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Lecture #11 12/04/07 SUSTAINABLE DEVELOPMENT INDICATORS

Lecture #11 12/04/07 SUSTAINABLE DEVELOPMENT INDICATORS. Kazi F. Jalal Faculty, Harvard Extension School. Lecture Outline. 1. Introduction 2. Environmental quality indices -Cost of remediation -Environmental elasticity - Environmental diamond

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Lecture #11 12/04/07 SUSTAINABLE DEVELOPMENT INDICATORS

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  1. Lecture #1112/04/07SUSTAINABLE DEVELOPMENT INDICATORS Kazi F. Jalal Faculty, Harvard Extension School

  2. Lecture Outline 1. Introduction 2. Environmental quality indices -Cost of remediation -Environmental elasticity - Environmental diamond 3. Human development index (HDI) 5. Social development indices (SDI) 6. Summary & conclusions

  3. In my policy-making I need an indicator in money terms for losses in environment and resources, as a counterweight to the indicator for production, namely national income. If a theoretically sound indicator is not possible, then think up one that is rather less theoretically sound. A Former Indonesian Minister for Population and Environment, 1986 A concerted effort to enhance habitability of our planet is unlikely to succeed unless we know “where we are” and “where we want to go.” To answer these questions, we must first consider exactly what we include in the term “environment.” If we restrict our definition to overly simplified definitions, such as the amount of a specified pollutant in the air, we have very little difficulty in measuring the environment. However, as we broaden our definition to include all the physical components, or all the physical and biological, or all the physical, biological and cultural ones, environment becomes exponentially more difficult to describe. W.A. Thomas, 1972

  4. Environmental quality indices • Cost of Remediation • Environmental Elasticity • Environmental Diamond

  5. Cost of Remediation (COR)

  6. Definition and Concept • COR is the cost of moving the present state of environment to a more acceptable level based on a set of pre-determined standards • Three steps... • Assess existing environmental quality • Establish a set of environmental standards or targets • Estimate aggregated costs of achieving environmental standards or targets

  7. Advantages of COR • It is in monetary terms and can be an effective counterweight to traditional economic indicators such as GDP • Costs of remediation of different components of the environment can be added, subtracted freely and, thus, it partially avoids the weighting problem

  8. Leopold Matrix

  9. Targets • Air and Water • Pollutants:Five pollutants including COD, suspended solids and heavy metals (water); total suspended particulates (TSP) and sulfur (air) • Targets:90% reduction in water and air pollutant emissions (1990 levels) in 10 years

  10. Targets • Land: Three Components • Soil Erosion Control • Target: 70% of eroded area will be controlled to achieve 70-95% erosion reduction within 10 years, • Forest cover • Target: 20% of total land cover within 10 years, • Municipal Solid Waste Management • Target: All municipal wastes will be collected and disposed immediately

  11. Targets • Ecosystem/Biodiversity Conservation • Target: Protected areas as a % of total land area, • Threatened species per 1000 ha • Percentage of wetlands threatened • Indonesia 10-year plan of building national parks and conservation areas

  12. Cost Assumptions • PRC cost data on air, water and land (soil erosion control and reforestation) pollution control are used and extrapolated to other countries. • WB’s cost estimates on solid waste management in developing countries and IUCN’s cost data for Indonesia on ecosystem management (of parks and conservation areas) are used and extrapolated to other countries.

  13. Table 1 Table 1. Annualized Cost of Remediation for DMCs ($million in 1990 US$) Country Water Air Land Ecosystem COR(total) BAN 13.70 30.34 321.47 52.39 417.89 BHU 0.16 0.35 8.50 24.45 33.45 CAM 0.31 0.70 78.11 30.85 109.97 LAO 0.26 0.58 38.46 33.18 72.48 MON 5.91 13.08 2,773.26 13.39 2,805.64 MYA 3.56 7.87 260.74 65.20 337.36 NEP 0.78 1.74 115.60 48.90 167.02 PAK 53.97 119.49 867.20 36.09 1,076.76 SRI 3.50 7.76 65.12 147.86 224.24 VIE 12.97 28.71 200.75 251.48 493.91 PRC 1,430.13 3,166.07 12,657.97 299.79 17,553.96 IND 418.97 927.53 4,882.97 852.23 7,081.70 INO 100.10 221.61 953.92 296.30 1,571.93 PNG 1.73 3.82 12.94 70.44 88.92 PHI 39.59 87.65 319.67 160.67 607.57 THA 67.00 148.32 557.63 47.73 820.68 FIJ 0.52 1.16 7.48 20.37 29.53 KOR 199.84 442.41 203.24 61.71 907.19 MAL 43.15 95.52 138.78 329.48 606.93 SIN 24.42 54.07 14.65 14.55 107.70 TOTAL 2,420.58 5,358.76 24,478.44 2,857.06 35,114.83

