'Integrated solutions for multiple global problems through applying the Sustainomics transdisciplinary framework’ – by Professor Mohan Munasinghe. Multidisciplinary Research Week 2013 #MDRWeek

Multidisciplinary Research Week
(17-22nd March 2013)

‘Integrated solutions for multiple global problems through
applying the Sustainomics transdisciplinary framework’,

by Professor Mohan Munasinghe, Chairman, Munasinghe Institute for
Development (MIND), Colombo; Professor of Sustainable Development, University of
Manchester.

Integrated solutions for multiple global
problems by applying the Sustainomics
transdisciplinary framework
Professor Mohan Munasinghe
www.mohanmunasinghe.com
Chairman, Munasinghe Institute for Development (MIND), Colombo
Professor of Sustainable Development, SCI, Univ. of Manchester
Distinguished Guest Professor, Peking University, China
Visiting Professor, Vale Sustainable Dev. Inst., Fed. Univ. of Para, Belem, Brazil
Shared the 2007 Nobel Prize for Peace (Vice Chair, IPCC-AR4)

Keynote Speech delivered at
Multidisciplinary Research Week
University of Southampton, 18 March 2013
MIND Munasinghe Institute for Development Sustainable Consumption Institute
University of Manchester
SCI

Warm congratulations to the
organisers for putting together
this unique event on
MULTIDISCIPLINARY
RESEARCH. Complex global
problems of sustainable
development need integrated,
transdisciplinary approaches.
MIND Munasinghe Institute for Development

Cross-Disciplinary Terminology
Multi-disciplinary
specialist teams from different disciplines coordinate efforts
to apply various concepts and methods to complex problems
Inter-disciplinary
multi-disciplinary team seeks to break down the barriers
among various disciplines and achieve a synthesis, usually
at the results stage.
Trans-disciplinary(approach promoted in Sustainomics)
Inter-disciplinary team seeks to combine knowledge from
various disciplines to synthesize new concepts and methods
- before applying them to a complex problem.

WHAT ? are the challenges
Multiple global threats undermine sustainable
development efforts & need integrated solutions


Growing Risks of Global Breakdown
due to Multiple Heavy Shocks
• Financial-economic crisis: Asset bubble
• Persistent poverty and growing inequity
• Resource shortages: water, food, energy
• Environmental harm, extreme events, conflict
mass migrations, pandemics
• Climate change: the ultimate threat amplifier
Multiple threats are inter-related and synergistic.
Integrated & comprehensive solutions needed.
Stakeholder interests divergent. Responses are
uncoordinated & piecemeal – lack of political will

POVERTY: Poor living on < $1 per day


Unfair World Consumption Pattern 2000
Champagne Glass
83%
The richest fifth of the
World’s Population receives
83% of the Worlds Income

Ratio is 60:1
One fifth of the
Worlds Population between
highest and
lowest 20% !
The poorest fifth of the Worlds
Population receives 1.4% of total
World Income


Ecological Footprint of Human Consumption
In 2012 we need 1.5 earths; by 2035 almost 2 Earths
BAU
Unsustainable
Number of Earths

Sustainable
one
earth

2012 2030

Existing nuclear weapons can wipe out life on entire planet !

MIND

Climate Change – IPCC AR4 Main Findings
• Global warming in unequivocal. Total radiative forcing of the climate
now is unprecedented in several thousand years, due to rising
concentrations of GHG (CO2, CH4 & NO2).
• Humans activities since the 18th century are very likely to have caused net
warming of Earth’s climate, dominating over the last 50 years. More temp.
and sea level rise is inevitable, even with existing GHG concentrations.
• Long term unmitigated climate change would likely exceed the capacity
to adapt, of natural managed and human systems.
•Adaptation measures are available, but must be systematically developed
• Mitigation technologies are also available, but better policies and
measures (PAM) are needed to realize their potential.
• Poor countries & poor groups are most vulnerable to warming, sea
level rise, precipitation changes and extreme events. Most socio-
economic sectors, ecological systems and human health will suffer.
• Making development more sustainable (MDMS) is the most
effective solution - by integrating climate change policy into
sustainable development strategy.
MIND

Uncoordinated responses complicate matters
Example: 2007-2008 food scarcity - 1
Human actions
• Oil crisis  Corn for ethanol

MIND

Uncoordinated responses complicate matters
Example: 2007-2008 food scarcity - 2
Human actions
• Oil crisis  Corn for ethanol RESULT
Food
• Drought  Grain shortage Scarcity
Nature

MIND

WHAT ARE OUR VALUES
AND HOW WELL DO WE
ESTABLISH PRIORITIES ?
Dealing with the Triple Bubble
Crisis

MIND

Three Levels of Reality
Head in the clouds?

Financial Markets Econ. Growth
Productive Economic Assets
Bio-geo-physical Resources
Feet firmly on the ground?
Sound financial markets and economic growth
should be based on the true value of the
productive economic asset base. In turn the value
and use of economic assets should closely reflect
the state of natural (bio-geo-physical) resources
MIND

Financial Markets
Asset Bubbles 2008 crisis


Triple crisis bubbles driven by greed – enjoy now & pay later 2
A few get rich quickly, many innocents pay a heavy price afterwards

MIND

Asset Bubbles 2008 crisis Poverty-Inequity



MIND


Climate change
Externalities



MIND

Asset bubble >$100 trillion (1012), Global GDP >$60 trillion

Govt. Bailout >$5 trillion Aid/yr ~$100 billion
Human Values/Choices


Climate change
Externalities
Few billion $


World Military Expenditures: almost $2 trillion in 2012

MIND

Focus on
CLIMATE CHANGE:
Threat Multiplier

MIND

MAIN DRIVER
Changes in CO2 from ice core and modern data
(methane and nitrous oxide also cause global warming)
Now: near 400

Pre-ind: 275

-10,000 -5,000 TODAY (years)


RESULT: Mean temp, sea level and ice cover
Mean Temp. (0.75C in 100 yrs.) Sea Level (16 cm in 100yrs.)

25 yr.

50 yr.
150 yr. 100 yr.

