Volume 17: Technology Innovation to Accelerate Energy Transitions

The Food-Energy-Water-Nexus and a Keynes Sector in a Post Growth Economy – Learnings from a CGE Model Holger Schlör, Stefanie Schubert

Abstract

In its reports, the IPCC demands new prosperity ideas (i.e., new post-growth economic models (change of lifestyle, institutional innovations and networks of neighbourhood help
[1])) to solve the climate crisis [2, 3]. Therefore a Keynes sector covering non-market economic activity is modelled in an intertemporal dynamic multinational Computable General Equilibrium model (CGE model) [4]. The CGE model consists of four countries (A, B, C, D) with three economic sectors (Food-Energy-Water (FEW)-sector, public and private service,
industry) each and country D has a derived Keynes sector representing the ideas of the post growth approach [5].
We discuss the economic effects of our CGE model in a scenario where the countries’ growth rates differ: Country A follows a zero-growth pathway, B and C grow by moderate rates, and country D is on a de-growth scenario. Using the CGE model, we discuss the implementation of a Keynes sector in an open economy with trade relations to the other three countries. This model approach reveals the possible socio-economic consequences and alterations of various growth models for the FEW Nexus sector, as well as the other economic sectors of the four countries.

Keywords FEW-Nexus, CGE Model, Keynes sector