effect, ozone depletion, acidification, eutrophication, ecotoxicological effects, resource depletion, photo-oxidation, biodiversity, radiation, and noise.

Because of shortcomings in either the aggregation methods or data availability, the practical testing of the model takes place with respect to the greenhouse effect, ozone depletion, acidification, eutrophication, ecotoxicological effects, and resource depletion. Also, the most important indirect emissions of electricity and heat consumption, waste, and wastewater treatment were attributed to the data evaluation in proportion to their purchases. See www.stat.fi/tk/yr/ye22_en.html.

Index of Sustainable Economic Welfare

The ISEW is proposed by Friends of the Earth. It is an indicator of economic welfare and represents an attempt to measure the underlying economic, social, and environmental factors that create real progress. The index has personal consumption spending as its base. A series of adjustments are made to consumption to arrive at the index value for a given year. The ISEW represents an important index of underlying long-term trends in real welfare. With careful use among a basket of other indicators, the ISEW informs policymakers and the general public of the factors that add to and subtract from welfare (Daly and Cobb 1989).

Living Planet Index

The Living Planet Index (LPI) is an indicator promoted by the World Wildlife Fund (WWF). It tries to assess the overall state of the earth's natural ecosystems, which includes national and global data on human pressures on natural ecosystems arising from the consumption of natural resources and the effects of pollution. The 1999 LPI measures primarily abundance and is derived from an aggregate of three different indicators of the state of natural ecosystems: the area of the world's natural forest cover, populations of freshwater species around the world, and populations of marine species around the world.

Each of these individual component indices is set at 100 in 1970, and they are given an equal weighting. The overall LPI has declined by 30 percent between 1970 and 1995, implying that the world has lost 30 percent of its natural wealth in the space of a generation (WWF 2002).

Natural Capital Index

The Natural Capital Index (NCI) was developed as an assessment tool for the Convention on Biological Diversity (UNEP 1997). It defines natural capital as the product of ecosystem quantity and quality. Ecosystem quality is calculated as a function of ecosystem quality variables such as abundance of various species, ecosystem structures, and species richness and expressed as the ratio between the current and a baseline state. The index potentially ranges from 0 to 100. An NCI of 100 for agricultural areas means that the total area is converted into agricultural land with a quality of 100 percent, signifying the pre-industrial or extensive agricultural state. The components of the NCI, trends in habitat area (quantity) and in the abundance of a selected set of species (quality), are part of the set indicators for evaluating the 2010 target, agreed upon in the CBD/COP7 in Kuala Lumpur, 2004. A pressure-based NCI has been applied in the United Nations Environment Programme (UNEP) Global Environment Outlook.

Well-Being Index (Barometer of Sustainability)

This index was developed by the World Conservation Union (IUCN). It combines thirty-six indicators of health, population, wealth, education, communication, freedom, peace, crime, and equity into a Human Well-Being Index and fifty-one indicators of land health, protected areas, water quality, water supply, global atmosphere, air quality, species diversity, energy use, and resource pressures into an Ecosystem Well-Being Index. The two indices are then combined into a Well-Being/Stress Index that measures how much human well-being each country obtains for the amount of stress it places on the environment (Prescott-Allen 2001).

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