Abstract
This paper attempts to connect the measurement of social progress from the Stiglitz report and climate change mitigation (CCM) by the Intergovernmental Panel on Climate Change (IPCC) assessment reports. Each report has been addressed insufficiently on the issue, although both reports have common interests in development patterns and pathways for the economy, humanity, and society. This study used our original integrated assessment model and applied for measuring various indicators for sustainable development, such as genuine savings (known as GS) and human appropriation of net photosynthetic primary production (HANPP). We expanded an analysis of sustainable development indicators of quality of life (QoL) and of the human development index (HDI) and introduced a modified quality of life indicator. These indicators expand on the “classical” GDP loss, which has been well analyzed in the majority of CCM literature. Our model’s main framework is based on the Regional Integrated model of Climate and the Economy (RICE) extended from Ramsey-Cass-Koopmans with a simplified climate model and added three original resource balance models with environmental consequences with a life cycle impact assessment (LCIA) model. We prepared various climate policy scenarios ranging from business as usual to economically efficient, CO2 double stabilization, and targeting two degrees Celsius (DC). We believe this work has three contributions. First, in contrast with the World model by the Limits to Growth, our model has an economic foundation where genuine savings is introduced. Second, while the Stiglitz report only extrapolates the current genuine savings trend, we are able to calculate the future trajectories of sustainable development indicators, based on a sophisticated integrated assessment model. Third, when compared to the RICE analysis, which sought the optimal climate policy in the sense of cost-benefit analysis, our model introduces indicators of sustainable development in assessing climate policies.
Highlights
The Stiglitz report [1] rests on three main pillars for reforming global monetary systems after the financial crisis of 2007-2008—classical gross domestic product (GDP), quality of life (QoL), and sustainable development and environment (SD & E)
We examine future projections of adjusted net savings (ANS) and human appropriation of net photosynthetic primary production (HANPP) for the SD & E using well-defined human development index (HDI), modified indicators for QoL, and GDP for “classical” economic performance
Representative Agent Our modeling strategy is based on an Integrated Assessment Model (IAM), combining a RICE model for climate change assessment with the life cycle impact assessment (LCIA) model
Summary
The Stiglitz report [1] rests on three main pillars for reforming global monetary systems after the financial crisis of 2007-2008—classical gross domestic product (GDP), quality of life (QoL), and sustainable development and environment (SD & E). GDP is the most used measure of economic activity globally. The measurement of QoL is categorized into three approaches: subjective well-being (SWB), capabilities, and welfare economics and fair allocations. Quality of life is comprised of material living standards (e.g., income), health, education, personal activities (e.g., paid and unpaid work, commuting, leisure time, and housing), political voice and governance, social connection, environmental condition, and insecurity. These conditions can be functioning (people’s doings, e.g., working and commuting, and people’s being, e.g., healthy and educated) or freedom (e.g., political voice and participation). The HDI is the representative indicator aggregating across those various domains, health, education, and living standards
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