Modelling Sustainability - European and German Approaches

Abstract

Sustainable Development is probably the key new paradigm on which to base policies for the future. However, so far the concept remains vague at best in many aspects, and in particular as regards the interaction environmental, economic and social politics. Based on some theoretical considerations this paper defines minimum conditions for sustainable development. This provides minimum conditions for the suitability of economic models for sustainability questions, as well as a criterion to assess the sustainability of the scenarios presented in the remainder of the paper. Both models introduced are shown to meet these requirements.
This paper presents two such models. One (PANTA RHEI) is a highly sophisticated econometric model for the German economy (Meyer et al. 1999). The other one (SuE) is less disaggregated system dynamics model for the EU 15 economy (Spangenberg, Scharnagl 1998). Both include the measuring of energy and material consumption and are thus well suited to indicate the linkage of economic development and environmental impact. Similarly, both calculate the employment effects of a given policy, permitting to include one key social concern in the evaluation of sustainability policies as well.
When comparing the results of similar strategies simulations run on both models, their inherent structural difference rules out any methodological bias or system artefact. All the more relevant are those outcomes that point into a similar direction for policy development, having a base in two independent, structurally independent policy impact assessments. Key results include:
There is a trade off between growth and employment on the one and environmental concerns on the other hand, however sustainable compromises are possible.
No single policy instrument (neither legal measures nor economic incentives) is able to deliver a sustainable economy. What is needed is an intelligent mix of economic, social, environmental and labour policy measures.
If such a combined strategy is applied, it is possible to reduce the currently unsustainable high unemployment levels to significantly below five percent of the labour force, while at the same time reducing resource consumption, safeguarding or increasing the standard of living and not running into significant public debt.

Key words: Sustainability, Modelling, IO-Analysis, Embodied Energy Accounting, Dematerialisation, Employment.