Friday, July 5, 2013

The 4see Framework: Characterizing an Economy by its Socio-economic and Energy Activities

ROBERTS Simon H., AXON Colin J., FORAN Barney D., GODDARD Nigel H., WARR Benjamin
Read the working paper
INSEAD Working Paper 2013/80/ISIC

Investigating the structure and function of an economy in a resource-constrained world requires an understanding of the relationships of its fiscal, social, and environmental elements. We introduce a novel whole-economy analytical framework (the ‘4see framework’) which harmonises multiple national accounting procedures. The fiscal elements align with the international system of national accounts and the energy elements align with physical constraints. In a modular fashion, the 4see framework curates and maintains disparate accounts (economic stocks and flows, energy use, employment, transport) in parallel, but retains each of their unique measurement unit and accounting requirements. We present the UK as a case study to demonstrate how the data organisation and conditioning procedures are generic and will allow model development for other countries. The framework is capable of exploiting time-series ratios between different measurement units to give key functional relationships that vary gradually over time, are robust and thus useful for analysing national policy complexities such as decarbonisation, employment, investment and balance of payments. The 4see framework is neither an exclusively economic, physical or social model. It upholds the integrity of each world-view through retaining their unique time-series datasets. This has the potential to reduce tension between competing models and philosophies of economic development, societal change, environmental refurbishment, and climate change mitigation.