TITLE:
Tackling the Stiglitz Report: Measuring Social Progress and Economic Performance under Various Climate Policy Scenarios
AUTHORS:
Koji Tokimatsu, Rieko Yasuoka, Masahiro Nishio
KEYWORDS:
Stiglitz Report, Integrated Assessment Model (IAM), Genuine Savings Human Development Index, Quality of Life, Net photosynthetic Primary Production
JOURNAL NAME:
Modern Economy,
Vol.10 No.11,
November
20,
2019
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.