1. Sustainable Development: Thinking Outside the Box Dr. John Shilling Chairman Board of Trustees Millennium Institute May 16, 2012 You cannot solve the problem with the same thinking that created the problem Albert Einstein

2. 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

3. 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

4. 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

5. 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

6. The Risk of Staying in the Box Ignoring effects beyond ones sector of interest Predictions by sector specialists more often wrong than expected Hard to reach agreement with other special interests Dont 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

7. How MI Got Out of the Box Global 2000 Report in 1980 by US Gov. International interest, but not national MIs founder, Jerry Barney, sought more integrated modeling tools to have a more consistent approach Discovered System Dynamics and created the Threshold 21 model

8. 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

9. 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

10. Why Take a Systemic View?

11. We Need to be Careful

12. To Avoid Unexpected Results!

13. Factors to Take into Account Economic and social factors –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

14. 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

15. 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

16. 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

17. The Basic T21 Structure

18. The Key Connections in T21

19. 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 countrys 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 Banks goals

20. Critical Issues T21 Addresses 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

21. Examples of T21 Work 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,

22. MI Around the World T 21 Countries MI Partner MI Head Office M 3 Countries MEG Countries

23. Demonstrate Running T21

24. 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

25. Thank You for Your Attention Questions and comments are welcome www.millennium-institute.org Jed.shilling@verizon.net

26. MIs integrated dynamic models have been vital for GMs sales forecasts Paul Ballew, GM MIs long-term, integrated perspective is essential Pablo Guerrero, World Bank MIs T21 analytical tool is essential for effective national development strategies Ed Cain, Carter Center Fascinating! David Cohen, Counterparts International 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 I want that T 21 planning team in my office… Président Amadou T Touré, Mali 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 What Partners and Clients Are Saying