In my previous entry, I said that I suspect opportunity cost plays an important role between development and the environment and a country will only turn to environmental issues when it reaches certain economic level. I continued further by saying, a possible correlation between wealth of nations with environmental commitment could be a possible proof.
And guess what?
There actually is an index that could be used as a proxy for environmental commitment. I found this out after browsing the New York Times (reg. req.). It – the Environmental Sustainability Index – is produced by people at Yale and Columbia for the World Economic Forum, first published in 2002 and the 2005 issue has just been released earlier. The 2002 index is located at Columbia University server. Index for 2005 should be up soon.
In general, countries with high GDP per capita have higher ranking when compared to countries with lower GDP per capita.
There are a few wildcards however, like Belgium being 125th out of 142 in the 2002 index and Uruguay at sixth. I had expected a country like Uruguay, which has GDP per capita a bit lower than Malaysia, to be in the middle of the table and Belgium to do much better. The Arab nations, despite their high GDP per capita, linger at the bottom of the pit and they provide seemingly contradicting proof to the idea presented in the previous entry.
Perhaps, their cost of forgone economic benefit is higher than most people. It needs to be said that the opportunity cost idea is valid when all things are equal. The opportunity cost from one subject to the next does vary and this might explain why certain countries differ from their expected ranks. Furthermore, there are several issues with the methodology of the survey and this affects the accuracy of the index. The Times article states a few. One of the them:
He also said a system that rated Russia, whose populated western regions have undergone extraordinary environmental degradation, as having greater environmental sustainability than the United States had inherent weaknesses.
At 33, Russia’s ranking, Mr. Esty said, is in large part a consequence of the country’s vast size. While it “has terrible pollution problems” in the western industrial heartland, he said, its millions of unsettled or sparsely settled acres of Asian taiga mean “it has vast, untrammeled resources and more clean water than anywhere in the world.” So, he added, “on average, Russia ends up looking better than it does to someone who lives in western Russia.”
Alrighty, I’m going for breakfast. I won’t commit myself to any environmental course if my stomach is growling.
p/s – ReMag 5 is out. I’m not quite satisfied with the end product but more tweaks should happen soon.
pp/s – I wanted to play World of Warcraft so badly but the delay is too much for me to handle. I’ve thus canceled the Amazon order.
2 replies on “[476] Of development and the environment, II”
Perhaps they are not doing enough. Perhaps they do given the concerns for their slow moving economy. That’s debatable.
But, I’m trying to point out that countries need to reach a certain level of wealth for them to start attending to environmental issues and hence, the correlation of wealth with environmental protection.
I however am not trying to relate wealth with environmental condition. If I were doing the latter case, then I would definately agree with you.
Then again, the model itself is possibly incomplete and therefore, could be improve. I would like to hear how we could improve the model in explaining the empirical result.
environmental economics, a subject very dear to myself too.
Somehow, i think the hypotheses of positive correlation of economics prosperity and environmental protection is not reflecting the true picture. Perhaps it is true that richer countries have more resources to spend on environmental related issues.
However, when you consider the whole ‘economy’ in totality, ie, taking into account of the pollution externalities, etc, rich countries are not too environmental friendly. In fact, personally, i don;t think they have paid enough for all that they have done.
anyway, environmental economics is a very interesting issue. love to have more dialogue on it. see ya around. will be back.