Arctic Sea Ice Extent (min.)
Glacier
Mass
Balance


Observed regional changes in climate, and in
physical and biological systems
Examples include:
• non-polar glacier retreat
• reduction in Arctic sea ice extent and thickness in
summer
• earlier flowering and longer growing and breeding
season for plants and animals in N. Hemisphere
• poleward and upward (altitudinal) migration of
plants, birds, fish and insects; earlier spring
migration and later departure of birds in N. Hem.
• increased incidence of coral bleaching

IPCC-AR4: Predicting the Global Climate of 2100
GHG conc. 2-3 times pre-ind. level (280 ppmv)

Temp. rise ~3C (1.1 to 6.4) Sea level rise ~40cm (20 to 60)

Global Impacts of Climate Change
At 2C, Food & Water impacts are severe. Ecosystem
impacts, extreme events and catastrophic changes worsen

Source: IPCC AR-4

MIND

Large Scale, Long Term Risks: Tipping Elements

Lenton et al, 2008

Even 2ºC imposes risks of catastrophic, irreversible impacts
MIND

Global Level Two Way CC-SD Links 1
Sustainable Development
Climate Domain
Domain

Climate Change Stresses
Climate (temp., sea level, precip. etc.) Human and

System Natural Systems

Feedbacks
(V&A Areas)

Drivers
Different
Atmospheric Feedbacks Socio-economic
GHG Emission
Development
and
Concentration Paths
Scenarios Human Actions Causing GHG Emissions
(SD Goals &
Policies)


Global Level Two Way CC-SD Links 2
Climate Domain
Domain

Climate Change Stresses

Adaptation
(temp., sea level, precip. etc.) Human and
Climate
System Natural Systems
Adaptive
Capacity
Feedbacks
(V&A Areas)
Feedbacks
Feedbacks

Econ. Soc. Envir.

Feedbacks
Different
Atmospheric Feedbacks Mitigative Socio-economic
Capacity
GHG Emission
Development
and
Concentration Paths
Scenarios Human Actions Causing
GHG Emissions (SD Goals &
Policies)


MOST DESIRABLE:
CC Policies that Harmonise both
Adaptation and Mitigation (Win-Win)
while also Making Development More
Sustainable (MDMS)
Examples: growing forests, energy saving

Many trade-offs also arise and need to be
reconciled

Global Adaptation
Response Options


Global Impacts and Vulnerability
WE CAN PROTECT THE MOST VULNERABLE
• People: Poor, Children, Elderly.
• Regions: Small Islands, Arctic, Asian
megadeltas, Sub-saharan Africa.
• Sectors & Ecosystems: Coral reefs, sea-ice regions,
tundra, boreal forests, mountain and Mediterranean regions,
low-lying coasts, mangroves & salt marshes;
Water resources in mid-latitudes & dry tropics;
Low-latitude agriculture;
Human health where adaptive capacity is low.


Ecosystems Vulnerability
Loss of Critical Ecosystem Services

A temperature increase of 1.5°C - 2.5°C
over present, would put 20% - 30% of
higher plants and animals at high risk of
extinction


Adaptation Example: People flooded in coastal areas 2080
Constant protection = spending maintained at 1990 levels.


Adaptation Example: People flooded in coastal areas 2080
Constant protection = spending maintained at 1990 levels.
Evolving protection = spending increases at same rate as GDP.


Global Mitigation
Response Options


Global emissions must peak &
decline by 2015-2020 (latest)
Copenhagen Accord recognises danger limit of 2°C rise
and stabilisation level of ~450 ppmv by 2100 (currently 392
ppmv, safe level 280 ppmv).
CO2- GDP Reduction Global average
CO2 Year CO2 Global Mean
Equivalent reducti in 2050 sea level rise
stabili- needs to temp. incr. at
Stabili- on in relative to from thermal
zation peak equilib.
zation level 2030 2000 expansion
ppm ppm Year % Percent °C metres
350 – 400 445 – 490 2000–2015 <3 -85 to -50 2.0 – 2.4 0.4 – 1.4

400 – 440 490 – 535 2000–2020 <2 -60 to -30 2.4 – 2.8 0.5 – 1.7
440 – 485 535 – 590 2010 – 2030 0.6 -30 to +5 2.8 – 3.2 0.6 – 1.9
485 – 570 590 – 710 2020 – 2060 0.2 +10 to +60 3.2 – 4.0 0.6 – 2.4
570 – 660 710 – 855 2050 – 2080 +25 to +85 4.0 – 4.9 0.8 – 2.9
660 – 790 855 – 1130 2060 – 2090 +90 to +140 4.9 – 6.1 1.0 – 3.7


Failing the Challenge of Mitigation
UNFCCC 1992 – good start. Article 2 specifies stabilization
of atmospheric concentrations of GHG concentrations at a
level that does not harm the climate system (food security,
ecological systems and sustainable economic development).
Kyoto Protocol 1997 – modest target. By 2012 Annex I
nations to reduce emissions 5% relative to 1990. Compliance
weak. Came into force without USA (largest emitter).
Even after Kyoto 1997, emissions continue to increase
Post-Kyoto Agreement 2013? Bali (COP13) & Poznan
(COP14) made a start, but Parties repeatedly postponed the
issues until 2015-20 , at Copenhagen (COP15), Cancun
(COP16), Durban (COP17) and Qatar (COP18-Dec.2012) !
World is now facing 3-4 °C temp. rise by 2100.

Short-term (2010-2020) GHG emissions reduction
are possible with existing technologies and policies
at an affordable cost

• Energy: significant technical progress has been made in
the last 10 years and at a faster rate than expected (wind
power, solar, elimination of industrial by-products,
hybrid engine cars, fuel cell technology, carbon capture
and storage, etc.)
• Land Use: good potential for carbon sinks and reduced
GHG emissions from both better management of
existing land cover, and transformation of land use


All sectors and regions can contribute to mitigation

Note: estimates do not include non-technical options, such as lifestyle changes.


