Global simulation model for policy coherence modelling with SDG coverage

#SDGAction42739

Description

Intro

To achieve a more holistic and coherent approach to policy implementation, the representation of the SDG indicators/metrics within an ex-ante global market simulation model provides a unique insight into the synergies or trade-offs in scenarios where several policy instruments and other drivers are operating simultaneously. 
The Modular Applied GeNeral Equilibrium Tool (MAGNET) is providing high-level policy advice to clients including the European Commission, the OECD and FAO. The extension to SDG indicators allows addressing a broad array of questions related to economic, social and environmental sustainability in a global context.

Objective of the practice

The acceptance of the global Sustainable Development Goals (SDGs) by 193 countries of the United Nations in September 2015, brings sustainable development to the forefront of policy planning. Current progress towards the targets of the 17 SDGs is gauged using a series of integrated and universally applicable indicators (UN, 2015). 
 
As a means to achieving a more holistic and coherent approach to policy implementation, the representation of these SDG metrics within an ex-ante global market simulation model provides a unique insight into the synergies or trade-offs in scenarios where several market instruments are operating simultaneously. 
 
The Modular Applied GeNeral Equilibrium Tool (MAGNET) is a global economic market simulation model. Supported by a dedicated team of experienced modellers, the MAGNET model has provided high-level policy advice to clients including the European Commission, the OECD and FAO. MAGNET has been used to examine (inter alia) the impact of global change on food and nutrition security, the implications of a shift towards a more bio-based economy, environmental, trade and agricultural policy reform scenarios. The model includes up to 141 regions and 97 commodities, including 14 primary agricultural commodities. A key strength of the MAGNET philosophy is its modular approach to modelling. Employing a user friendly windows based platform, this flexible tool is equipped with a broad range of non-standard modelling extensions that can be specifically tailored to the research question at hand. 
 
The MAGNET SDG Insights Module (MAGNET SIM) embeds 60 official and supporting indicators, touching upon 13 of the 17 SDGs for each region of the world. A further advantage is that complex modelling results are made accessible through their translation into a series of SDG metrics that capture the spirit of the SDG indicators, which is increasingly part of the common language of global impact assessment. The results can be produced for key time intervals (e.g. 5 year steps) up to 2050 and show how specific market drivers (i.e., technology change, public policy changes, education) can bring us closer to the Sustainable Development Goals. Improvements to the module are ongoing, through the reconciliation of physical units satellite databases (i.e., employment, energy usage, water usage, air pollution) with the core MAGNET model mechanisms, whilst further developments to enumerate non-market SDG targets in areas relating to health (SDG3), education (SDG4), as well as income inequalities (SDG10) are underway. It is envisaged that further modelling work will enable the user to set SDG targets, for which the model will provide a descriptive account of the necessary market allocation of resources to achieve.

Partners

This research activity aims at supporting EC policy analysis and beyond. It is co-developed by Wageningen Economic Research (WeCR) and the European Commission - Joint Research Centre, Seville (JRC.D.4). It is funded in part by the European Commission.
In its review of scenario modelling tools, Allen et al. (2016) evaluated 80 models addressing SDG thematic issues. Out of the eight models meeting the two screening criteria of ‘policy relevant’ and ‘integrated’, MAGNET was identified addressing the three dimensions of sustainable development.
Since then many advances have been made. See result section.

Implementation of the Project/Activity

The project (inclusion of the SDG indicator framework in the existing simulation tool MAGNET) has been contemplated already in 2017 after the publication of the Commission Communication "Next steps for a sustainable European future" (Nov 2016) and focussed on the bioeconomy after the release of the Bioeconomy strategy review in Nov 2017. The initial focus on the bioeconomy can be explained with the holistic nature of the bioeconomy strategy, involving all three dimensions of sustainability.
The activity is carried out in a research context within the limited resources available in the small workpackage on the economic aspects of the bioeconomy (partly financed through an administrative arrangement with the Directorate General RTD).
It builds on the existing indicator framework of the MAGNET model and extends it to the SDGs. The progress made is reviewed within limited European Commission circles and the research community. For the moment, it is work in progress.

