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Environmental Performance Index 2014 JRC Analysis and Recommendations

Abstract: 
The latest edition of the Environmental Performance Index (EPI) was presented and discussed on January 2014 during the World Economic Forum (WEF) Annual Meeting in Davos. The EPI is released biannually since 2006 by Yale and Columbia Universities, in collaboration with the Samuel Foundation and the WEF. The EPI ranks how well countries perform on high-priority environmental issues concering the policy areas of environmental health and ecosystem vitality. The JRC’s Econometrics and Applied Statistics Unit was invited for a fifth consecutive time to perform a statistical audit the EPI, focusing on two main questions: 1) Is the EPI multi-level structure statistically coherent? 2)What is the impact of modelling assumptions on the 2014 EPI ranking? The 2014 EPI was found to be well-balanced with respect to its two policy objectives , which were also adequately correlated to justify their aggregation into an overall index. Satisfactory correlations were observed between indicators and respective EPI issue areas, implying meaningful indicator contributions to the variance of the aggregate scores. Possible refinements of the index mainly concern the issue areas of Forests, Fisheries and Agriculture, which do not seem to contribute significantly to the EPI ranking. The JRC’s uncertainty analysis investigated the robustness of EPI country ranks to two key choices: policy objective weights and aggregation function. The choice of aggregation function at the policy objectives level was found to be the main driver of the variation in country ranks, accounting for a much greater share of the observed variance in country ranks. This suggested that future deliberations on the index’s methodology should focus primarily on the choice of aggregation function.
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