Key Policy Elements
• Policies for “carbon price”- can create incentives for producers
and consumers to significantly invest in low-GHG products,
technologies and processes. Higher carbon prices could impose
significant burdens on the poor, unless targetted relief policies are
implemented to ensure basic energy needs are met.
• Technology Policies - Deployment of low-GHG emission
technologies and RD&D would be required for achieving
stabilization targets and cost reduction
• International Agreements - achieving the UNFCCC/Kyoto
Protocol targets may stimulate a global response to the climate
problem, an array of national policies, the creation of an
international carbon market and new institutional mechanisms.
Future agreements will help reduce global costs of mitigation( eg:
emission trading, Joint Implementation and CDM) and improve
environmental effectiveness


Policies are available to governments to realise
mitigation of climate change
• Effectiveness of policies depends on national
circumstances, their design, interaction,
stringency and implementation
– Integrating climate policies in broader development policies
– Regulations and standards
– Taxes and charges
– Tradable permits
– Financial incentives
– Voluntary agreements
– Information instruments
– Research and development


Sustainability & Resource Use: Historical Lessons
DURABLE USE OF RESOURCES
• Nile Basin (Egypt)
Pharaonic system lasted over 4000 years, with sustainable resource
use and reasonable quality of life
• Yellow River Basin (China)
Imperial system was stable for many millenia, and supported
flourishing society
• Saraswati River (India)
Hosted a flourishing civilisation for 4000 years. River eventually
dried up due to tectonic activity, climate change and
desertification, and water piracy.
OVEREXPLOITATION OF RESOURCES
• Sahara Desert
Once green with many animals and hunters. Over-exploitation led
to a drier habitat which could no longer sustain these populations


Recent lesson of late 19th century holocausts -
relevance to Globalization & Climate Change
• 18th century – Brazil, China and India had quality of life comparable
with Europe.
• 19 century – Colonial rule trapped developing country small farmers
were into exporting cash crops at ever decreasing terms of trade.
Growing trade led to falling grain output and rising food insecurity.
• Late 19th century – Two El Nino draughts 1876-78 & 1898-1901 killed
tens of millions due to food vulnerability and famine. The developing
world is still unable to catch up after this setback.
• Future globalization and climate change could interact like colonial
trade expansion and El Nino, BUT on a worldwide scale – Potential for
future starvation and death on global scale due to vulnerability of the
poor, unless a new vision based on SD emerges.

Barbarization: One Risky Future Scenario
Unrestrained market forces increase risk of conflict (erosion of
ethical & moral values underpinning civilization)

Poverty, Inequity, Pandemics
Environmental degradation
Resource Shortage, Conflict
Social polarization, Terrorism
Climate Change

Chaos, Break-down Fortress World
Conflict, rivalry and Local, regional & global groups
competition for protect their interests within enclaves
resources overwhelm all How will we cope with such a world,
efforts to impose order especially the poor?


HOW ? can we move forward to transform risky current
trends into a safer and better future
Apply the SUSTAINOMICS framework to start
making development more sustainable (MDMS)


Asset crisis: have we learnt from experience?
Are we not returning to business as usual?
Financial
Sector

Jobless
Poor ~100
million

MIND

Global Economic Balance Shifting
Towards Emerging Economies
The global balance of economic momentum has
shifted. For the past decade, emerging and
developing economies have grown over 5% faster
than advanced economies.
US, Europe and Japan are still struggling to come
out of the financial crisis, and facing major issues
including low growth and high debts.
The SOUTH led by the BRICS emerging economies
(Brazil, Russia, India, China & S. Africa) are
forging ahead after only a minor initial downturn
in growth – both GNP and HDI have improved.
MIND

LOST OPPORTUNITY: Economic Stimulus
Packages were not used to also solve longer
term issues of Poverty, Resources & CC
1. Support productive long term investments (e.g.,
infrastructure, renewable energy, forestry,
agriculture) and social development (e.g., health,
education, sustainable livelihoods, safety nets),
NOT subsidies for rich banks, companies &
consumption expenses.
2. Boost poverty reduction and job creation efforts
(e.g., more access to assets for the poor, promote
exports of IT and manufactures).
3. Better governance, manage markets, reform prices
Fraction of stimulus funds spent on green investments:
Korea – 80%; China – 35%; Others mainly 10-15% or less
MIND

Better Use of the Momentum for Change
1. Build for long term. Make Development More
Sustainable -- with balanced consideration of
sustainable development triangle (economic,
social and environmental elements). Transcend
conventional boundaries using innovative,
holistic, integrative approaches.
2. Transform global governance structure. Reform
market regulation. Make UN system more effective
& responsive. Make IMF/World Bank more
inclusive. Give more weight to G20 (with advice
from B20, C20, etc.)

MIND

Post-2015 Process
• Mandates
– Defined at MDG Summit 2010 (High Level Panel)
– Rio+20 Conference 2012 (OWG)
• Leadership
– Member States: prerogative to deliver framework
– UN Secretary-General: to present vision to General
Assembly in September 2013 building upon UN
system’s work and consultation processes

MIND

Way Forward - A Long Term Vision of SD: 1
Levels Indicators Time Human Interventions
Poverty, Inequity, Exclusion, Now High risk from unrestrained,
Main
myopic market forces (“Washington
Issues Resource Conflicts, Harm to
consensus”, globalisation etc.) –
(surface) Environment (including CC) Reactive: piecemeal - mainly govt.

Business-as-usual poses unacceptable
risks for the future

MIND Munasinghe Institute for Development Source: Munasinghe

Main
Making development more
Consumption Patterns sustainable (MDMS) with
Immediate Transition
systematic policy reform to manage
Production/Technology
Drivers market forces (Sustainomics) –
Population Proactive: integrated, harmonious
(sub-surface)
Governance approach - govt., business, civil soc.

The SD transition requires multiple threats
to be addressed with CC and other policies
integrated within SD strategy

Main
Making development more
Consumption Patterns sustainable (MDMS) with
Immediate Transition
systematic policy reform to manage
Production/Technology
Drivers market forces (Sustainomics) –
Population Proactive: integrated, harmonious
(sub-surface)
Governance approach - govt., business, civil soc.
Fundamental global sustainable
Basic Needs dev. transition catalysed by grass
Long Term roots citizens movements, & driven
Underlying Social Power Structure
by social justice, ethics and equity,
Pressures innovative leadership, policies, info.
Values, Perceptions, Choices
(deep) flows, tech. (new SD paradigm) –
Knowledge Base Proactive: civil soc., business, govt.


