Andreu Ulied – MCRIT SL Brussels – 16/12/15 FLAGSHIP Final event Meta-models at the service of the FLAGSHIP Storylines FLAGSHIP is Funded by the 7 th Framework Programme of the European Union Thinking ahead sustainably: Policies, Scenarios and Models to address Grand Societal Challenges

o Light models intended to support strategic discussions o Built on Ms Excel, 100% open, can be modified & upgraded by users o They run fast: changing parameters and obtaining new results in seconds o They are well suited for: o pre-assessments before using more detailed resource-intensive models o identifying promising ideas to be further investigated o learning and better understanding rationales of complex phenomena o they can be used as pedagogic and communication tools The meta-modelling approach

W = A · C · E o W – Wellbeing Module, inspired by the I=P·A·T approach in environmental science developed by Ehrlich, Commoner & Holdren (1960s) o A - Affluence Module, based on Luca Ricolfi “L’Enigma della Crescita” essay (2014) – Growth Module o C - Cohesion Module, based on Thomas Piketty “Capital in the 21st century” essay (2014) – Distribution of Growth and Inequalities o E - Environmental Module, based on Jorgen Randers“2052. A Global Forecast for the next forty years” essay (2012), based on cross elasticities to economy and technology Meta-modelling in FLAGSHIP

Wellbeing Wellbeing Indicators: - Affluence: GDP per capita (source: 2013 World Bank) - Inequalities: (TOP 10% wealth share) / (MIDDLE 10%-50% income) (source: 2013 Credit Suisse & World Bank) -Environment : CO2 per unit of GDP (carbon intensity · energy intensity) (source: 2013 British Petroleum)

Luca Ricolfi “L’enigma della Crescita” Affluence

o Solow formulation, particularised for OECD countries o Productivity defined based on key policy related variables 1) Level of Instruction of population 2) Attraction of foreign investments 3) Transparency and efficiency of public institutions 4) Taxation load to businesses o Parameters determined based on regression analyses of real data for OECD countries between 1995 – 2007 Affluence: Ricolfi formulation of Economic Growth Affluence

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Thomas Piketty “Capital in the 21st century” Other references: “Symposium on Inequalities”, Journal of Economic Perspectives Vol 29 N1 (Winter 2015) “Thomas Piketty's exhaustive inequity data turn out to be flawed“, FT May 23 rd 2014 “ r>g & savings rate. Assessing Piketty's laws of capitalism with some simple simulations” by T. van Treeck Cohesion

Wealth and Income disparities Cohesion Returns obtained from property ownership (rents) become more important than the rate of growth of salaries When the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term r > g the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability. Piketty proposes a global system of progressive wealth taxes of up to 2% to help reduce inequality and avoid the vast majority of wealth coming under the control of a tiny minority.

Environment Jørgen Randers “2052. A Global Forecast for the next 40 Years”

Data series of cross elasticities of GDP, Energy Consumption and CO2 emissions Environment Behaviour, Social Organisation… Tecnology, Resource efficiency… Environmental Module

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o A  Affluence FLAGSHIP Economic Module o C  Cohesion, FLAGSHIP Cohesion Module o E  Environment FLAGSHIP Environmental Module Wellbeing ACE W 4 meta-models integrated in FLAGSHIP  W = A · C · E

Average yearly GDP growth in Europe Affluence

GDP Growth per European macro-regions, compared to CEPII, EC Ageing Report, OECD

Affluence Convergence of GDP per capita of European macro-regions

PERSEVERANCE: 17 EU countries i ncrease inequities by 2050, up to 9% (Inequities are defined as the ratio % of Wealth by Top Classes to % of Income by Middle Class) Cohesion In MARCH 2015, 16 countries increased inequities

Cohesion METAMORPHOSIS: only 2 countries still increase inequities by 2050, up to 4% (Inequities are defined as the ratio % of Wealth by Top Classes to % of Income by Middle Class)

PERSEVERANCE: Global Emissions increase 100% from 1990 to 2050 Environment

Wellbeing

METAMORPHOSIS: Global Emissions increase 40% from 1990 to 2050 Environment

Thank you for your attention! Andreu Ulied FLAGSHIP is Funded by the 7 th Framework Programme of the European Union