Environmental Economy

Concluding Remarks

P.Capros(1) and P.Vallette (2)

(1)School of Electrical and Computing Engineering
Division of Electrical Power
National Technical University of Athens

(2)European Commission, Directorate-General for Research
Brussels
Belgium

Environmental Economy Session

This session dealt with research in the field of socio-economic assessment of policies aiming at delivering sustainable development. For the past two decades the European Commission has been very active in this field, obtaining concrete results, with sophisticated policy assessment tools developed under the auspices of DG Research being used effectively in real-world policy-making. In the field of environmental economy assessment, Europe is well advanced in comparison with the US and Japan.

Addressing issues of sustainable development is a multi-disciplinary task necessitating science, technology and economics in order to put in place an efficient policy framework. Similarly, interdisciplinary approaches and communication among researchers need to be reinforced.

Integrated assessment of sustainable development strategy and policy is complex, demanding a sophisticated approach. The presentations summarised the most important developments in Europe in this domain, as follows:

• Integrated assessment makes use of information and data, particularly for the evaluation of external costs of environmental damages, and thus indicators are needed to measure and monitor progress in terms of efficiency, cost-benefit and equity.
• Integrated assessment economic results become increasingly accurate when innovation, R&D policy and technology progress are an integral part of the analysis, as the progress of technology can be accelerated when R&D policy and financial resources concentrate on addressing the sustainable development objectives. Such an analysis, with integral technological learning, can convey the right message to policy-makers about the true cost of environmental compliance.
• Integrated assessment also puts together numerical models of different types, so as to combine knowledge from science and engineering with sound economic simulation of the markets, in order to provide a platform for interdisciplinary communication and rationality.
• Integrated assessment in addition addresses uncertainty factors in an explicit manner, in order to provide decision-aid tools that can suggest hedging strategies to policy makers, given that hedging is mostly required in such heavily uncertain decision-making areas in R&D policy.
• Integrated assessment methodologies are also used for specific and probably more concrete issues, such as water management in a local area, and the negotiation-aid for the setting and implementation of international agreements, as demonstrated by two of the presentations.

The methodology and the tools are also very useful for addressing assessment issues for the Black Sea and Mediterranean area, in particular market functioning and integration issues in relation with environment and sustainable development.

One general conclusion concerns the need for a further improvement in the dissemination of results in the field of integrated sustainability impact assessment and the establishment of efficient communication between the different disciplines. Communication to stakeholders and users should also be made simpler and easier to understand.