New environmental performance index for measuring sector-wise environmental performance: a case study of major economic sectors in Pakistan

The study develops slack-based environmental performance index (SBEPI) to conduct the environmental performance of Pakistan’s major sectors of the economy, which include agriculture, manufacturing, transport, power, construction, and mining and quarrying (M&Q) sectors. The index computes environmental efficiency scores based on three critical indicators, total primary energy consumption (input indicator), gross domestic product (desirable output), and CO 2 emission (undesirable output). The study undertakes analysis for a period of 10 years from 2008 to 2017. SBEPI score of 1 is set to indicate efficient performance, while score of 0 translates inefficient performance. The results of the studied period reveal that all the sectors underperform for considered indicators. For instance, the top-performing agriculture sector could only achieve an SBEPI score of 0.00008275. The analysis also does not reflect any signs of performance improvement for the studied sectors. To validate the results of this study and highlight the advantages of SBEPI, the study compared SBEPI results with conventional environmental index (EI). The comparison results reveal that SEBPI results are more realistic and the index holds higher discriminatory power than conventional EI. Based on this study’s results, some policy recommendations for the government and other sectoral leaders to improve sectoral environmental performance are provided.