Uncertainty and Sensitivity Analysis of the 2010 Environmental Performance Index

Abstract

Abstract An assessment of the robustness of the 2010 Environmental Performance Index (EPI) ranks requires the evaluation of uncertainties underlying the index and the sensitivity of the country rankings to the methodological choices made during the development of the Index. To test this robustness, the Yale and Columbia University have continued their partnership with the Joint Research Centre (JRC) of the European Commission in Ispra, Italy. This JRC report shows that although the theoretical framework and the indicators for the EPI were carefully chosen by experts, the issue of weighting is crucial to obtain a robust performance index. The current weighting and normalization schemes result in an EPI that is dominated by very few indicators while having an almost random association with several other underlying indicators. With respect to the five main assumptions tested in the uncertainty and sensitivity analysis, the country ranks are relatively reliable for 109 countries, while any conclusion on the ranks for the remaining countries should be made with great caution. An equal weighting approach or factor analysis-derived weights at the indicator level, as opposed to the current weighting scheme greatly influences the ranks. Thus, the choice of the weights must be evaluated according to the EPI’s analytical rationale, policy relevance, and implied value judgments. If the objective of EPI is to promote action on all policies categories more work would be needed to ensure that all policy fields have an impact on the aggregated EPI or, alternatively, policy categories should be given more emphasis than the aggregated measure. The 2010 EPI is developed for 163 countries and is based on twenty five indicators grouped in ten policy categories: Environmental burden of disease, Air pollution (effects on humans), Water (effects on humans), Air Pollution (effects on ecosystem), Water (effects on ecosystem), Biodiversity & Habitat, Forestry, Fisheries, Agriculture and Climate Change. The EPI ranking is assessed by evaluating how sensitive the country ranks are to the assumptions made on the index structure and the aggregation of the 25 underlying indicators. The assumptions tested by the JRC-IPSC are: • measurement error of the raw data, • EPI structure – grouping at policy categories, • weights assigned to the indicators and/or to the policy categories, • aggregation function at the policy or at the objectives level, and • number of indicators or policy categories.