HOW DO WE GET THERE ?
Addressing Complex, Multiple,
Interlinked Sustainable Development
issues within the Integrated
SUSTAINOMICS Framework


SUSTAINOMICS
Core concepts and elements
1. Making development more sustainable (MDMS)
EMPOWERMENT, ACTION & FORESIGHT


Making Development More Sustainable through
There are many definitions of sustainable development starting with
Bruntland (1987), and its precise meaning still remains elusive.
Parallel track strategy:
1. Short to medium term – make development more sustainable
(apply best practice).
2. Long term - aim for ideal goal of sustainable development
(identify next practice).
Making development more sustainable (MDMS) is a less ambitious
incremental strategy that is more practical to implement because
many unsustainable activities are easier to recognize and eliminate.
PRACTICAL TEST FOR PUBLIC POLICIES:
Does the policy make development more (or less) sustainable?

MIND

Peak – including climate
change (covered by clouds)

We cannot see the peak!!
Let’s stop to discuss &
Lets move forward NOW!! If analyze how to reach it.
we climb uphill, we will reach
the peak eventually

EMPOWERED to Make Development More ANALYSING SD and CC –
Sustainable (MDMS) – BEST PRACTICE NEXT PRACTICE
Many obviously unsustainable practices exist today.
MDMS encourages us to eliminate them NOW! Examples
include energy wastage and deforestation.

Making Development More Sustainable: Personal Lifestyle Changes


MDMS: SCP, Corporate Social Responsibility,
Sustainability Accounting & Reporting, Shared Value
• SCP provides major opportunities to improve resource efficiency.
• Corporate Social Responsibility (CSR) is a concept whereby
organizations consider the wider interests of society by taking
responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities and the
environment in all aspects of their operations.
• Sustainability Accounting & Reporting includes the generation,
analysis, use and reporting of economic, environmental and social
information (monetised wherever possible) to improve corporate
management and performance in those areas. This approach
recognizes that the social and environmental consequences of
corporate actions are as important as monetary profits, and seeks to
measure and report on those outcomes, via the Triple Bottom Line.
• Shared Value seeks to make profits while benefiting society &
environment by finding shared sources of value common to the
enterprise and to society.

MDMS: National Level CC-SD Integration
Make decision makers see sustainability and climate
change as key elements of national development strategy

(Social, Economic, Environmental)
Impacts

Sustainable Dev.
Adaptation

Development Mitigation

(natural variability)
Environment
- Sectors (Agriculture, Energy, Industry,
Transport, Health, etc.)

CC
- Systems (Environmental, ecological, etc.)

- Communities (Poor, Vulnerable, etc.)


MDMS: Global restructuring (not reduction)
of development and growth - 1

Ecosystem

Socioeconomic
Subsystem

Ecological
Services
The capacity of the ecosystem may become overloaded by the growing
socio-economic subsystem (broken lines).


MDMS: Global restructuring (not
downsizing) of development and growth - 2
(rounding the rectangle)

Ecosystem Ecosystem

Socioeconomic Socioeconomic
Subsystem Subsystem

Unsustainable Sustainable


SUSTAINOMICS
2. Harmonising the sustainable development triangle
BALANCE, INTEGRATION


•growth
•efficiency
•stability
Economic

Social Environmental
• empowerment/governance • resilience/biodiversity
• inclusion/consultation • natural resources
• institutions/values • pollution
Sustainable Development Triangle – harmonising key elements and
interconnections (corners, sides and centre) Source: Munasinghe [1992], Rio Earth Summit

•growth
•efficiency
•stability
Economic

Poverty
Equity
Sustainability
Climate Change
• inter-generational equity
Social • values/culture Environmental

•growth
•efficiency
•stability
Economic G
R
E
E
N
E
Poverty C
Equity O
N
Sustainability O
Climate Change M
• inter-generational equity
Y
Social • values/culture Environmental

Building Assets for Sustainable Development

Manufactured
Capital

Southampton
Social Capital Univ. Social
Natural
• Human Capital
Capital
• Cultural

Source: Munasinghe (1992), Rio Earth Summit


Key role played by Social Capital embedded in
Civil Society: ignored, undervalued, invisible

• At individual level: is built on personal networks
that help us enormously in our private and
professional lives.
• At community and national levels: is the invisible
glue that binds society together – involving values-
ethics, culture, behaviour, and social linkages.


Social Capital – Civil Society & Values
Examples of Civil Society Response: 2004 Tsunami - Sri
Lanka versus 2005 Hurricane Katrina - New Orleans, USA

Event Deaths GNP/capita

~35,000
2004 Tsunami ~ USD 1,000
(1 in every 570
– Sri Lanka people)

2005 ~1850 ~ USD 35,000
Hurricane (1 in every
Katrina - USA 200,000 people)

Recent examples: China earthquake, Japan Fukushima Nuclear Disaster

SUSTAINOMICS
3. Transcending boundaries
INNOVATION


Innovation can help us Transcend
Boundaries for Sustainable Development
• Values – replacing unsustainable values
• Disciplinary – complex issues need all disciplines
• Space – spans local to global scales
• Time – spans days to centuries
• Stakeholder – need to include all stakeholders
• Operational – full cycle from data to application


Innovation helps transcend mental barriers
Status-Quo
Vested Interests

Never, ever think
outside the box!

