Modelling what matters: How do current models handle environmental limits and social outcomes?

Models that represent the economy, society, and environment are critical macroeconomic policy tools. However, economic output as measured by Gross Domestic Product (GDP) is increasingly being seen as an unreliable and undesirable economic indicator and policy goal. Instead, multiple indicators of environmental impacts and social outcomes are needed to make decisions about sustainable development. Drawing on the Doughnut of social and planetary boundaries, and the Sustainable Development Goals, we analyse 50 models to assess the state of the art in modelling the environment, society, and economy. We categorise models according to their economic foundation and modelling approach, assess their coverage of 15 environmental and 21 social indicators, and identify feedbacks between different model parts. We further construct a targeted sample of 15 models that represents the diversity in modelling approaches and indicator coverage, and use this sample to investigate how environmental and social indicators are linked to macroeconomic drivers. For the environment, indicator coverage is best for climate change, energy use, and land conversion. Within current models, environmental impact is largely driven by GDP and agricultural production. For society, coverage is best for jobs, income (wages and inequality), and productivity. Within current models, social outcomes are largely driven by income per capita, government spending, and governance. Models rarely contain feedbacks from the environment and society to the economy, and few include any biophysical limits. The current focus on monetary flows limits understanding of the interconnections between environmental, social, and economic systems. We argue that modellers should rely less on economic variables as determinants of social and environmental outcomes. Specific provisioning systems could be modelled in more detail to allow models to explore growth-agnostic ways of achieving a good life for all within environmental limits.