  14. Figure 1

  15. Figure 2

  16. Environmental Elasticity (EE)

  17. Definition and Concept • EE is a ratio : • aggregate percent change in environment / aggregate percent change in economy • Principal merits: • dynamic; uses data for two points in time to capture environmental changes w.r.t economic trends • it is a trend indicator as opposed to a state indicator

  18. Positive Environmental change relative to Negative Economic change Figure 3 Fig. 3: Map of Environmental Elasticity Environmental Aggregates (Numerator) Positive Environmental change relative to Positive Economic change (0,1) I II (1,0) (-1,0) Economic Aggregates (Denominator) III IV Negative Environmental change relative to Negative Economic change Negative Environmental change relative to Positive Economic change (0,-1)

  19. Table 3 Table 3 Average Annual Change Rates (AACR) of Selected Environmental-Economic Indicators Country Tot. Com. Eng. Use % Pop w S.D.W. Fertilizer Use/ha Forest Cover Env. Aggregate Total GDP AACR (1980-93) AACR (1980-91) AACR (1980-93) AACR (1980-90) AACR (1980-early 90) AACR (1980-93) Viet Nam 2.6% 2.91% 36.21% -1.44% -9.34% 7.10% Nepal 8.1% 15.90% 23.31% -1.07% -4.15% 5.00% Bangladesh 7.9% 9.45% 9.75% -2.73% -2.73% 4.20% Lao PDR 2.6% 2.92% -2.12% -0.90% 0.39% 4.80% India 6.7% 7.31% 2.13% -0.62% -0.53% 5.20% Mongolia 2.2% -3.09% 4.35% -0.86% -2.62% 3.80% Pakistan 6.8% 3.77% 6.98% -2.69% -3.18% 6.00% P.R. China 5.1% 5.45% 7.75% -0.65% -2.01% 9.60% Sri Lanka 1.9% 10.16% 0.72% -1.50% 1.51% 4.00% Myanmar -0.8% 5.45% -2.38% -1.22% 1.85% 0.80% Indonesia 7.5% 7.51% 7.01% -1.00% -2.00% 5.80% Philippines 3.5% 7.08% 3.15% -2.91% -0.62% 1.40% P. New Guinea 2.4% 9.84% 8.32% -0.30% -0.29% 3.10% Thailand 10.5% 1.25% 20.21% -2.91% -8.09% 8.20% Korea, Rep. 9.5% 0.25% 2.10% -0.15% -2.87% 9.10% Singapore 7.7% 0.00% 0.14% 0.00% -1.96% 6.90% AVERAGE 5.3% 5.38% 7.98% -1.40% -2.31% 5.17%

  20. Table 4 Table 4. Environmental Elasticity (1980) -early 1990s) Group Characteristics Country Value Ranking Diagram + Env Myanmar + Eco A 2.32 1 + Env + Eco A 0.38 2 Sri Lanka + Env + Eco A Lao PDR 0.08 3 + Env + Eco -0.09 4 B P. New Guinea + Env +Eco B India -0.10 5

  21. Group Characteristics Country Value Ranking Diagram + Env P. R. China + Eco B -0.21 6 + Env + Eco B Singapore -0.28 7 + Env + Eco B Korea, Rep. -0.32 8 + Env + Eco B Indonesia -0.35 9 + Env + Eco -0.44 10 B Philippines + Env +Eco B Pakistan -0.53 11

  22. Diagram Group Characteristics Country Value Ranking + Env -0.65 + Eco Bangladesh 12 B + Env B -0.69 Mongolia 13 + Eco + Env -0.83 B 14 Nepal + Eco + Env Thailand -0.99 15 B + Eco + Env +Eco C Viet Nam -1.32 16

  23. Environmental Diamond (ED)

  24. Definitions and Concepts • A graphic tool based on WB’s Development Diamond (DD) • DD: GDP per capita, life expectancy, gross primary school enrollment, access to safe drinking water • ADB Environmental Diamond (ED) • ED: air, water, land, ecosystem

  25. Development Diamond Environmental Diamond Global Average Hypothetical Country Reg’l Average Hypothetical Country GDP per capita Air 100% 100% Access to safe drinking water 100% 100% Life expectancy Ecosystem Water 100% 100% 100% 100% Primary school enrollment Land

  26. Table 5 Table 5 Selected Environmental Indicators for Environmental Diamonds Country Energy Consumption % Pop w Safe Fertilizer Use Forest Cover (%) kg/c (oil eq), 1993 Drinking water,1991 100g/ha,1993 1990 Viet Nam 77 50% 1347 25.0% Nepal 22 37% 391 35.5% Bangladesh 59 78% 1032 5.6% Lao PDR 39 28% 42 55.7% India 242 75% 420 15.7% Mongolia 1089 66% 108 8.9% Pakistan 209 50% 1015 2.4% P.R. China 623 71% 3005 13.0% Sri Lanka 110 60% 964 25.8% Myanmar 39 33% 69 42.7% Indonesia 321 42% 1147 57.5% Philippines 328 81% 540 26.0% Papua New Guinea 238 33% 308 77.8% Thailand 678 72% 544 24.8% Korea, Rep. 2863 78% 4656 65.7% Singapore 5563 100% 5600 0.0% AVERAGE 441 69% 1217 21%

