Systemic modelling tools to assess the green economy transition

24 Jun 2020

The report discusses the modelling frameworks and results presented in the EEA report ‘Sustainability transition in Europe in an age of demographic and technological change. An exploration of implications for fiscal and financial strategies’. Assessing the complex interactions between an ageing population, technological transition and fiscal sustainability calls for the use of integrated models. The two modelling exercises specifically developed to manage this complexity more effectively:

  1. a qualitative systemic approach using causal loop diagrams based on systems thinking to analyse the simultaneous impact of social, economic and environmental variables on a system’s performance; and
  2. a computable general equilibrium model to forecast the impacts of an ageing population, technological change and environmental policies on fiscal sustainability and macroeconomic performance.

The modelling approaches are used to understand and visualise the many and sometimes diverse outcomes of drivers and constraints, including the many — and sometimes unexpected — indirect effects.