Workshop on Integrated Green Economy Modelling tool held in Geneva

Geneva, 22 April 2016 A workshop on the first country results of the application of an Integrated Green Economy Modelling (IGEM) tool took place in Geneva, organized by the Partnership for Action on Green Economy (PAGE), under the United Nations Environment Programme (UNEP)’s leadership. The workshop presented  the case of Mexico and the application of the IGEM to assess the implementation of the Climate Change and Energy Transition Laws.

The IGEM tool has been developed to combine the strength of economic modelling of a Computable General Equilibrium (CGE) model with the social and environmental modelling of a system dynamics model. The IGEM tool is designed to serve three purposes: it builds on UNEP’s past country experience with modelling green economy policies to answer increasingly complex requests from governments; it supports the endowment of countries with solid quantitative tools to inform the design and implementation of green economy policies; and it advances the process of implementing and monitoring some of the Sustainable Development Goals (SDGs).

As an introduction to the workshop, the video “Informing Green Economy Policy-making through modelling and assessments” was presented.

Representatives from two PAGE countries, Peru and Mongolia, participated in the workshop. Peru presented the experience with the T-21 model ("Modelling green growth policies in the agriculture, forestry and transport sectors in Peru”). In addition, a representative from Colombia exposed experience with the use of a CGE model to assess the impacts of implementing Colombia’s Intended Nationally Determined Contribution.

Since the launch of the Green Economy Report (GER) in 2011, UNEP`s Economics and Trade Branch has supported countries in the development of a Green Economy Policy Assessment (GEPA). In September 2014, PAGE published a report entitled “Using models for green economy policymaking” to provide a framework to countries interested in green economy strategic planning exercises and held a workshop entitled “A Technical Workshop on Improving the T21 Model”.

The workshop offered a platform for exchanges on past experiences with modelling tools at the country level. The workshop also promoted an extensive exchange of ideas from a wide range of modellers who provided valuable comments on the way to apply the IGEM tool at the country level. The participants reflected on how the IGEM tool could be further developed to integrate other relevant dimensions to the green economy (e.g. fiscal policy and trade aspects) and the links with the SDGs.

Background


Since the launch of the Green Economy Report (GER) in 2011, UNEP`s Economics and Trade Branch has supported countries in the development of a Green Economy Policy Assessment (GEPA). A GEPA is a critical part of the work of policymakers to develop and adopt green economy policies to achieve sustainable development targets. A typical GEPA includes five activities:

1) establishing priority sustainable development targets based on the overall development plans of countries;

2) estimating the amount of investments required to achieve the targets;

3) identifying the policies or policy reforms that are essential for enabling the required investments;

4) assessing the impacts of the required investments as well as the enabling policies using a range of economic, social and environmental indicators and comparing the results with the business-as usual scenario; and

5) presenting the assessment results to inform the making of decisions. Modelling is a useful tool for GEPAs, in particular in activity 4) of the GEPA, to help analyse the effects of existing policies and discover the relationship between policy targets and relevant policy change. Furthermore it helps identify synergies and cross sector impacts among policy choices.

Introduced by UNEP for the first time in the GER (2011), the Threshold 21 (T21) World model made the economic case of investing 1% and 2% of global GDP in greening key economic sectors, namely, water, agriculture, forestry, fisheries, energy, tourism, waste, transport, buildings, and manufacturing. Following the same basis as the T21 World model, UNEP has gone on to conduct GEPAs, including customized national level T21 models for a number of countries in Africa, Latin America and Asia.

In May 2013, UNEP under the framework of PAGE, held a workshop on ‘Modelling Inclusive Green Economies’ at the University of Bergen, Norway, to take stock of the major modelling tools that could be used to assist policy making for an inclusive green economy and green growth development at the country level, as well as at sub-national and sectoral levels.

In September 2014, PAGE published a report entitled “Using models for green economy policymaking” to provide a framework to countries interested in green economy strategic planning exercises and held a workshop entitled “A Technical Workshop on Improving the T21 Model” with active participants from the Millennium Institute, the Institute for Global Environmental Strategies (IGES), the Institute for Sustainable Development and International Relations (IDDRI), the Centro Studi sul Federalismo (Italy), the University Iberoamericana Puebla (Mexico), the United Nations Environment Programme, the United Nations Industrial Development Organization (UNIDO), the International Labour Organization (ILO), the University of Bergen and Shanghai University.

During the workshop some important areas for improvement of UNEP’s modeling tools were identified: (a) the need for more environmental indicators, particularly regarding the environmental footprints of different policy options; (b) the need to capture multi-country dynamics such as trade; (c) the need to appropriately address short-term impacts; (d) the need to better track inequality and other important inclusiveness variables.

Taking into account the recommendations from the workshop and given the lessons learned from many of the country applications, UNEP decided to better integrate the current inclusive green economy modeling tools. To achieve this, in December 2014, PAGE under UNEP’s leadership initiated the IGEM tool project.