The FEEM Sustainability Index (SI) project aims at creating an aggregate index, which incorporates new innovative features. In fact, the FEEM SI is built on indicators obtained from a computable general equilibrium model, thus the index can be calculated for different countries, in different years, and under different policy assumptions. This unique feature permits to assess the effects of policies on sustainability.
The FEEM SI is constructed on innovative normalisation and aggregation procedures. The normalisation is based on benchmarking, where thresholds are derived from a wide research on policy targets. Aggregation is constructed through a methodology in which weights are attributed to indicators and to combinations of indicators.
A solid and sophisticated methodology for construction, and the possibility to project the values of the index in the future according to different policy assumptions, make the FEEM SI a very novel instrument in the assessment of sustainability.
Main Results and Outputs
Results show that it is possible to construct indicators from a computable general equilibrium model and to use them for projections of sustainability, including rankings of different countries and regions, analysis of the changes in the different indicators and components of sustainability, over time and cross country comparisons. This permits to study the effects that the predicted growth path will have on the sustainability of the different countries and regions for which the FEEM SI is calculated.
Results on the methodology for the construction of the FEEM SI show that the normalisation and aggregation methodologies are well suited to the project, and that they improve on more classical methodologies, such as standardisation for the normalisation and Equally Weighted Average (EWA) for the aggregation.