Innovators

Source: New Yorker

Transcending Unsustainable Values
Build essential ethical and moral values
especially among YOUTH
Greed, selfishness and violence are unsustainable

Selflessness, altruism, enlightened self-interest,
and respect for other humans and nature will make
development more sustainable

Ethical Dimensions of Climate Change 2006
Interfaith Declaration on Climate Change 2009
MIND Munasinghe Institute for Development Sustainable Consumption Institute
University of Manchester
SCI

Wrong Values Drive Unsustainable Development: 1

Unethical
Social Values Environmental
Greed, Selfishness, Debt
Social
Unsustainable
Corrupti on, Inequity,
Violence, Injustice, Capital
cons. & prod.
Elitism depleting NR

Source: Adapted from Munasinghe (1992), Rio Earth Summit
MIND
Munasinghe Institute for Development


Economic
Mal-development
growth based on
unsustainable debt,
waste & inequitable
consumption by
the elites

Unethical
Social Values Environmental
Social
Unsustainable
Corruption, Inequity,
Violence, Injustice, cons. Capital
& prod.

MIND


Economic
Mal-development
growth based on
unsustainable debt,
waste & inequitable
consumption by
the elites

Drivers of
Unsustainable
Unethical Environmental
Social Values Development Environmental
Debt
Unsustainable
Corrupti on, Inequity,
Social
Unsustainable
Pollution &
cons. & prod.
Depleting Natural
Resources

MIND


Economic
Mal-development
growth based on
unsustainable debt,
waste & inequitable
consumption by
the elites

Drivers of
Unsustainable
Unethical Environmental
Social Values Development Environmental
Debt
Greed, Selfishness, (with feedback) Debt
Unsustainable
Social
Unsustainable
Corrupti on, Inequity, Pollution &
cons. & prod.
Depleting Natural
Resources

MIND

Transcending disciplines to address SD issues

SD Issues Disciplines
Philosophy
• social justice, equity, values and culture Sociology
Anthropology
• institutions and governance Law
Politics
• markets and prices Economics
Finance
Management
• technologies and management
Engineering
Ecology
• biological and physical resource base Natural Sciences

Source: Munasinghe (2002), Int. J. of Sust. Dev.

MIND

Transcending Stakeholder Boundaries to Ensure
Cooperation for Sustainable Development

Business

Southampton
Civil Univ. Social
Govern-
Society Capital
ment

GCI can catalyse interactions among government, civil society and
business to strengthen local, national and global governance
Source: Munasinghe (1992), Rio Earth Summit


Transcending spatial and temporal scales
Panarchy of Systems Concepts: 1
Bigger & Longer Lived

Human
(sustainable) System
being

Source: Gunderson and Holling (2002)



Human
being

Innovation and Adaptation from below
(Faster Changes)

Sub-Systems Cells



Super-System Society

(Slower Changes)
Conservation and Continuity from above

Human
being

Innovation and Adaptation from below
(Faster Changes)

Sub-Systems Cells



Transcending Operational Barriers
Needs Better Stakeholder Cooperation
• Global Top Down Strategy
-Policy

Subsidiarity • Regional

Integration
• National
• Local
• Community
Specific
Projects Bottom up • Individual
Pragmatic balance between subsidiarity and
integration is essential: eg., CC or river-basin
MIND

SUSTAINOMICS
3. Transcending boundaries
INNOVATION
4. Full cycle application of integrative tools – from data
gathering to practical policy implementation
IMPLEMENTATION


Core Concept 4: Full cycle application of integrative
tools: from data gathering to practical policy
IMPLEMENTATION
There are many practical analytical
tools and policy options to integrate CC
responses into SD strategy (from global
to local levels)

There are many available case studies
and best practice examples involving
sustainomics applications


Full Cycle - Operations
ACTION ACTOR
Observations and Data Observers

Seamless Cycle
Concepts and Ideas Thinkers & Philosophers
Models & Analyses Scientists & Analysts
Interpretation of Results Translators & Communicators
Plans & Policies Decision Makers
Practical Applications Implementing Agents
Impacts (SD triangle) Assessment Experts
Each stage of activity has a tendency to
become compartmentalised
MIND Source: Munasinghe (200

Choosing Appropriate SD Indicators
- Social
- Environmental
- Economic
- Institutional
many indicators are available; thus correct
choice is critical for specific task at hand


Integrative analytical tools and practical applications
(linking across global, national and local levels)
Integrative Analytical Tools
Application
1. Restructuring Growth to Make Levels
Development More Sustainable (MDMS)
A. Global-
2. Optimisation and Durability

Linkages Across Levels
transnational
3. SD Analysis (Macro Level)
4. Action Impact Matrix (AIM) B. National-
5. Green Accounting (SEEA-SNA) macroeconomic
6. Integrated Models (IAM, CGE, etc.) C. Subnational-
7. SD Analysis (Micro Level) sectoral
8. Multi-Criteria Analysis (MCA), Cost-Benefit
D. Local-
Analysis (CBA) and Economic Valuation project
9. SD Indicators

M I I ND
MN D Munasinghe Institute for Development

Integrating across the three dimensions of SD
Main Types of Assets for Sustainable Development

Manufactured
Capital

Sustainable
Development
Social Capital Social
Natural
• Human Capital
Capital
• Cultural

Economic approach focuses on optimality - maximise growth
Environmental & social approaches use durability – overall system health


Integrating Diverse Definitions of Sustainability
Economic approach focuses on optimality - maximise growth
Environmental & social approaches use durability – overall system health

Economic: Maximum flow of income that could be sustained indefinitely,
without reducing stocks of productive assets. Economic efficiency ensures both
efficient resource allocation in production and efficient consumption that
maximises utility.
Ecological: Preserving the viability and normal functioning of natural
systems, including system health ability to adapt to shocks across a range of spatial
and temporal scales. Defined by a comprehensive, multiscale, hierarchical,
dynamic measure describing system resilience, vigour and organization.
Social: Maintaining the resilience of social systems and limiting their
vulnerability to sudden shocks. Involves building social capital to strengthen
cohesion, protecting cultural diversity and values, and improving inclusion and
participation - especially of disadvantaged groups.


