Measuring sustainable development for the future with climate change mitigation; a case study of applying an integrated assessment model under IPCC SRES scenarios

The Intergovernmental Panel on Climate Change (IPCC) described mainstreaming climate change mitigation into development choices in its Fourth Assessment Report, chapter 12 of Working Group III. It also pointed out that “few macro-indicators include measures of progress with respect to climate change” despite the needs for the inclusion. This paper tackled this point in the following ways by applying an integrated assessment model. First, this study applied shadow prices and production, endogenously obtained from the model, instead of using market prices and statistical data used in preceding studies in the economics literature. Second, this study measured forecasts of genuine saving (GS) and wealth globally up to the year 2100, while preceding studies were constrained to past and current savings and wealth. Third, this study examined changes in GS and wealth in different future scenarios on IPCC SRES (Special Report on Emissions Scenarios) with CO<Subscript>2</Subscript> emissions constraints. Finally, the authors adopted a GS estimation methodology of shadow prices in imperfect economies by Kenneth Arrow and Partha Dasgupta, instead of that of perfect economies by Kirk Hamilton et al., on which the authors had based previous studies. This makes the indicator consistent with changes of wealth. Copyright Springer Science+Business Media B.V. 2012