A sensitivity analysis of the Korean composite environmental index

Abstract

The purpose of this paper is to carry out a sensitivity analysis of the Korean composite environmental index (CEI) by examining the CEIs computed by functional forms and those derived from opinion surveys, with a special emphasis on the assessment of weights of environmental indicators and themes: the CEIs are based on environmental themes and pressure indicators. The trends of CEIs had minor gaps according to survey types, survey years, and functional forms, but their effects on the CEI were not strong enough to alter the general trend, which is a clear deterioration of the environment. The Korean CEI has been deteriorating in proportion to economic growth. The annualized growth rate of real GDP and the annualized deterioration rate of environment for 1986–1997 were 7.8 and 5.6%, respectively, and a linear regression of CEI on real GDP over the same period showed a close, positive relation, specifically that a 1% growth of real GDP caused a 0.7% deterioration of the environment. The principal cause of the deteriorating environment is the priority given to economic growth over environmental preservation in the Korean drive for economic development.