quantiative assessment measures for developing green economy
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Quantitative assessment measures for developing
Green Economy/SCP strategic policies
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What is the Green Economy/Sustainable Consumption and Production?
Customized definition, depending on country context and needs
As a result, various models could be used to analyze it, some are static and some dynamic.
Available options covering economy, environment and society: Indicators, Input-Output, Social Accounting
Matrix (SAM), Geographic Information System (GIS);
Econometrics, optimization, system dynamics.
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What is the gap (opportunity) for a Green Economy model?
Need to support policy formulation and evaluation
Need to assess policies and investments according to their impact across sectors (improving the performance of the system, rather than focusing on single indicators).
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Whats behind the Green Economy/SCP model?
A correct (although simplified) representation of reality demands careful consideration of : Policy
What interventions are being examined? What are the expected impacts?
Structure How is the problem being influenced by (and/or
impacting) the system? Science/Knowledge
What do we know about the problem? What is causing it, and how?
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PoliciesInvestment
(e.g.,capitalinvestmentinREandEEforextracapacityandretrofits)
Mandatesandtargets(e.g.,REandEEstandards,deforestation
andreforestationtargets)
Subsidies(e.g.,feedintariffsforenergy,taxrebates,paymentsforecosystem
services)
Scenarios Climatechange,energyprices,conflicts,peakoil,worldeconomicgrowth,etc.
Structure
Socialsectors Economicsectors Environmentalsectors
PopulationEducation
Infrastructure(e.g.transport)Employment
Incomedistribution
Production(GDP)Technology
HouseholdsaccountsGovernmentaccounts
Investment(publicandprivate)BalanceandfinancingGovernmentdebtBalanceofpaymentInternationaltrade
LandallocationanduseWaterdemandandsupplyEnergydemandandsupply(bysectorandenergysource)GHGandotheremissions
(sourcesandsinks)Footprint
Society
Economy Environment
Whatsbehind
the GreenEconomymodel?
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Resourceefficiency
Approach methodology
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Whats behind the Green Economy model?
The Green Economy Model should represent reality The modeling exercise should be tailored around
a set of specific issues and a geographical context.
As issues and local contexts are unique, integrated models need to be customized.
Model the problem, not the whole the system Model = a simplification of reality System = collection of parts that interact with one
another to function as a whole
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Policy Context Challenges and Solutions
1. Narrow focus cross-sectoral model
2. Reports, little flexibility to test assumptions fast simulation, with user interface
3. Research organizations have agendas objective structural representation
4. Policy makers have agendas broad stakeholder involvement
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Green Economy scenarios
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Themodelingworkincludesbiophysicalandeconomic variables
forhuman,economicandnaturalcapital,and
canestimate:
Avoidedcosts(e.g.,reducedfishlandingsfromover exploitationofmarineresourcesandcoralbleaching,and
resultingavoidedemploymentlosses)
Addedbenefits(e.g.,higherbiodiversityandproduction ofNTFP,ecotourismrevenuesandemploymentfrom
forestconservation).
Approach methodology
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Resourceefficiency
Approach methodology
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pib
investissement
+
emploi
+
stabilitepolitique
climat desaffaires
+
+procedure administrative +
legislation fiscale
fiscalite
+-
+
+
education
productivitede l'emploi+
-+
+
terreagricole
+changementclimatique
securite+
+
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investissementadaptation climatique
+productivite
agricole
+ -
population
+
+-
espaceurbain
+
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foret-
biodiversite
+- -
+
Example: Madagascar
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Example: Seychelles
gdp
tourismindustry
fisheries
++
average price pernight
+
occupancyrate-
+
state of the naturalenvironment +
quality and cost ofhotel infrastructure
quality ofservices
++
cost ofoperation
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construction+
security
+
climatechange
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planning andregulation
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impact ofconstruction onthe environment -
transportinfrastructure
quality andavailability of public
infrastructure+
++
+ touristarrivals
+-
social stability
+
+tourism industry
revenues
+
+
share of revenuessubject to
domestic taxation
+
external economicperformance +
indirectcontribution oftourism to gdp
+
+
availability oflocal manpower
other recurrentcosts
cost ofservices
+
training
availability oflocal quality
training
+
+
+reliance on
foreign manpower
-
+-+
salary of localemployees+
quality of hrmanagement
+
+-
productivity oflocal manpower
+
+
+
+
+
consumptionof inputs
cost ofsupply
++
+
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technology
consumption ofintermediate
inputs
+
+
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awarenessraising-
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-ecotourismandentertainment
+income
consumption
+
+
taxation
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investment
+-
+
savings
+- -
-
+
-
++
employment
+ +
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cost and accessto credit
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+water,
energy,land ...
