Environmental Economics for Evidence Based Policy: Vol. 2, No. 1: Strategies for Green Growth: An Application of the IEEM ESM Platform to Rwanda

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Nov 2019
Rwanda has made strong progress in reducing poverty and enhancing economic growth in the last 15 years. Nonetheless, with the highest population density in Africa and its population projected to double by 2050, maintaining sustainable economic growth with increasing pressure on its natural capital base poses formidable challenges. Rwanda is committed to green growth and to transition from a subsistence agricultural economy to a knowledge-based economy and achieve middle income status by 2035. In this policy brief, we explore the impacts of actions to achieve green growth through an innovative Integrated Economic-Environmental Model (IEEM) Platform that was calibrated with the countrys new natural capital accounts and linked with ecosystem services modeling (ESM). The IEEMESM approach is powerful in its ability to shed light on: (i) change in land use and ecosystem services driven by public policy and the supply and demand responses of businesses and households, and; (ii) impacts on standard economic indicators of concern to Ministries of Finance such as gross domestic product and employment, as well as changes in wealth and ecosystem services, which are indicators of long-run sustainable economic development and income growth.