Sustainability perspectives: a new methodological approach for quantitative assessment

Abstract

This paper proposes a new tool to assess sustainability and make the concept of sustainable development operational. It considers its multi-dimensional structure combining the information deriving from a selection of relevant sustainability indicators belonging to economic, social and environmental pillars. The main novelties of this approach are the modelling framework, a recursive-dynamic computable general equilibrium used to calculate the trend of all indicators over time throughout the world, and the aggregation methodology to reconcile them in one aggregate index to measure overall sustainability. The former allows capturing the sector and regional interactions and higher-order effects driven by background assumptions on relevant variables to depict future scenarios. The latter makes it possible to compare sustainability performances, under alternative scenarios, across countries and over time. Main results show that the current sustainability at world level differs from what the traditional measure of well-being, the GDP, depicts, highlighting the trade-offs among different components of sustainability. Moreover, in the next decade a slight decrease in world sustainability may occur, in spite of an expected increase in world domestic product. Finally, dedicated policies increase overall sustainability, showing that social and environmental benefits may be greater than the correlated economic costs.