This week the Yale Center for Environmental Law and Policy releases its first official Environmental Performance Index, the preeminent ranking of countries' dedication to environmental protection. (Yale released a pilot version of the list in 2006.) The list uses a variety of metrics, including carbon and sulfur emissions, water purity and conservation practices, to calculate an overall score for each country. Although the wealthy Scandinavian countries dominate the top five, and poor African nations the bottom five, there are a number of surprises along the way. Colombia, for instance, rings in at number nine, ahead of France, Canada and Germany. Daniel C. Esty, head of the Yale Center and a former policy maker at the U.S. Environmental Protection Agency, spoke with NEWSWEEK's Barrett Sheridan about the list. Excerpts:
Not that it's surprising, but there seems to be a strong correlation between a country's wealth and its environmental stewardship.
There's no doubt that wealthier countries have more resources to invest in environmental amenities, like safe drinking water or pollution controls or better air quality. But what is impressive is that at every level of development we find there are some countries that are outperforming their income-group peers, and others that are lagging. So while income is very important for good environmental results, it turns out that good governance is also critical.
Which countries surprised you in their placement?
Costa Rica, by no means a rich country, is in fifth place, reflecting the fact it has taken environmental policy very seriously. It's committed to making [environmentalism] a cornerstone of the national identity.
I was surprised that Eastern European countries place well on this list. They make up six of the top 20.
The Eastern European countries have made large strides in cleaning up the legacy of Soviet-era dirty industries. They share with their Scandinavian neighbors a real commitment to environmental protection, and I think that comes through in the data. They also have a lot of nuclear power.
In the past you've been smart enough to spotlight trends that ended up becoming very influential in the environmental world. For instance, you accurately forecast the business world's embrace of all things green.
That is something I've been watching for 15 years, since I was at the Environmental Protection Agency. One of the big awakenings of the last few years is the recognition that a critical point of leverage for environmental progress is actually business and not the government. That's not to say that government doesn't have a critical role to play; structuring incentives to guide behavior in the private sector is very, very important. It requires clever policy. But if you want to really produce better results, the key is to get the business world, particularly the entrepreneurial part of the business world, geared up to invest in technology development.
In the past, the mentality was that environmental and business interests ran in opposite directions.
The World Economic Forum's competitiveness rankings actually correlate quite highly with our Environmental Performance Index. So contrary to the old 1960s development theory that countries that spend a lot on the environment will burden industry and underperform economically, it appears that the opposite is true: countries that are attentive to good environmental management have good business management as well.
What countries have melded business opportunity and environmentalism most successfully?
The Scandinavian countries, in particular, have made investment in environmental business an important part of their economic base. For example, the largest solar power company is in Norway, which is number three on our list. A number of Swedish companies have made a good environment a part of their business model, IKEA being one example and Volvo another.
What can the United States, which has a relatively poor record on environmental issues, do from a governmental perspective?
The U.S. has slipped down a number of notches on this index; we're sitting at 39th place now. We have not put incentives in front of our business community to pay attention to reducing greenhouse gas emissions, to figure out energy efficiency strategies, to invest in alternative energies, or pursue opportunities like carbon capture and sequestration. But the U.S. business community, even without the government playing a helpful role, has begun to step up to these issues, because they perceive that there is a strong possibility of climate change controls coming with the next administration.
Who's been particularly good?
Take GE, for example. Under the famous Jack Welch, who was CEO until 2001, GE was kind of an environmental bad actor. They polluted the Hudson and Housatonic rivers, and Jack Welch fought the EPA for years about those cleanups. Jeff Immelt settled those cases and really turned GE in a dramatic way toward being an environmental solutions provider. They've got a huge investment in efficient locomotives, efficient jet engines, wind power, solar power, clean water—really, across the board. That's a dramatic redirection in the company.
In his book "Supercapitalism" former labor secretary Robert Reich argues that businesses will always put profits first and that corporate social responsibility efforts are a smokescreen.
I don't disagree. I think that those that think you're going to rely on corporate social responsibility to get done the important work of environmental protection are fooling themselves. But if government regulates in ways that are modern and smart and harness market forces, you can get a lot further for lower cost.