Integrating ecological impact indicators into economic restructuring decisions

Establishing a foundation for policy-making to address sustainable development needs multiple tools and integrating sets of ecological, social and economic indicators into development planning. What is consider in literature as a study gap is, how to integrate the ecological impact criteria into economic development decisions. This is important especially in the context of the restructuring of economic structures in response to natural resource constraints such as water, as well as countries' commitments to reduce greenhouse gas emissions (GHGs). To this end, we used an integrated mathematical programming and environmentally-adjusted input-output methodology. The results showed in terms of stimulation to the economic growth the role of industrial activities comparing to agriculture and services sectors is more prominent in the economy so that Food and beverages and the Communications equipment sectors have the highest forward and backward linkages, respectively. In terms of water use results are different in a large extent so that the Crude petroleum and natural gas and mining industries as well as services sector have higher priority. Highest water footprint belongs to agricultural sub-sectors that consume more than 90 percent of the country's water resources. Highest CO2 footprint among different economic activities belongs to the transportation, industrial activities and Livestock sector. The results of integrated ranking of economic sectors including the weight of each of the three objectives (maximizing production value, minimizing CO2 emission and water consumption) based on policy makers opinions showed that generally agricultural sub-sectors activities have lower position compared to the industrial and service sectors. This result is unlike the policy orientations of development planning in the past which agricultural sector was considered as a key sector of development in Iran. Based on our findings, to achieve a sustainable economic structure a trade-off is needed between different objectives and the emphasis should be on the development of sectors which have higher economic multipliers while having lower water and CO2 emission footprints.