Results/Outputs/Impacts

The MAGNET model has been widely used for research and policy analysis in the food-energy-climate-water-health nexus (see further below for published articles).
The MAGNET model has recently been referenced in the impact assessment of the legal proposal related to the "Modernising and simplifying (of) the Common Agricultural Policy".
In the field of sustainability in the academic literature, MAGNET has featured prominently as an impact assessment tool within a broad variety of areas including: land-use change (e.g., Schmitz et al., 2014); EU domestic support (e.g., Boulanger and Philippidis, 2015); Biofuels (e.g., Smeets et al., 2014, Philippidis et al., 2018); Food Security (Rutten et al., 2013), Climate change (van Meijl et al., 2018) the EU bioeconomy (Philippidis et al., 2018).
The latest developments of the MAGNET SIM module are quoted in the COM(2018)673 and SWD(2018)431 "A sustainable Bioeconomy for Europe: strengthening the connection between economy, society and the environment" as approach model framework for assessing policy coherence and SDGs. Moreover, MAGNET SIM has recently been published in a high impact peer reviewed journal (Philippidis et al., 2020).

Enabling factors and constraints

It is an overstatement to claim that the approach adopted here is a one-size-fits-all solution to the measurement of the SDGs. However, to the best of our knowledge, it is the only systems wide simulation model with such a broad coverage of SDG indicators linked to global markets and policies. Enabling factors have been good ideas (connecting a simulation model with the SDGs) and the capacity to implement them. At the current time, human and financial resources are limited and have therefore not yet resulted in a complete and consolidated extension of the SDG module to cover all of the SDG targets.

Sustainability and replicability

As stated, the module is growing in scope, whilst its longevity and maintenance will continue to rely on access to timely and relevant respected satellite secondary data sources, expert modelling input and peer review assessments. Despite these challenges, there is optimism that with sustained moderate investments into this quantitative simulation modelling approach, the potential reward in terms of the insights this methodology offers within this high profile field of study, is considerable.

Conclusions

The main novelty of the MAGNET tool with the SDG insights module is the capacity to simulate in a holistic, coherent and comprehensive manner, the relationship between anticipated global market macroeconomic developments, expected and hypothesised public policy instruments and their associated drivers, and the repercussions on the SDG. With the current focus on developing policy coherence within the European Commission’s Green Deal, a key advantage of the MAGNET approach, with its internalisation of all economic activity flows world- wide, is that it is keenly tailored to understanding the synergies and trade-offs associated with multiple market instruments.

Other sources of information

Main publications related to SDG analysis with MAGNET:
JRC report (2018) "The MAGNET model framework for assessing policy coherence and SDGs". https://ec.europa.eu/jrc/en/publication/magnet-model-framework-assessin…
JRC report (2019) “Alternative Global Transition Pathways to 2050: Prospects for the Bioeconomy - An application of the MAGNET model with SDG insights”. https://publications.jrc.ec.europa.eu/repository/bitstream/JRC118064/jr…
Article in Journal of Cleaner Production (2020) “Snakes and ladders: World development pathways’ synergies and trade-offs through the lens of the Sustainable Development Goals” https://doi.org/10.1016/j.jclepro.2020.122147

In the field of sustainability in the academic literature, MAGNET has featured prominently as an impact assessment tool within a broad variety of areas including:
Land-use change (e.g., Schmitz et al., 2014) https://onlinelibrary.wiley.com/doi/abs/10.1111/agec.12090
EU domestic support (e.g., Boulanger and Philippidis, 2015) https://www.sciencedirect.com/science/article/pii/S0306919215000056
Biofuels (e.g. Philippidis et al., 2018) https://www.mdpi.com/1996-1073/11/10/2703
Food Security (Rutten et al., 2013) https://www.sciencedirect.com/science/article/pii/S0306919212000991
Climate change (van Meijl et al., 2018) http://iopscience.iop.org/article/10.1088/1748-9326/aabdc4
EU bioeconomy (Philippidis et al., 2018) https://www.sciencedirect.com/science/article/pii/S0921800916308941

The MAGNET model has been used for many different policy relevant studies in the food-energy-climate-water-health nexus. Latest scientific publications involving the JRC are in Nature Climate Change (2018a, 2018b), Energies (2018), Ecological Economics (2018), Environmental Research Letters (2018), Economic Systems Research (2019 ) and the Journal of Cleaner Production (2020).

SDGS & Targets

Goal 15

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss