Sunday, March 23, 2014

2014 Environment Performance Index (EPI) analysis is showing a 4% worldwide average reduction over 2012 which means EPI Yale experts are more pessimistic especially concerning urgent actions on water issues

Figure 1: Water scarcity has become one of our greatest challenges. In less than twenty years, nearly two billion people could face water shortages.

Yale last 2014 EnvironmentPerformance Index (EPI) is showing deterioration from the assessment made in 2012: the worldwide ranking based on population weighted index over all the ranked countries is around 45.7 in 2014 after 47.5 in 2012 which is a reduction of 4% over the last two years.

There had been modifications in the methodology and some additional countries missing in 2012 are now included in 2014’s assessment. Altogether the general situation of Environment Performance is looking bleaker than it was 2 years ago mostly because of water issues. 

Water scarcity has become one of the greatest challenge: nowadays about 1.6 Mil people, or a quarter of the world's population, live in countries that have insufficient water supplis (see Figure 1 above).  

As illustrated by the concept of “Tragedy of the Commons”, the "Commons" which include the atmosphere, oceans, rivers, forests, fish stocks and national parks are shared resource, that should be exploited in connection with sustainable development, meshing economic growth and environmental protection, as well as in the debate over global warming.  The tragedy of the commons is an example of emergent behavior, the outcome of individual interactions in a complex system which are provoking huge negative "externalities" that nobody is prepared to pay.

If we want to restore and protect the environment against pollution and seamlessly share the burden of efforts among the various stakeholders, it is necessary to define new indicators and tools. EPI ranking is essential to detect in which countries further actions are needed to avoid disastrous environmental issues.

Starting from year 2002, Yale 2014 country EPI rankings along with others ranking from OECD or Siemens (Asian Green City index) are necessary steps to discuss and address these issues.

EPI methodology adjustments in 2014

My blog dated 6 Nov 2012 has presented the EPI 2012 methodology and main results in Asia Pacific. The last EPI 2012 issue’s overall architecture is respected, with 4 levels of indexes or indicators:

(1) Global EPI;

(2) Environmental Health index EH, Environmental Vitality EV;

(3) 9 sub indexes: 3 for EH and 6 for EV 

(4) Twenty indicators with 1, 2 or 4 depending of the sub indexes

More countries are now in the scope with a total of 178 EPI ranked in 2014 against 132 in 2012. The 2014 EPI evaluates 178 countries, with 46 new additions, in large part, from Small-Island Developing States and sub-Saharan Africa.

The overall population ranked is now 6900 Mil in 2014 against 6550 Mil in 2012, which is an increase of 5% over 2012.

Most of the new countries ranked are low Income (18), lower middle income (13) or upper middle income countries (10). There are only 5 high income countries: Bahamas, Barbados, Antigua & Barbuda, Bahrain and Equatorial Guinea.     

The overall method has been adjusted (see Figure 2) in order to address some shortcoming, notably with the following sub indexes or indicators:

-     Drinking, sanitation and water resources weighting are increased from 16% to 28% (+12%) with a new wastewater treatment indicator, which is a major driver of ecosystem water quality;
-     Forest and Fisheries are more or less the same;
-    Air pollution: SO2 pollution has been deleted to use only PM2.5 particulate pollution: Air quality weighting is reduced from 16.26% to 13.32% (-2.94%);
-     Health impact (child mortality) is reduced from 15% to 13.33% (-1.67%);
-     Agriculture is reduced from 5.83% to 3% (-2.83%);
-     Biodiversity is reduced from 17% to 15% (-2%);
-     Climate and energy is also reduced from 17.52% to 15% (-2.52%) with a new index calculation that is dependant on the country's economic development level.

The water increased weighting in EPI is mirroring the water situation following a recent UN report asking urgent actions: water demand is likely to increase by 55% by 2050, with 40% of population living in areas of "severe" water stress. 

Asia will be the biggest hotspot over water extraction, where water sources straddle national borders. "Areas of conflict include the Aral Sea and the Ganges-Brahmaputra River, Indus River and Mekong River basins".

Apart from this adjustment for water, the overall architecture is more or less the same and past comparisons are still very useful.

It is true that it should be necessary – as explained by EPI Yale- to “back-cast” the new definition and weighting of indicators to know exactly the overall variation from the past.

However as explained by EPI Yale not every indicator in the 2014 EPI lends itself to back-cast or trend calculations. But more importantly we can say that the expert judgment EPI Yale is issuing now in 2014 is more pessimistic as compared to the 2012 assessment meanly because of water urgent issues to be addressed.

Figure 2 : EPI 2014 coefficients values and EPI 2012 comparison

Main results over the countries

If we compare the new EPIs and their variations over 2012-2014 – with all precautions discussed above- the following Figure 3 is showing the last two year trend over the 132 countries already ranked in 2012:

-    73 countries have increased their current EPI scores over the last two years : mostly higher income and upper middle  income;
-    59 countries have decreased their current EPI scores over the last two years: mostly lower income and lower middle income.

Large high income countries are progressing: Spain: +32%; Germany: +20%; USA: +20%; Japan: +14%; UK: +12%.

But heavily populated and low income countries are showing a strong reduction: Bangladesh: -39%;; Philippines: -23%; Indonesia: -15%; India: -14%; Brazil: -13%.

Figure 3 : EPI 2014 and trend 2012-2014 over various income-groups; note that only EPI 2012 ranked countries are presented. The above figure is showing: 32 high income OCDE countries 31 with increasing & 1 with decreasing (Taiwan) trends; 15 high-income non OCDE countries: 11 with increasing & 4 with decreasing (Croatia, Uruguay, Lithuania & Latvia) trends; 39 upper middle income countries: 24 with increasing & 15 with decreasing trends; 30 lower middle income countries: 7 with increasing & 23 with decreasing trends; 16 lower income countries all with decreasing trends

If we want to know the overall result over the planet, Yale EPI ranking does not give any clue and we have to make further assumptions as explained hereafter.

Relationship between EPI and income per capita

If we plot each country EPI against its respective income per capita with a logarithm scale for both EPI and income, we have a much better view over the small EPI countries.

We see- which is an amazing outcome- that all countries are more or less aligned in their average  line that best fits the showed income level EPI points with the method of least squares (see table 4).

Nevertheless there is a slight tendency for high income countries to be above the average line.

We see also that EPI’s volatility around the average line is increasing when income level decrease.  

Figure 4 : Curve of 2014 EPI scores plotted against GDP per capita with logarithm scales  

Another aspect is to show among a group of homogenous countries an average EPI value and which countries are doing well or bad at their income level.

For instance (see following Figures 5, 6 & 7) :

Figure 5 : Curve of High Income countries 2014 EPI scores plotted against GDP per capita with logarithm scales; in high income OCDE countries (red signs): USA, Belgium, Taiwan, South Korea and Israel have bad EPI as compared with the average line; France, Canada & Japan are a better EPI but still down the line; Switzerland, Luxembourg, Australia & Germany are much above the line; in high income non-OCDE countries(yellow signs): Equatorial Guinea; Bahamas and Barbados are far down the average line; Qatar, Bahrain & Trinidad & Tobago are not doing well also when compared with the average line; Singapore and United Arab Emirates are much above the average line

Figure 6: Curve of upper middle income countries 2014 EPI scores plotted against GDP per capita with logarithm scales; Grenada, Angola & Irak are down from the average line; China is slightly down;  Hungaria, Serbia and Belarus are well above the line

Figure 7 : Curve of lower middle income and lower income countries 2014 EPI scores plotted against GDP per capita with logarithm scales; in lower middle income countries: Mali, Sierra Leone and Afghanistan are down the average line; Zimbabwe is well above the average line; in lower middle income countries (blue signs) Lesotho & Sudan are down from the average lines; India is less down the line; Armenia and Egypt are well above the average line

Can we define 2013 EPI average value for all the ranked countries?  What is the overall evolution over 2012?

The country's EPI is an averaged value of each part or unit EPI of the country.  

When comparing relative situation of countries such as Switzerland or Singapore (5-7 Mil) with say USA (313 Mil), Indonesia (246 Mil), India (1236 Mil) or China (1350 Mil), we need to factor EPI by the population.

So there is a relationship between EPI and population. This means that to know the overall impact on the planet we need to use the EPI cumulated-weighted average (see Figure 8).

This Figure is showing that during the last two years the average value - or the worldwide EPI- was 45.7 in 2014 after 47.5 in 2012. 

This means that during the 2012-2014 period:  EPI was in average less than the middle value between 0 and 100.

We see also that in the last two years there have not been any improvement but a reduction of 3.8%:  some countries have improved- mostly small populated and high-income countries such as: Australia, Singapore or even USA- but the reduction of the highly populated middle and low income countries is showing a huge deterioration of the overall value.

Figure 8 : Population weighted 2012 and 2014 EPI monotonous curves