Abstract for: Using inclusive wealth for dynamic analyses of sustainable development: Theory, reflection and application
The concept of inclusive wealth as an indicator of sustainable development has garnered increasing attention in academic and policy circles. Inclusive wealth is defined as the value-sum of a country’s capital asset stocks, and the associated economic theory states that development is sustainable if this value-sum does not decline through time. This framework for conceptualizing sustainable development should have immediate appeal to the system dynamics community given the centrality of capital stocks, and it represents potential for reaching common ground with the economics community. This paper describes the inclusive wealth framework, highlights gaps in the current literature, as well as areas rife for future system dynamics research. To illustrate how one might apply the framework in a system dynamics case study, it uses water and energy infrastructure policy in the Kingdom of Saudi Arabia (KSA) as an example. Some preliminary results from the case study are presented and analyzed in the context of sustainable development. The paper concludes by discussing how the system dynamics community can embrace the theoretical advances of the inclusive wealth framework in their applied work on sustainable development.