Transcript Thinking Outside the Box

You cannot solve the problem with the same
thinking that created the problem Albert Einstein
Sustainable Development:
Thinking Outside the Box
Dr. John Shilling
Chairman Board of Trustees
Millennium Institute
May 16, 2012
Foundation of Development
• Both the economy and society depend on
the environment to function and survive
• The economy also depends on the society
to progress
• The economy sits on top and can only
function if its foundations remains solid
over the long term
Conventional Wisdom
• GDP and GDP/capita growth are the main
targets
• Free Trade assures security
• Achieving the MDGs results from more
growth
• Environmental Impact Assessments are
sufficient to protect the environment
Conventional Assumptions
• No limits to economic growth
– It depends on population growth
– Resources are always available
– Or technology will produce alternatives
• Short term targets are best considered as
they will accumulate over time
• Externalities, public goods, and the
commons do not affect GDP so are not
important
Questions About Them
• Consider exponential growth over the
longer term
• Consider limited stocks of resources
• Consider the effects of externalities,
including climate change and volatility
• Consider the importance of public goods
and the commons
The Risk of Staying in the Box
• Ignoring effects beyond one’s sector of interest
• Predictions by sector specialists more often
wrong than expected
• Hard to reach agreement with other special
interests
• Don’t take account of critical limitations
• These pose a risk to sustainable development
• Our global footprint rose from 1 in 1975 to 1.5
now and will be more than 2 by 2050
How MI Got Out of the Box
• Global 2000 Report in 1980 by US Gov.
• International interest, but not national
• MI’s founder, Jerry Barney, sought more
integrated modeling tools to have a more
consistent approach
• Discovered System Dynamics and created
the Threshold 21 model
Conventional Models in the Box
• Accounting models
– RMSM – X and IMF
– Mostly exogenous assumptions to check
balances in the short term
• Computable Equilibrium Models
– Basic ones, up to MAMS
– Start with comparative statics, do little to
describe transition process, take little account
beyond the economy, mostly short term
The SD Approach in T21
• Based on real world causal relations
• Includes economic, social, and environmental
dimensions
• Takes account of relations within and across
sectors and dimensions
• Generates long term scenarios to take
account of lags and see what is likely to
happen over time
• Compares the results of different policies and
assumptions going forward
Why Take a Systemic View?
We Need to be Careful
To Avoid Unexpected Results!
Factors to Take into Account
• Economic and social factors
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Impacts of depletion of resources – forests, fish, minerals
Impacts of waste and pollution
Food and Energy Security
Health and education factors
• Public Goods and the Commons
– Climate change impacts and clean air
– Ecosystem protection, Water management, etc.
– Resource access for poor
• Positive and negative feedbacks
• Assuring wellbeing of humans and bio-systems
• Keeping track of all these factors over the long term to
maintain the security of our life styles for our posterity
To Address Challenges
• Understand real relations in the situations we
face, within and beyond sector-specific focus
• Incorporate interactions and feedback loops
across different sectors into models
• Take account of longer term effects and lags of
different impacts coming into play
• Make sure depletion of natural capital contributes
to investment in human and physical capital
• Examine the results of different assumptions,
investments, and policies to make better
decisions
A Systemic Approach Works
• We need to deal with systemic issues
– Economic activities affect society and the environment -- Pollution and
GHG leading to climate change
– Social activities affect the economy and environment -- Migration and
deforestation
– Environmental factors affect the economy and society -- Soil erosion and
heat waves
• A longer time frame is important
– Some beneficial long-term have short term costs – Watershed
management, infrastructure, agricultural transformation
– Some short-term benefits reduce sustainability – deforestation, mineral
exploitation
• Integrating sectors provides a more comprehensive and
beneficial basis for better policies and ROI
The Threshold 21 Approach
• Composed of three main pillars
 Economic -- SAM, key market balances, and production
 Social -- dynamics in population, health, HIV/AIDS, education
 Environmental – natural resource use, GHG emissions, land
availability
• Adapted to priority goals and vision for each individual
country based on its own data, structure, and patterns of
activity
• Highlights inter-sectoral feedbacks
• Tracks progress on MDGs and other indicators
• Calibrated against history to provide reality checks
• Generates multiple medium-to-long-term scenarios to
compare
• Transparent and easy to use
The Basic T21 Structure
production
population
labor
investment
health
society
infrastruc
ture
education
poverty
technology
economy
energy
government
households
row
land
climate
change
water
environment
emissions
minerals
sustainabi
lity
The Key Connections in T21
Key T21 Characteristics
• Adapted to structure and speficif issues of country being
modeled
• Incorporates other sector models into its framework and
adds cross sectors links
• While highly complex, it is also quite transparent and
provides causal tracing
• Building model contributes a lot of understanding about
country’s structure
• Remains a work in progress
• Provides the basis for inter-ministerial cooperation
• Taking account of these relations would help achieve
better results on the Bank’s goals
Critical Issues T21 Addresses
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Climate Change mitigation and adaptation
Energy and Food security
Natural resource management
Conflict and Risk analysis
Natural disaster management
Achieving sustainable development and MDGs
Long term analysis
Building indigenous support
Examples of T21 Work
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Bangladesh and education
Bhutan and expenditure sharing
Mozambique and health effects of economic
Ghana and achieving MDGs quicker
USA and CAFÉ standards
China and GHG emissions and behavior change
Jamaica and natural disasters and civil risks
Assisting UNEP on the Green Economic Report and
GEO-5
• Dealing with Climate Change in countries like
Bangladesh, Kenya, Namibia, Indonesia,
MI Around the World
T 21 Countries
MI Partner
MI Head Office
M 3 Countries
MEG Countries
Demonstrate Running T21
How T21 Is Applied
• Build country advisory committee
• Train local team
• Define objectives and policies to be
considered, including CC and food security
• Develop with the local team and transfer the
model to them
• Provide continued support for updates and
M&E
Thank You for Your Attention
Questions and comments are welcome
www.millennium-institute.org
[email protected]
What Partners and Clients Are Saying
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“MI’s integrated dynamic models have been vital for GM’s sales forecasts”
Paul Ballew, GM
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“MI’s long-term, integrated perspective is essential”
Pablo Guerrero, World Bank
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“MI’s T21 analytical tool is essential for effective national development strategies”
Ed Cain, Carter Center
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Fascinating!
David Cohen, Counterparts International
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If only we had known such a tool existed….
Chorus of planning experts from 11 countries in Southern Africa
We need to use this tool at the Headquarters, in our embassies and help our country partner
acquire it…
Dutch Ambassador Ton Boon von Ochsen
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I want that T 21 planning team in my office…
Président Amadou T Touré, Mali
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It has been my dream since ten years to get the the POIJ departments to work
together…now its happening with T21; With T21 I can see team building and networking
across the ministries and government agencies and effective communication
Wesley Hugh, Director Planning office Jamaica