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Towards a green economy Society


Population Nutrition Education


Employment Poverty


Public infrastructure


Economy Agriculture Fishery Forestry Industry Services


Economic accounts


Environment Land


Water Energy Waste


Emissions Footprint


Figure A1: Spheres and sectors of T21-World


World are grouped into 18 sectors: 6 social, 6 economic and 6 environmental sectors, as listed in Table 9. Sectors are groups of one or more modules of similar functional scope. For example, the water sector groups both the water demand and water supply modules. Finally, for convenience in summarising and communicating the results, society, economy and environment are known as the three spheres of T21-World. All sectors in T21 belong to one of the three spheres,29


depending on the type of


issue they are designed to address. Modules are built to be in continuous interaction with other modules in the same sector, across sectors, and across spheres.30 lists the spheres, sectors and modules of T21-World.


Table 9


The Social sphere of T21-World contains detailed population dynamics organised by gender and age cohort. Fertility is a function of the level of income and education and mortality rates are determined by the level of income and the level of access to basic health care. Access to education and health care services, nutrition, employment and basic infrastructure are also represented in this sphere. Access to basic social services is used – in addition to income – to determine poverty levels in a broad sense. Social development is highly connected to economic performance in T21-World. As economic conditions improve, a higher proportion of expenditure is allocated to health care and education, among others, increasing labour productivity and, thus, faster economic growth.


The Economy sphere of the model contains several major production sectors (agriculture, fishery, forestry, industry


and services). Production is generally


characterised by modified Cobb-Douglas production functions (See Box A1) with inputs of labour, capital, and technology, with the specification varying from sector to sector. Agriculture, fishery and forestry production is highly influenced by the availability and quality of


29. In certain country customisations, with energy being a key area of analysis and using a variety of modules, we represent it as the 4th sphere of T21.


30. Causal loop diagrams (CLD) highlighting the main structural


components of each sector modelled and analysed in the GER are presented in section VII, Technical Background Material.


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31. There is no requirement imposed, even in the green investment scenarios, that stocks reach an equilibrium state.


natural resources. While capital and labour contribute to production, the stock of fish, forest and the quality of soil - together with water availability for agriculture - are also important determinants of output in these sectors.


For this reason T21-World tracks the physical flow of key natural resources, endogenously calculating depletion and its impacts on production.31


Further, production in


the three major economic sectors is influenced by social factors, such as life expectancy and education level, included in the calculation of total factor productivity (TFP) together with the impact of natural resources availability and energy prices. These feedback effects are sufficiently important that in the business-as-usual scenario, the annual rate of world GDP growth gradually falls from about 2.7 per cent per year in the period 2010– 2020 to 2.2 per cent in the period 2020–2030 and further to 1.6 per cent in the period 2030–2050.


The Environment sphere tracks land allocation, water, waste and energy demand and supply. T21-World calculates also air emissions (CO2


, CH4 , N2 O, SOX


and greenhouse gas) and the ecological footprint. Economic activities and demographic growth create increasing pressure on natural resources, while at the same time allowing for development of better and more efficient technologies. In the case of energy, stocks of fossil fuel resources and reserves are explicitly and endogenously modelled. These stocks are among the primary drivers of fossil fuel prices, which are calculated by taking into account short and longer term trends. Fossil


fuel prices, in


turn, influence oil exploration and discovery as well as energy demand, and, as a consequence, oil recovery – creating a variety of feedback loops (see Bassi 2009, and section III in the Technical Background Material for more details).


In order to validate the model, both structural and behavioural tests were carried out. On the structural validation, T21-World and its sectors were designed based on existing state-of-the-art sectoral models with updated data. The knowledge gained through the review of these models was then translated into T21-World, exogenous inputs were replaced with endogenous ones, and causal relations were explicitly represented in a disaggregated manner. The new structure of each sector was then verified and validated comparing the behaviour of the model against historical data (normally from 1970 until 2008). More detailed analyses were then performed to identify and analyse the causal relations included in the model and the relevance of exogenous assumptions (or drivers), through the


simulation of sensitivity analyses for


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