Sustainable economic structures

The paper introduces four scenarios for sustainable economic structures in the Netherlands for 2030. The aim of this paper is to provide possible answers to what a sustainable future might look like in terms of alternative economic structures. To this end, an empirical economy-ecology model is developed and calibrated to four different scenarios indicating different development paths and different perspectives on sustainability. In the first scenario, called Strong Together, environmental goals are very ambitious world-wide. In the second scenario, Strong Alone, environmental policy abroad is less ambitious. The third scenario, Negotiated Sustainability, broadly reflects a balancing of different goals. In the fourth and last scenario, Weak Sustainability, only low cost environmental measures are taken and environmental objectives are relatively loose. The applied economic model with environmental modules optimises economic growth subject to different environmental objectives that are in line with the different scenarios and perspectives on sustainability. It appears that both strong (environmental) technological progress and substantial structural changes are necessary for economic growth and environmental quality to be compatible. However, some trade-off between them remains. Some sectors lose market share in all scenarios, including most energy-intensive and agricultural sectors. On the other hand, 'winners' are dependent on the level of the critical environmental objective(s) and hence differ between the scenarios. Explicit attention is paid to the so-called 'ecological trade balance', which measures the (environmental) balance between the domestic production structure and the domestic consumption structure. Embarking on sustainable economic structures implies that the Netherlands 'shifts' environmental pressure abroad.