Proposal Papers for Policy Making and Governmental Action toward Low Carbon Society

LCS-FY2015-PP-14

Development of an Indicator to Evaluate Social Welfare Moving toward Sustainable Society

Summary

 It is important not only to spread the low-carbon technology but also to measure the progress of the spread and the technology’s effect on economic society when a dynamic and affluent low-carbon society is delivered. Sakamoto and Managi [1] analyzed the social welfare considering environment as well as other social issues.

 The methodologies basically follow the recent previous literature and they incorporate available data on air pollution and climate change into the original social welfare function. Income is widely used as a measurement of social welfare but has a difficulty to evaluate the environmental issues. The analysis makes it possible to consider an influence of environmental damage on social welfare using some data on air pollution and climate change. This report explains the analytical tool to evaluate the social welfare considering the environment and other factors and shows the results of welfare calculation. Our calculation has a possibility to represent the social welfare in a manner consistent with a conventional measurement using income. We find that some countries at low income level have their welfare exceeding their income and ones at high income level have their welfare underrunning their income. From this, it is significant that economic developments and supports is based on socioeconomic conditions in a country at lower social welfare level and the development and support using the low carbon technology contribute to efficient enhancement of their welfare. It is also important to develop market mechanisms, such as financial support and market transaction under the patent protection, to spread the low carbon technology in many countries.

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