financialservices
+
+
cost of operation- fisheries
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fisheryrevenues
+
fishprice
domesticfish catch
-+
turnaroundtime
+ fleet size
workersproductivity
++
+
subsidy (tax removed)+
internationalfish catch
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licensing
+
+
cost oflandings+
+
byproductsynergies
+
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The Modeling Process
1. Definition of the problem (define the boundaries);
2. Formulation of dynamic assumptions(causes and effects);
3. Creation of a simulation model (stock and flows);
4. Validation of the model5. Formulation and evaluation of policies
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System thinking is a discipline for seeing wholes.
It is a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static 'snapshots'...
Today systems thinking is needed more than ever because we are becoming overwhelmed
by complexity.
System Thinking (ST)
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Examples of analysis results
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Comparisonofscenariosforselected sectorsandactions
Sector BAU Scenariosa Green Scenarios Agriculture: Yield increase
Higher utilization of chemical fertilizers
Expansion of conservation agriculture, using organic fertilizers, among others
Energy:Expansion of power generating capacity
Thermal generation (fossil fuels) Renewable energy power generation
Fisheries: Increase production
Expansion of the vessel fleet, pushing catch in the short term
Reduction of the vessel fleet, investing in stock management to increase catch in the medium and longer term
Forestry: Increase production Increase deforestation
Curb deforestation and invest in reforestation (expanding planted forests)
Water:Manage supply and demand
Increase water supply through higher withdrawal
Invest in water efficiency measures, water management (including ecosystem services) and desalination
a Refers to BAU1 and BAU2 with additional investments allocated to match existing patterns.
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Results: Growth and Sustainability
Short term: Brown scenarios, then Green and BAU Higher growth fueled by resource extraction, cheap short term
options -BAU-. Medium/long term: Green scenarios, then Brown and
BAU. Higher growth driven by resource efficiency, which reduces
costs and secures longer term availability of key production inputs for the future.
Higher longer term resilience in Green scenarios; Clear cross sector synergies allow to reach a positive
ROI for Green cases (3:1), higher than Brown in the medium and long term.
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Results: in a nutshell (G2 vs. B2)
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Results:GDPGrowth (CCrelatedcostsarenotincluded)
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Results:EcologicalFootprint (2050values,footprintcomponentsrelativeto2010)
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Results:NaturalResourceStocks andtheEconomy
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Results:Fisheries(Fishstockrelativeto1970)
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Results:Forestry
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Results:Water
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Results:CO2
Emissions(relativetoBAU)
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Employment Job creation in both Green and Brown cases,
vs. BAU; In Green scenarios:
Considerable gain in energy and other green sectors/investments (e.g. transport);
Decline (vs. Brown), from resource conservation; Decline (vs. BAU), driven by overall social
development and productivity increases, for macro sectors (e.g. services);
Green investments have considerable potential for short term job creation and longer term resilience.
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Results:EnergyEmployment
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Summaryofthe economicanalysis
Mountains- Investments: for
reaching the stated expansion of organic farming land area.
- Employment: additional employment is calculated for GE and BAU scenarios (assuming similar organic farming land expansion under BAU).
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- Value added: calculated for different GE scenarios, compared to BAU (assuming similar organic farming land expansion under BAU).
Cumulative net value added is calculated by subtracting investments and adding additional wages from new jobs.
Summaryofthe economicanalysis
Mountains(2)
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Summary of the economic analysis -
Energy- Investments: for reaching
the stated RE and EE targets, and avoided investment in coal power generation (relative to BAU).
- Avoided costs: savings on electricity consumption (due to EE) and coal use (due to EE and RE).
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- Income creation: the employment generated leads to more income, and it can be considered an indirect benefit.
The net investment required is therefore calculated using the capital expenditure (policy-driven), avoided costs, additional savings and income created.
Summaryoftheeconomic analysis Energy(2)
What is the Green Economy/Sustainable Consumption and Production?What is the gap (opportunity) for a Green Economy model?Whats behind the Green Economy/SCP model? 5 6Whats behind the Green Economy model?Policy Context Challenges and SolutionsGreen Economy scenarios 10 11Example: MadagascarExample: SeychellesThe Modeling ProcessSystem Thinking (ST)Examples of analysis results 17Results: Growth and SustainabilityResults: in a nutshell (G2 vs. B2) 20 21 22 23 24 25 26Employment 28 29 30Summary of the economic analysis - Energy 32