Growth, Prosperity and the environment

Currently the EU and the world face several complex and interconnected challenges. These range from climate change and loss of biodiversity to high levels of inequality and precarious work. At the same time, there is a growing discontent with politics not being able to provide appropriate problem solutions. Over the last years, however, an enormous quantity of ecological and social indicators has been brought up that may serve as a new compass in addressing these challenges and accessing wellbeing and sustainability at the same time. Our contribution shows how these indicators can help to better navigate policymaking while considering sustainability and wellbeing and to replace the currently dominant, GDP-focused approach. The paper gives an insight into the results of an ongoing research project funded by the German Federal Environment Agency, exploring how ecological and social indicators can be better integrated into macroeconomic models (Diefenbacher et al. 2019). The focus of the paper lies on integrating new ecological and social indicators into QUEST, the global macroeconomic policy simulation model of the European Commission’s Directorate-General for Economic Affairs and Finance (DG ECFIN).