By applying the eco-efficiency principle only to the micro level, the huge pressures on the naturalcapital will not be alleviated. Particularly, one of the possible unintended consequences of ecoefficiencypolicies at the micro level is the rebound effect. Rebound effects are, in essence, theloss of potential efficiency gains when a gain in resource efficiency corresponds with a lesserimprovement in resource-use. In other words, the rebound effect means that improving theefficiency of resource-use per unit is outstripped by the absolute increase in demand for the goodsand the deterioration of resource efficiency in consumption. Thus, the concept of eco-efficiencyshould be applied to both production and consumption patterns as well as macro levels.A number of measures or indicators have been suggested in recent years, such as the ecologicalfootprint, sustainability and other indicators and indices, but none has clearly shown the path toeconomic growth with less resource consumption and pollution, a key ingredient and prerequisiteof sustainable development. Even the popular environmental indexes, the EnvironmentalSustainability Index and the Environmental Performance Index (developed by the EarthInstitute, CIESEN, Columbia and Yale Universities) still focus mainly on the environment with littleconsideration of the relation between environment and the economy. Their greatest contributionis, however, that of simplicity and ease of understanding for the policymaker unfamiliar withenvironmental issues and for the general public.In this regard, ESCAP has expanded the scope of eco-efficiency beyond the production side andthe business sector to the economy-wide level. Furthermore, ESCAP has explored developing ecoefficiencyindicators (EEI) to measure the status and progress of eco-efficiency in the economy inorder to help policymakers formulate clear views on the concept of eco-efficiency and its policyimplications. EEI is particularly envisioned to respond to the different challenges of sustainabilityin the context of attaining both economic and ecological goals. These challenges include:Impacts of economic 1. activity on the environment (e.g. resource consumption, pollutionemissions, waste);2. Effects of resource productivity on the economy (e.g. economic efficiency);3. Impacts of environmental degradation on economic productivity (e.g. reduction in absorptivecapacity, loss of forest cover);4. Effects of environmental improvement on society (e.g. congestion costs, improvement in wellbeing,social costs).The ultimate goal of EEI is to provide governments with a practical tool for measuring theirperformance in the context of eco-efficiency and harness the concept of eco-efficiency for socioeconomicpolicies pertaining to environmental sustainability.

Click here to download (Pdf) ESCAP_EEI Publication 2561