  27. Table 6: Table 6: Scores for Constructing Environmental Diamonds Country Air Water Land Ecosystem (Energy Use/c) (% Pop w/o S.D.W) (Fertilizer Use/ha) (% Land w/o Forest) Viet Nam 17% 159% 111% 95% Nepal 5% 200% 32% 82% Bangladesh 13% 70% 85% 120% Lao PDR 9% 229% 3% 56% India 54% 79% 35% 107% Mongolia 245% 108% 9% 115% Pakistan 47% 159% 83% 124% P.R. China 140% 92% 247% 110% Sri Lanka 25% 127% 79% 94% Myanmar 9% 213% 6% 73% Indonesia 72% 184% 94% 54% Philippines 74% 60% 44% 94% Papua New Guinea 54% 213% 25% 28% Thailand 153% 89% 45% 95% Korea, Rep. 645% 70% 383% 43% Singapore 1253% 0% 460% 127% AVERAGE 100% 100% 100% 100%

  28. Figure 4 Figure 4. Environmental Diamonds

  29. Figure 4 Figure 4. Environmental Diamonds

  30. Table 7 Table 7 Country Rankings Based on RMS Values Rank Country RMS Total (eq. wt) (%) Group Characteristics 1 Philippines 70 A 2 India 74 A 3 Bangladesh 81 A 4 Sri Lanka 89 A 5 Thailand 103 B 6 Viet Nam 108 B 7 Nepal 109 B 8 Papua New Guinea 111 B 9 Pakistan 111 B 10 Myanmar 113 B 11 Indonesia 113 B 12 Lao PDR 118 B 13 Mongolia 146 B 14 PRC 159 B First is the best. A = less than average; B = more than average.

  31. II: SOCIAL DEVELOPMENT INDICATORS a) Human Development Index b) Social Development Elasticity

  32. a) Human Development Index(HDI) • Summary measure of three basic dimensions of human development: a. a long & healthy life as measured by life expectancy at birth b. Knowledge as measured by adult literacy rate(2/3) and combined primary,secondary & tertiary gross enrollment ratio(1/3) c. a reasonable standard of living (gdp/capita in pppUS$) • Measuring HDI a.Fix goalposts for max and min value for each b.Calculate three indices (life expectancy, education and GDP) and add them.

  33. Goalposts for calculating HDI**UNDP(2005): Human Development Report

  34. HDI Calculation______________ HDI= D1+D2+D3 Where: D1=longevity index; D2= Knowledge index and D3= standard of living index. Individual indices are calculated as: D= (actual value-min. value) /( max value-min.value)

  35. Calculating HDI 1.Calculating life expectancy index (D1) D1 =(actual value-min. value)/(max. value-min value); 2.Calculating knowledge index (D2) D2= 2/3 adult literacy index+ 1/3 gross enrollment index 3. Calculating GDP index (D3) D3 = (log actual value –log min. value)/ (log max. value – log. Min. value) • HDI = 1/3 (D1+D2+D3) (HDI values >0.8 represents “high”; >0.5<0.8 represents “medium” and <0.5 represents “low” Human Development)

  36. b) Social Development Elasticity (SDE) • SDE is a ratio : • percent change in ratios of income distribution / aggregate percent change in economy • Principal merits: • dynamic; uses data for two points in time to capture socio-economic changes w.r.t economic trends • it is a trend indicator as opposed to a state indicator

  37. Social Development Elasticity

  38. 42 Social Development Elasticity +VE Income Distribution 89 90 91 92 -VE Income Distribution

  39. 43 Social Development Elasticity +VE Income Distribution 89 91 92 90 -VE Income Distribution

  40. 44 Income Distribution

  41. 45 Income Distribution

  42. Summary & Conclusions • Indicators of SD are many; Like an automobile dashboard each indicator serves adifferent purpose • Human Development Index (HDI: determines human well-being by measuring their level of income, education and longevity • Cost of remediation (COR): indicate the amount of wealth a society has to forgo to realize environmental goals; COR as % of GDP growth indicates need for resource allocation • Environmental Elasticity (EE): expresses dynamic relationship between GDP growth and environmental degradation (environmental efficiency of economic growth) • Environmental Diamond: reveals the state of environment at a given point of time (static concept) • Social Development Elasticity (SDE): expresses dynamic relationship between gdp growth and the income gap between the rich and the poor (socio-economic efficiency of GDP growth) • To repair environmental damage already inflicted in the region, Asia needs $35b/year for 10 years; Of this, the cost of repair of land degradation (i/c solid wastes disposal) comprises 70%, air pollution control 15%, ecosystem restoration 8% and water pollution control 7%.

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