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Abstract
This paper proposes a new tool for the measurement and projection of sustainability: the FEEM Sustainability Index (FEEM SI). This is an innovative measure of sustainability built within a dynamic computable general equilibrium model, the Intertemporal Computable Equilibrium System (ICES) in its adapted version to assess sustainability ICES SI. The FEEM SI combines indicators on economic, social, and environmental sustainability to construct a unique measure of overall sustainability. Thanks to its construction within a dynamic computable general equilibrium model, the FEEM SI is able to project indicators in time and evaluate sustainability in the future under different economic growth and policy scenarios. With the purpose to illustrate the methodology and highlight its potentials in making sustainability a more operative concept, this paper provides an example of the effects of the introduction of a composite policy aimed at improving overall sustainability and shows how the choices we make today can change our future.