Green economic development in Lao PDR: A sustainability window analysis of Green Growth Productivity and the Efficiency Gap

Affiliations

(a) Finland Futures Research Centre, University of Turku, Finland

(b) National University of Laos, Faculty of Engineering, Laos

(c) Europe University of Flensburg, Germany

(d) Viikki Tropical Resources Institute (VITRI), University of Helsinki, Finland

(e) Helsinki Institute of Sustainability Science (HELSUS), University of Helsinki, Finland

Abstract

A novel ‘Sustainability Window’ (SuWi) approach is applied for simultaneous analysis of the pillars of sustainable development; social, environmental and economic, of Lao PDR. This new method employs a variety of indicators for a comprehensive and holistic analysis of sustainable development and green inclusive economy. The analysis is grounded in the assumption that economic development is required for social development, but that simultaneously development needs to be guarded or limited to protect the environment that underpins it. As all three dimensions of sustainable development are interlinked, a comprehensive analysis requires an analytical approach that is simultaneous. The analyses provide information on minimum levels of economic development that are needed to fulfil social sustainability criteria, in tandem with the maximum economic development that avoids breaching environmental sustainability criteria. If actual economic growth lies between these minima and maxima, we can interpret that development is more sustainable with respect to the relationships embodied by the selected social and environmental indicators. The main source of data is the database of the Sustainable Society Index (SSI) developed by the Sustainable Society Foundation (SSF). The indicators used by SSI have been chosen for the Sustainability Window analysis as they can be used to assess both ‘weak’ and ‘strong’ interpretations of sustainability. Weak sustainability is defined operationally as no increase in the environmental or carbon emissions intensity of the economy, while strong sustainability is defined as no increase in absolute emissions. Further, a novel Environmental Efficiency Gap analysis has been included in the Sustainability Window. This provides information about the necessary improvement in GDP production efficiency with respect to environmental emissions. Sustainability Window combined with Environmental Efficiency Gap analysis, provides critical knowledge for planners and decision makers. It provides strategic indications of how to aim for social and environmental sustainability through economic investment and growth targets. These new methods can be used in transdisciplinary research of sustainable development and can also assist in national and regional comparisons. In the case of Lao PDR, the analysis needs to be broadened for more fundamental understanding of the gaps and weaknesses. SuWi can be used to assess the sustainable development needed to address the Sustainable Development Goals by 2030. The SuWi does not provide direct policy recommendations as such, but helps to inform decision makers about the direction of development pathways towards these key goals.

Cite

Luukkanen, J., Kaivo-oja, J., .Vähäkari, N., O’Mahony, T., Korkeakoski, M., Panula-Ontto, J., Phonhalath, K., Nanthavong, K., Reincke. K., Vehma, J., Hogarth, N., 2018. Green economic development in Lao PDR: A sustainability window analysis of Green Growth Productivity and the Efficiency Gap. Journal of Cleaner Production, https://doi.org/10.1016/j.jclepro.2018.11.149.