Macroeconomic Sustainability Assessment

A4 approachThe subproject A4 “Macroeconomic Sustainability Assessment” examines the sources of globally increasing greenhouse gas emissions. We investigate potential conflicts between different sustainability dimenisons, in particular between environmental quality and macroeconomic- and social development. We particularly investigate the role of manufacturing sectors for sustainable development.
We can show that global emissions have been increased due to a renaissance of carbon-intensive coal as a cheap source of energy. This especially holds true for poor, fast growing economies. In fact heavy manufacturing industries in developed countries deploy increasingly efficient technologies to reduce emissions, however, production facilities are generally shifted to countries like China, India or Vietnam. Our understanding how economic growth, energy demand and emissions are interlinked has been made accessible by recently released, multi-regional input-output data (MRIO) with high sectoral and regional resolution.
Based on MRIO data we are able to estimate the possible influence of innovative and efficient technologies on the future development of greenhouse gas emissions. We find that the world could remarkably cut down emissions, if the most inefficient technologies were replaced.
Applying empirical techniques established in physics to MRIO data (partially > 1bn data points), we can identify patterns of economic sectoral structural change for different stages of economic development. We find that developing from an economy based on primary sectors to a service oriented economy is not a gradual process. Results indicate that achieving a low-carbon service-based economy is not possible without temporally building up energy intensive industries. It seems likely that only the buildup of those key sectors allows economies to grow continuously and sustainably.
Future research will focus on understanding the interdependencies between those development-relevant sectors and their impacts on societies.

Learn more about challenges, approach and results of project A4 in this Powerpoint presentation.