Optimality and Durability: Simple Example
Two modes complementary - tradeoff depends on situation

Yield
Risk

Optimal Mode Max. yield
Olympic 100m sprinter – willing to
Highest risk
take high risk and make extreme effort Examples: Iskill
to minimise running time (single (Voldemart) 2B+
indicator) for one special event loss at JP Morgan.
Leeson - Bearings

Durable Mode
Middle aged walker – undertakes
regular, low risk exercise for overall
Mod. yield
health (multiple indicators), over many Lower risk
decades

MIND

HOW ? can we move forward to transform risky current
trends into a safer and better future
Apply the SUSTAINOMICS framework to start
making development more sustainable (MDMS)
WHICH? practical analytical tools and policies are available
Many best practice examples and case studies of
integrated solutions exist, worldwide.


Global Application of Sustainomics:
Climate Change Challenge
Making Development More
Sustainable via “Tunneling”:
Potential Post-Kyoto Framework for
Jointly Managing Climate Risk &
Right to Develop

Climate Justice – Equitable Allocation
of Per Capita Carbon Emissions

MIND

Adaptation Burden & Equity: CC SD
Adaptation is the first priority of developing countries that
are most vulnerable to climate change. Help is also crucial.
• Climate change is likely to impact disproportionately
upon the poorest countries and the poorest persons
within all countries, exacerbating inequities in health status
and access to adequate food, clean water and other resources.
• Net economic effects will be negative in most developing
countries
• Impacts will be worse - many areas are already flood and
drought prone, and economic sectors are climate sensitive
• Lower capacity to adapt because of a lack of financial,
institutional and technological capacity, and access to
knowledge


Mitigation GHG emissions and population 2004
Per capita Responsibility & Equity: SD CC
Mitigation leadership is the main responsibility of industrial
countries with high per capita GHG emissions

Annex 1 avg.

Non-Annex I avg.


MDMS via “Tunneling”: global cooperation to
manage Climate Risk & Right to Develop - Step 1
Rich
Today
(e.g. per capita GHG emissions)
Climate Risk

Middle Income

Poor

Development Level (e.g. per capita income)

Source: M. Munasinghe (1995) "Making Growth More Sustainable," Ecological Economics, 15:121-4.


Rich Transform -
Decarbonise
Climate Risk

Middle Income

Incentives/resources for developing countries
1. Adaptation fund (safety net) for poorest and
Poor most vulnerable.




Rich Transform -
Decarbonise
Climate Risk

Leapfrog
(CHINA,)
Middle Income

Incentives/resources for developing countries
1. Adaptation fund (safety net) for poorest and
Poor most vulnerable.
2. Technology cooperation/support to leapfrog




Country Level Actions
Integrating Climate Change
Policies into National Sustainable
Development Strategy


Integrating CC Policies into National SD Strategy
Make decision makers see sustainability & climate change
as key elements of the national development strategy

(Social, Economic, Environmental)
Impacts

Sustainable Dev.
Adaptation

Development Mitigation

(natural variability)
Environment
- Sectors (Agriculture, Energy, Industry,
Transport, Education, Health, etc.)

CC
- Systems (Environmental, ecological, etc.)

- Communities (Poor, Vulnerable, etc.)

MIND

Integration via SD Analysis at the
Macroeconomic/Sectoral Level
(general equilibrium analysis)

1. Macroeconomic/Sectoral Modeling
2. Environmental and Macroeconomic Analysis
3. Poverty/Income Distributional Analysis


Expanded Green National Income Accounts for SD

Environmental-
Economic Links Economic Links
Basic Satellite
Input-Output Environmental
Accounts
Table

Economic-Social Links Envir.-Social Links
Distribution of
Distribution of Income Environmental
Impacts
Source: Munasinghe (2001), Macroeconomics and Environment

Example
Analysing Water and Climate
Change Impacts on Agriculture
in Sri Lanka
Source: M. Munasinghe and S. Perera (2006)


Analysing SD-CC Links using the Action Impact
Matrix (AIM)
National SD strategy &
plans (NSSD, PRSP,
NEAP etc.)

Identify Links,
Screen, Prioritize
Issues, Select
Remedies
Action Impact
Matrix (AIM)
applied to SED
{ interacti ons of
national SD strateg y
with energy & CC
policies

Macro- and Sectoral
Models and Analyses

Implement Energy &
CC Policies & Proj.


Action Impact Matrix (AIM) Methodology
The AIM methodology may be used to better understand interactions
among three key elements, at the country-specific level:
(a) national development policies and goals;
(b) key SD issues and indicators; and
(c) climate change adaptation (and mitigation).
First, the two-way linkages between elements (a) and (b) are explored, in
the context of natural climate variability. Then, we impose the additional
impacts of element (c) on the interactions between elements (a) and (b).
The AIM approach analyses key economic-environmental-social
interactions to identify potential barriers to making development more
sustainable (MDMS) - including climate change. It also helps to determine
the priority macro policies and strategies in economic, environmental and
social spheres, that facilitate implementation of climate change adaptation
and mitigation to overcome the effects of climate change.
Thus, the AIM helps to integrate CC within SD. It has been used since the
early 1990s to link macroeconomic policies and environment.

AIM Process
The AIM methodology relies on a fully participative stakeholder
exercise to generate the AIM itself. Up to 50 experts are drawn from
government, academia, civil society and the private sector, who
represent various disciplines and sectors relevant to both sustainable
development and climate change. In the initial exercise, they usually
interact intensively over a period of about two days, to build a
preliminary AIM. This participative process is as important as the
product (i.e., the AIM), since important synergies and cooperative
team-building activities emerge. The collaboration helps participants
to better understand opposing viewpoints, resolves conflicts, and
ultimately facilitates implementation of agreed policy remedies. On
subsequent occasions, the updating or fine-tuning of the initial AIM
can be done within a few hours by the same group, since they are
already conversant with the methodology.

