A New Index of Environmental Quality Based on Greenhouse Gas Emissions
AbstractA weighting scheme is proposed to construct a new index of environmental quality based on greenhouse gas (GHG) emissions for different countries using an approach that relies on consistent tests for stochastic dominance (SD) efficiency. The benchmark is an index that is based on the average actual contributions of the respective GHG emission types to the total. Our index stochastically dominates the chosen benchmark and allows us to gure out the “worst” and “best” case scenarios, where environmental degradation is at its maximum and minimum, respectively. If a common global action were to be taken by all countries involved, these scenarios would correspond to the most and least effective possible actions, respectively, that could be undertaken when compared to the benchmark. Then, countries are ranked and their rankings are compared with alternative rankings (e.g., the Kyoto Protocol, Annex I, and the Environmental Sustainability Index, ESI). The test statistics and the estimators are computed using mixed integer programming methods. Then, employing a complementary SD approach, pairwise SD tests are employed to examine the dynamic progress of each separate GHG emission (i.e.,CO2, methane, nitrous oxide, and other GHG emissions) over time, from 1990 to 2005, within 5-year horizons. Pairwise SD tests are used to examine the major industry contributors to the GHG emissions at any given time and to uncover the industry which contributes the most to total emissions.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 12_13.
Date of creation: Jan 2013
Date of revision:
Environmental Quality; Emissions; Nonparametric Stochastic Dominance; Mixed Integer Programming;
Find related papers by JEL classification:
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
- NEP-ENE-2013-02-16 (Energy Economics)
- NEP-ENV-2013-02-16 (Environmental Economics)
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