Aggregate Dynamic Economic—Ecological Models for Sustainable Development

Abstract

The aim of the paper is to formulate a general integrated aggregate dynamic model for sustainable development, that will be both simple in structure and able to deal with the main objectives, processes, and constraints applying to sustainable development in closed economic — ecological systems. General characteristics of models to be used for sustainable development are discussed. It turns out that such models do not exist. Short critical descriptions are given of representative analytical models that have arisen in theories on economic growth with renewable and nonrenewable resources, and pollution, or that provide an interesting alternative view of economic — environmental interactions. These models appear to provide incomplete descriptions of economic, ecological, and interactive processes. To clarify the logic and special features of the general model, three issues are addressed. First, a general ecological model is proposed that is consistent with a macroeconomic system in terms of geographical coverage. Such a general model would have to be able to deal with a specific set of general functions and characteristics of ecological systems. Second, the meaning of some economic, ecological, and physical concepts for modelling is discussed. Third, the potential for inclusion of sustainable development conditions is examined. Next, the general structure of an economic — ecological model for sustainable development is presented. It includes the general ecological model, descriptions of economic activities and dynamics, material and economic balances, constraints, and behavioural feedback mechanisms related to sustainable development conditions. It is shown how concern for the well-being of future generations can be included. Simulation is used to obtain insight into the behaviour of the system under different policies and scenarios. Several environmental policies can be studied, including waste treatment, recycling, research and development, and environmental cleaning. Resource use strategies may include sustainable use and specific division of extraction between renewable and nonrenewable resources. Resource-use and waste-emission strategies may be based on variable degrees of concern for future generations. The relevance of this model is that it allows for a study of the medium-term and long-term dynamic economic and environmental consequences of sustainable development conditions and variable degrees of concern for future generations. Its purpose is not to investigate the conditions under which the entire system will (n)ever breakdown.