Adaptation Effects on Development (VED-AIM) in Sri Lanka – CC
Impacts and Effects of VA on Development Goals/Policies
Key Vulnerabilities, Impacts and Adaptation (VIA)
Notation (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
+ Beneficial
- Harmful
Wet-
3 High Bio- lands
2 Moderate div. & Indust
(flora coastl Water Poor ries &
1 Low Agric. Hydro Defore & ecosy resour comm Human Infra- Tour-
Output Power station fauna) stems ces unities health struct. ism

(S0) Status (Nat. Variability) -1 0 -2 -1 -1 -2 -1 0 2 2

(S1) Status (+CC Impacts =>) -2 -1 -2 -2 -2 -3 -2 -1 -1 -1

Dev. Goals/Policies (+CC
Impacts)
(A) Growth -1 -1 -1 -1 -1 -2 -2 -1 -1 -1

(B) Poverty alleviation -2 0 -1 -1 -1 -2 -2 -2 -1 -1

(C) Food Security -3 0 -1 -1 -1 -3 -1 -1 0 0

(D) Employment -1 0 -1 0 -1 -2 -1 -2 -1 -2

(E) Trade & Globalisation -2 -1 0 0 0 -1 -1 0 -2 -1

(F) Budget Deficit Reduction -1 -1 0 0 0 0 0 -2 0 -1

(G) Privatisation 0 1 1 0 0 1 0 0 -1 -1


Downscaled GCM Results: Range of Climate
Change Predictions for Sri Lanka in 2050
Global
Period Rainfall Temperature
Scenario
Max. temperature: increase by 0.80 C
Increase by 50 mm over the
B1 NEM
baseline Min. temperature : increase by 1.00 C
Increase by 350 mm over
the baseline, especially over
B1 SWM
the Western slopes of the Min. temperature : increase by 0.80 C
central hills
Increase by 70 mm over the
baseline, especially over the
A1F1 NEM
Eastern slopes of the central Min. temperature : increase by 1.40 C
hills
Increase by 520 mm over
the baseline, especially over
A1F1 SWM
the Western slopes of the Min. temperature : increase by 1.20 C
central hills


Multi-sector Computable General Equilibrium Model
linked to sectoral and project level models

MACROECONOMY (Multisectoral CGE)

TRANSPORT AGRIC-ULTURE & URBAN-IND ENERGY
LAND USE

ROAD RAIL TREE CROPS RICE REGION REGION
I III

OTHER FORESTRY REGION
II


Impact on Sri Lanka national economy in 2050*
- GDP effect small BUT equity effect larger
Crop Change of Total Change Agriculture
GDP in 2050 (%) GDP in 2050 (%)
Rice -0.36 -2.46
(dry zone – poorer)
Plantation Crops +0.10 +0.70
(wet zone – richer)
Rice + Plantation -0.26 - 1.76
Crops

*Note: Assuming the same economic structure in 2050


Sri Lanka CC Impacts: Spatial Distribution


Some Key Policy Implications

1. Moderate overall impact on agricultural output and
national economy, but some effects will emerge
within next two decades
2. Significant potential risk to food security (rice)
3. High poverty impact on small farmers
4. Equity impact (small rice farms versus large tree
crop plantations)
5. Demographic impact (potential migration from dry
to wet zone)

Similar Procedure can be used
to Integrate Mitigation into SD
Strategy using the AIM


Subnational-Sectoral
and Local-Project
Level Analysis


Sustainable Development Assessment Tools
(partial equilibrium analysis at sector/project level )
1. Economic/Financial Assessment (CBA)
2. Environmental Assessment (EA)
3. Social Assessment (SA)
4. Multi-Criteria Analysis (MCA)
5. Poverty Assessment (PA)
6. Technical Assessment (TA)
Choice of appropriate SD indicators is vital
for SD Assessment

Cost-Benefit Analysis (CBA) and
Multicriteria Analysis (MCA)
Economic valuation of environmental
(and social) impacts and assets is an
important (and often neglected) aspect of
cost-benefit analysis (CBA)
When valuation is not possible, other
techniques like multi-criteria analysis
(MCA) can be useful for decision making

MIND

Inserting Environmental (& Social) Concerns
Into Conventional Economic Decisionmaking 1
Environmental Decisionmaking
Systems Analytical Tools and Methods Structure
Global Inter-
Transnational National

Natural
Habitats
National
Macroecon.
Land

Sectoral
Water Regional

Air Subsectoral
Project

MIND

Environmental Decisionmaking
Systems Analytical Tools and Methods Structure
Global Inter-

CONVENTIONAL ECONOMIC ANALYSIS
Transnational National

Analysis
Econ.
Int.
Physical, Biological and Social Impacts
ENVIRONMENTAL ASSESSMENT
Natural

Macroecon.
Habitats

National

Anal.
National

and FINANCIAL ANALYSIS
Macroecon.

TECHNO-ENGINEERING
Land

Anal. national Anal.
Sectoral
& Sub-
Sectoral
Water Regional

Cost -Ben.
Proj. Eval.
Urban, Indust. Subsectoral
and Air Project

MIND

Land

Water
Natural
Habitats
Global

and Air
Systems

Transnational

Urban, Indust.

MIND
Environmental

ENVIRONMENTAL ASSESSMENT

Physical, Biological and Social Impacts

SUSTAINOMICS
ENVIRONMENT-ECONOMY INTERFACE
Integrated Macro. Econ. Global
Impact
Resource Anal. & Env. Env. Econ.
Valuation
Mgmt. Account. Analysis

CONVENTIONAL ECONOMIC ANALYSIS

Proj. Eval. Sectoral National Int.
Cost -Ben. & Sub- Macroecon. Econ.
Analytical Tools and Methods

Anal. national Anal. Anal. Analysis

TECHNO-ENGINEERING
and FINANCIAL ANALYSIS
Inter-

Project
Sectoral
Regional
National

Subsectoral
National
Structure

Macroecon.

Decisionmaking

Social concerns may be incorporated
into conventional decisionmaking using
a similar approach, but with more
difficulty!

