Economic-environmental scenario simulations to measure sustainable development in Taiwan

The issue regarding the interrelationships between economic development and environmental pollution has been of major concern in many countries. Many economic/mathematical models have been developed to describe or predict these complex phenomena. In this research, an aggregated model of a large scale region of a nation was developed for exploring the environmental burden/pollution attributable to economic development and changes in the industrial structure. A system-dynamics based software Vensim® was employed to serve as the modeling tool. In the economic division, sectoral GDP's were computed using the Cobb-Douglas production functions in which the technique coefficient and labor share for each economic sector were calibrated in advance based on historical data. Three major employment categories, industrial, service, and agricultural, were defined. Among these, there are 12 industrial, 4 service, and 2 agricultural sectors. In the environmental division, key variables regarding river, air, and waste pollution were incorporated in the simulation model. For river pollution, BOD₅ was selected as the target pollutant and the receiving water bodies were 29 main rivers in Taiwan. For air pollution, TSP, SO_x, NO_x, and VOCs were the target pollutants and they were generated from both stationary and mobile sources. As for waste pollution, hazardous and nonhazardous wastes from various sources were key pollutants. In each of these environmental submodels, the generation, treatment, emission, accompanying costs, and other important variables were simulated according to many scenarios designed by taking into account essential policy variables or parameters in practice. Through these scenario simulations, policy variables sensitive to the concerned system performances can be identified. Thus, the approaches to reach some preannounced environmental goals could be understood. In addition, to reflect the environmental degradations caused by various pollutions, the concepts of "Green Accounting" were employed and the "Green GDP's" obtained by considering these pollutions were calculated. This simulation model is a good prototype for integrating economic and environmental issues in a dynamic, interactive, and user-friendly framework.