Public actors need to monitor the state of the environment to assess the effectiveness of their actions and prioritize their policies. They rely on scientific standards that allow them to define the thresholds at which environmental functions can be considered sustainable.
ESGAP: a scientific tool to assess strong sustainability
In partnership with EcoAct and the French Development Agency (AFD), Vertigo Lab launched a research project on the ESGAP "Environmental Sustainability Gap" tool: it is a strong sustainability assessment tool, developed on a scientific basis(which was developed by researcher Paul Ekins from the Institute for Sustainability Resources at University College London).
Strong sustainability assumes that natural capitals cannot be substituted for other types of capitals such as financial capital or human capital. In other words, development is not sustainable if economic growth is accompanied by a deterioration of the ecological state. Strong sustainability thus recognizes the existence of threshold effects and irreversibility effects in environmental conditions.
Understanding environmental functions at the heart of ESGAP
The ESGAP approach evaluates strong sustainability with indicators grouped according to the 4 environmental functions that correspond to the essential services that the environment provides to the economy and society. The ESGAP tool consists of evaluating the indicators in the form of indices. They have a value ranging from 0 to 100. An index of 100 means that the current ecological state is in good condition, and a value approaching 0 indicates that the gap between the current ecological state and the good ecological state is widening (the ecological state is deteriorating).
The environmental functions retained in ESGAP are:
Resource functions
Resource functions: the environment's capacity to provide natural resources. Indicators associated with sustainable harvesting of fishery, forestry, aquatic resources, etc. can be found.
Well functions
The functions of sinks: the environment's capacity to absorb, dilute, or transform waste and emissions without causing harm to the environment. Indicators associated with greenhouse gas emissions or water quality are found here.
Life support functions
Life support functions: maintaining the capacity to provide the function and health of ecosystems. Indicators associated with ecosystem quality can be found.
Human health and well-being function
The function of human health and well-being: the ability to provide good human health and generate human well-being. Indicators associated with particle concentration and the proportion of natural sites in good condition are found.
ESGAP monetary: quantifying ecological debt
Until now, studies using the ESGAP tool have primarily relied on the construction of these environmental indicators.
The work of Vertigo Lab involved developing an innovative methodology to achieve a monetary assessment, referred to as monetary ESGAP.
This monetary ESGAP aims to estimate the amount of ecological debt expressed in monetary units. This ecological debt corresponds to the additional monetary amount that the country would theoretically need to spend each year to maintain good environmental conditions (by reducing pressures from human activities or restoring degraded ecological states). Currently, no study has yet been conducted to attempt to assess this monetary ESGAP. This is what makes this study innovative.
Experimentation in Vietnam: a structured methodological approach
Vertigo Lab tested its methodology in the case of Vietnam. The choice of this country was justified both by the availability of data and by the significant environmental challenges it faces.
We proceeded step by step:
- We sought to identify the most relevant monetary assessment methods to construct a monetary ESGAP for each of the indicators of the environmental ESGAP.
- We utilized the GLORIA database, developed by the Virtual Laboratory of Industrial Ecology located in Australia. This database allowed us to link socio-economic indicators according to economic activities and environmental pressure indicators for Vietnam.
- We developed an economic-environmental model to assess the costs associated with achieving the good ecological state objectives mentioned in ESGAP based on the socio-economic and environmental indicators mentioned in GLORIA (and other databases, primarily data from the Vietnam Statistical Institute).
The monetary ESGAP provides significant value for policymakers. We were thus able to evaluate the costs associated with each of the ESGAP indicators. This allows the country to understand the financial efforts required to maintain the good state of the environmental functions necessary for the proper functioning of human activities and health.
A strategic tool to guide environmental policies
Therefore, the monetary ESGAP is an important, if not essential, tool to provide necessary elements for a collective reflection on developing an environmental strategy at the national level. This tool can also be used to determine whether the current trajectory of the economy is not occurring at the expense of good environmental conditions, further contributing to the widening ecological debt.
In parallel, we contributed to the research work conducted by our partner EcoAct to assess the economic risks associated with different prospective scenarios.
Three scenarios were constructed:
- net zero emission scenario,
- scenario of good water quality,
- scenario of good biodiversity quality.
For each scenario, we identified the trajectory evolution of the economy and the structure of the economy. By linking the state of the environment, ecosystems, ecosystem services, and the activities that depend on them, EcoAct was able to identify the share of economic activities that depend heavily or very heavily on the state of the environment. This allowed us to estimate the economic risks for Vietnam associated with each of the scenarios.
Recommendations and perspectives for a sustainable strategy
This work enabled us to formulate recommendations for the AFD. Among these recommendations, we can mention the need to evaluate environmental indicators using an environmental footprint approach. This approach has the merit of measuring the efforts required to reduce environmental pressures from human activities or restore a degraded state. Another recommendation is to continue research to better understand the complex links between human activities, environmental pressures, and ecological conditions. This can facilitate the identification of solutions to better reconcile economic development and good ecological conditions, with a monetary valuation of these solutions.
A monetary ESGAP is generally constructed at the national level. This is explained by the relevance of this level in implementing environmental policies.
In decentralized countries (that is, a state in which a significant part of decision-making power and administrative responsibilities is transferred from the central government to local or regional territorial entities), it is entirely feasible and wise to develop a monetary ESGAP associated with an ecological ESGAP at the level of local or regional territories.