MIND

Categories of Economic Value of Environmental Assets
(examples from a tropical rain forest)
Total Economic Value

Use Value Non-use Value

Direct use values Indirect use values Option values Existence values Other non-use values

Outputs that Value from
Functional Future direct and
can be knowledge of
benefits indirect use values
consumed continued
directly existence

-Food -Ecological -Biodiversity
-Biomass functions -Habitats
-Conserved
-Recreation -Flood control Endangered
habitats
-Health -Storm protection species

Decreasing tangibility of value to individuals

MIND

Sustainomics Application –
Forest Sector
SD Assessment of a Tropical
Rainforest in Madagascar
Focus on economic valuation of costs and
benefits of establishing a new national park

Source: Munasinghe (2007)

MIND

Background and Objectives
Madagascar is economically poor, but ecologically rich (e.g., lemurs). It has
been designated a mega-diversity area, whose ecosystems are also at great
risk. The government is seeking to control forest degradation and protect
biodiversity. This study was the first stage analysis to facilitate a decision
on creating a new national park.
The proposed national park would generate both indirect and
direct costs and benefits. Costs arise from acquisition of private land,
hiring of park personnel, and development of roads, visitors' facilities, and
other infrastructure. Other important costs (often ignored) are the
opportunity costs from foregone uses of park land. Use-value benefits
from tourism can generate considerable national revenues from both
entrance fees and travel expenditures. Non-use benefits include existence
and option values. Indirect benefits may include reduced deforestation,
watershed protection and climate regulation. This study seeks to measure
important but difficult to measure economic impacts, i.e., costs to local
villagers and benefits to foreign tourists.
MIND

SD Goals

Economic - maximise net benefits
Social - balance (competing) interest of stakeholders
(especially the poor): Villagers on-site, Tourists (foreign and
local), People of Madagascar (Government)

Environmental – safeguard and maintain nationa park
and ecosystems

MIND

Valuation Techniques Used in Study

• Opportunity Cost Analysis
• Travel Cost Analysis
• Contingent Valuation Analysis

Evaluate Support Benefits of Forests
(from MA):
Provisioning, Regulation, Cultural

MIND

Value of Local Household Activities
Activity No. of Total annual Mean annual
Observ- value for all value per
ations villages (US$) household (US$)
Rice 351 $44,928 $128
Fuelwood 316 $13,289 $38
Crayfish 19 $220 $12
Crab 110 $402 $3.7
Tenreck 21 $125 $6
Frog 11 $71 $6.5

MIND

Economic Costs and Benefits of Establishing
New National Park (using different methods)
Annual mean value Aggregate NPV

Welfare losses to local villages (US$)
Method Used per household
Opportunity Cost 91 566,070

CVM 108 673,078

Welfare gains to foreign tourists (US$)
Method Used per trip
Travel Cost 1 (random utility) 24 936,000

Travel Cost 2 (typical trip) 45 1,750,000

CVM (use & non-use value) 65 2,530,000

MIND

Madagascar Study - Key Conclusions
Policy Implications: Can help in investment decisions, resource
mobilization, project design and management, including how to
(a) allocate scarce capital resources among competing land use activities;
(b) choose and implement investments for natural resource conservation
and development;
(c) determine pricing, land use, and incentive policies;
(d) set compensation for local villagers for foregone access to forest areas;
(e) show value of park as a global environmental asset to foreigners (e.g.,
obtain external funds for conservation)
Issues: WTP is fundamental to the economic approach, but over-
emphasizes value ascribed to richer foreign visitors. If conflicting
claims to park access were determined purely on this basis, poor local
villagers are more likely to be excluded. However, social aspects of
sustainable development (like equity and distributional concerns) will
help to protect the basic rights of local residents – e.g., "safe minimum"
degree of access to park facilities, “buffer zone”, etc.
MIND

Sustainomics application: project level

Multicriteria SD Assessment of small hydro
schemes using economic, social and
ecological indicators
Primary Source: Morimoto R., and Munasinghe M. (2005) “Small hydropower
projects and sustainable energy development in Sri Lanka”, Int. Journal of
Global Environmental Issues, Vol.4.
Summary: Munasinghe, M. (2002) “The sustainomics trans-disciplinary meta-
framework for making development more sustainable: applications to energy
issues”, Int. J. of Sustainable Dev.,Vol.4, No.2, pp.6-54.


Overview of study
• Energy affects all three dimensions of sustainable development.
• Reviews linkages between potential impacts of energy
production and consumption on sustainable development,.
• Multi-criteria analysis used to assess the role of small
hydroelectric power projects in sustainable energy
development.
• 3 key variables (measured per unit of GHG avoided per year):
Economic - electricity supply costs,
Social - numbers of people displaced (resettled),
Environmental - biodiversity loss
• Analysis helps policy-makers compare and rank project
alternatives more easily and effectively.
• The multi-criteria analysis, which includes environmental and
social variables, supplements and balances cost benefit analysis
which is based on economic values alone.

Project Level:
Economic, social and ecological indicators for small hydro in Sri Lanka
Average generation costs (AVC), biodiversity index (BDI), and number of
resettled people (RE) by hydroelectric project. All indices are per tonne CO2
avoided per year. Numbers of people resettled and the biodiversity index are
scaled for convenience (by multipliers 10-5 and 10-9 respectively). The values at the
top of the graph indicate the annual energy generation in gigawatt hours (GWh).
28 11 159 210 209 20 149 114 390 512 22 78 161 34 50 83 42 18 123 79 113 143

20

18

16

14

12

AVC (US cents/kWhyr)
10 BDI/kWhyr
RE/kWhyr
8

6

4

2

0
KO 071

AG 9
IN 8
03

SU 09

7
AH 6

08
KE 75
KA 09

LO 022

04
AH 3

AH 07
KU 33

M 011

SU 14
2

3

EE 4

AH 5

AL 7
0

2

9
04

01
05

05

07

23

28
A0

0

A0

A0

A0
0
A0

0

0

AO
0

0
LA
LU
N

KU

U

U

U
TM

O
G
G

G

G

TA
W

W
AG
IY
R

D

D
G
IN

IN

M
SI
AG

D

U
G

G

G

N
M
H

M

M

M

M

project


'Integrated solutions for multiple global problems through applying the Sustainomics transdisciplinary framework’ – by Professor Mohan Munasinghe. Multidisciplinary Research Week 2013 #MDRWeek

'Integrated solutions for multiple global problems through applying the Sustainomics transdisciplinary framework’ – by Professor Mohan Munasinghe. Multidisciplinary Research Week 2013 #MDRWeek

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