Moving Towards Integrated Policy Formulation and Evaluation: The Green Economy Model

Abstract

The mainstreaming of concepts related to the Green Economy, an action-oriented approach to reach sustainable development, has increased demands for integrated models that can shed light on the complex relations existing across social, economic and environmental indicators. A gap exists, whereby our thinking is rapidly evolving, but the tools available are still in the vast majority of cases sectorial, leading to planning processes taking place in silos. To avoid the emergence of side effects, and anticipate future threats and opportunities, a more systemic approach is needed. The Green Economy Model (GEM) was created taking into account four main capitals and their interconnections: physical capital, human capital, social capital and natural capital. The application of GEM in 10 countries has shown its capability to coherently represent reality and generate results that can more effectively inform decision making.

Green Economy Modelling of Ecosystem Services along the “Road to Dawei”

“…In addition, in a green economy approach natural capital is maintained and restored and nature's resources and benefits are shared more fairly. Figure 2 shows graphically how green economy investments and interventions that support the conservation of natural capital while promoting an inclusive and resilient economy would reduce the cost of externalities and effectively contribute to sustainable development [20,22,23]. By "greening" a higher share of total investment and supporting the creation of a more resilient economic system (where natural capital is seen as an enabler rather than as a resource to exploit), we observe a modification of the historical trend.…”

“…Investments are needed to match the increasing request for social services, to allow businesses to flourish, and to further stimulate economic growth, as done by all other developed economies [21]. While Stiglitz [22] shows that sustained economic growth is possible so long as the reproducible factor of production (physical capital) can be substituted for exhaustible natural resources along the economy's balanced growth path, later research into the relationship between economic growth and environmental quality suggests that a simultaneous steady-state growth and a non-deteriorating environment are not only possible [18] but likely the only pathway to truly sustainable development [20].…”

“…Five main steps are considered for the development of GEM [22]: (1) issue identification and agenda setting; (2) policy formulation and assessment; (3) decision making; (4) implementation; and (5) monitoring and evaluation. The use of System Dynamics allows for the socioeconomic implications of different actions to be assessed across sectors (social, economic and environmental) and actors (e.g., households, private sector and the government), within and across countries.…”

Applying Systems Analysis to Evaluate Options for Sustainable Use of Peatlands in Central Kalimantan in Indonesia

“…Because of the significant influence of the El Niño Southern Oscillation (ENSO) on fire activity in Indonesia [41], the KT-GEM integrated an ENSO indicator, namely Nino3.4 Sea Surface Temperature (SST) Index to forecast fire hotspots. 3 Historical dry season data from the Nino3.4 SST Index from 2000 to 2014 and MODIS-derived hotspot data from 1998 to 2006 from Reynolds et al [38] were used for the assessment. Data from the Nino3.4 Index was extrapolated to create a trend in the relationship between SST and hotspots until 2030.…”

“…This study aims to provide an initial investigation on the impacts of the large scale use of paludiculture development, as an effort to restore degraded peatlands. It will do so by modeling the impacts of jelutung development and other peatland management strategies in Central Kalimantan using an extended version of the Kalimantan Green Economy Model (KT-GEM) [3,43,44]. This model is a regional application of the Indonesia Green Economy Model (I-GEM) that was developed to inform, strengthen, and facilitate long-term policy planning and financing within the transition toward a Green Economy by evaluating the trade-offs between conservation and development scenarios [43,44].…”