A New Index of Environmental Quality Based on Greenhouse Gas Emissions

Elettra Agliardi, Mehmet Pinar and Thanasis Stengos

Working Paper series from Rimini Centre for Economic Analysis

Abstract: A 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 figure 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.

Keywords: Environmental Quality; Emissions; Nonparametric Stochastic Dominance; Mixed Integer Programming (search for similar items in EconPapers)
JEL-codes: C14 C4 C5 Q01 Q5 Q51 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.rcea.org/RePEc/pdf/wp12_13.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:12_13

Access Statistics for this paper

More papers in Working Paper series from Rimini Centre for Economic Analysis Contact information at EDIRC.
Bibliographic data for series maintained by Marco Savioli ().