We surveyed the economic models used to analyze and evaluate the impact that global environmental policy aimed at reducing the volume of carbon emissions arising from economic activity has on the economy. Typical examples of such economic models are the models that are referenced in the IPCC’s series of Assessment Reports. Rather than single-country economic models, these are world economic models, and while they share a common foundation as economic models, they also differ in some aspects and the analytical results lack uniformity, exposing their diversity. Economic models are representations, in the form of numerical models, of the correlation between the global environment and economy, but these models vary depending on differences in thinking, and, accordingly, the analytical results also vary. However, what is important is whether the discrepancies in the calculation results can be reproduced after the fact by a third party, and that causes of this diversity can be verified and are not hidden in a black box.

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It has been theoretically shown that a necessary condition for sustainability is ensuring that comprehensive wealth―including natural capital―does not decrease. Because of this, in recent years the Inclusive Wealth Index, which actually measures this wealth, has attracted attention as a sustainability indicator. In this paper, we review the policy, theoretical, and empirical research background, and as one example we examine the issues encountered when incorporating water into natural capital. Intra-generational equity, the effects of population decline, aggregate spatial scale, and shadow price estimates are identified as areas for future research.

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At sessions entitled Environmental Challenges in East Asia in the Society for Environmental Economics and Policy Studies, many papers have been presented on the state, damages and underlying causes of environmental degradation, theoretical and empirical analysis that provide grounds for actions, Japan’s role as an initiator or mediator of environmental policies in East Asia. The paper reviews members’ papers to summarize what have been found out on these issues so far. It prospects that that further theoretical and empirical researches are required to convince East Asian countries to move toward sustainable development pathways, such as alternative development model to the growth-oriented strategy, international relocation of environmental degradation, and transition management.

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We reviewed environmental valuation studies with regard to future developments, particularly in Japan, organizing major previous studies and the latest results of studies of environmental valuation. Firstly, we gave thorough consideration to previous Society for Environmental Economics and Policy Studies reports. Secondly, we introduced a latent class model, a Kuhn-Tucker model, best-worst scaling, and deliberative monetary valuation as new directions in the study of environmental valuation. Thirdly and lastly, we conducted a thorough review of benefit transfer, which is expected to see increasing use in decision making for future policy and business.

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