Simulation of Regional Development of Bioeconomy under
Slowbalization
Iluta Arbidane
1a
, Hanna Purii
2b
, Alla Dvigun
3c
, Mansur Mamanazarov
4d
and Oleg Padalka
5e
1
Rezekne Academy of Technologies, 115 Atbrivosanas aleja, Rezekne, LV-4601, Latvia
2
State University of Economics and Technology, 16 Medychna Str., Kryvyi Rih, 50005, Ukraine
3
National Institute for Strategic Studies, 7-A Pyrohova Str., Kyiv, 01030, Ukraine
4
National University of named after Mirzo Ulugbek, Tashkent, 100060, Uzbekistan
5
National Pedagogical Dragomanov University, 9 Pyrohova Str., Kyiv, 01601, Ukraine
Keywords: Stratification, Regional Economic Systems, Slowbalization, Regional Greening Programmes, Greening Trend
of the Economic Development, Environmental Performance Index, Changes in The GDP Growth, Regional
Development Simulation, Environmental Innovation, Bioeconomy Development.
Abstract: The article studies preconditions for stratification of regional economic systems. The study shows that
development of greening processes is becoming much more complicated due to slowbalization of regional
economies and the COVID-19 pandemic. It substantiates the need to coordinate regions’ greening
programmes with development of their economic systems and strategies stimulating bioeconomy to recover
economies and achieve results of greening in the context of slowbalization. The article considers ongoing
processes of protectionism of national economies at the regional level under slowbalization. It analyzes the
world’s real GDP by regions as an indicator of economic systems activity. The authors give prospective
assessment of development scenarios for economies of emerging markets and developing countries. It
substantiates main tasks of bioeconomy development, implementation of which will ensure the economic
growth required for the effective use of the biological system with minimal harm to the environment and, in
general, harmonize the socioeconomic development.
1 INTRODUCTION
Over the past decades, extensive greening has been
taking place in many European countries. At present,
research centres are being established, scientific and
technical programmes to support environmental
innovative technologies are being organized.
Sustainability issues are slowly but surely embracing
the global community. The main research fields are
global warming and alternative energy sources as a
precondition of future survival and safety of the world
population.
For example, Norway aims to be a country with
virtually zero industrial CO
2
emissions by 2030.
a
https://orcid.org/0000-0002-9762-3874
b
https://orcid.org/0000-0003-4226-4445
c
https://orcid.org/0000-0002-0168-8682
d
https://orcid.org/0000-0003-3936-0954
e
https://orcid.org/0000-0001-5846-4826
Germany is going to switch to 100% alternative
energy sources by 2040, while Sweden wants to make
the majority of houses fuel-free as early as in 2020
(Kharin and Purii, 2020). The Icelandic government
actively promotes the use of green technologies (The
Ministry of Economic Affairs and Climate Policy,
2019). To explain why this movement is intensifying,
it should be marked that enhancement of
environmental legislation and state subsidies play an
important role.
However, the total greening rate at the regional
level has bigger differences. It is obvious that highly
developed regions have greater opportunities for
investing in resource conservation and reducing the
Arbidane, I., Purii, H., Dvigun, A., Mamanazarov, M. and Padalka, O.
Simulation of Regional Development of Bioeconomy under Slowbalization.
DOI: 10.5220/0011341900003350
In Proceedings of the 5th International Scientific Congress Society of Ambient Intelligence (ISC SAI 2022) - Sustainable Development and Global Climate Change, pages 85-92
ISBN: 978-989-758-600-2
Copyright
c
2022 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
85
destructive impact on the environment. Concurrently,
their negative impact on the world environment is
growing with the development of industry.
Meanwhile, underdeveloped regions have a sufficient
level of environmental safety due to low rates of
environmental destruction explained by low rates of
industrial development in these regions. At the same
time, the level of implementation of environmental
innovations in these systems remains low.
Development of greening processes is becoming
much more complicated due to slowbalization of
regional economies and the COVID-19 pandemic. In
2020, the global pandemic and corresponding
restrictive measures led to the worst economic crisis
since the World War II. It mainly impacted the
service sector, transport and carbon-intensive power
generation. Installation of new capacities for wind
and solar panels had higher growth rates during the
crisis, which are expected to maintain the same high
level in future (Arbidane et al., 2021).
However, in 2021, good economic recovery is
expected in the G20 countries, judging by the first
few months, as their GDP will surpass the 2019 value.
In 2020, energy consumption retarded sharply, with
the exception of China, but this was only a cyclical
drop as in 2021 energy consumption will return to the
level of 2019 (International Energy Agency, 2021).
Therefore, there is a need to coordinate regional
greening programmes with the development rate of
their economic systems and design of strategies that
promote bioeconomy to recover economic systems
and achieve goals of greening in the context of
slowbalization.
The research aims to study correlation between
changes in the environmental performance index
(EPI) values and changes in the GDP growth in
developing regions of Europe and substantiate the
need to introduce basic principles of bioeconomy
development for the effective use of the biological
system with minimal harm to the environment.
Research methods. During the research, methods
of analysis and synthesis are used. The study is based
on official data from key world energy statistics,
world economic statistics and Internet resources.
2 RESULTS
In the last decade, the world economy is transiting
from total globalization to more restrained slow
stabilization. Escalating tension between nationalism
and globalization is going to become one of the most
determinant into the next decade. Protectionism of
national economies at the regional level will be the
key to further development in the context of
slowbalization.
Current processes of slowbalization can
strengthen regional ties within economic systems.
However, regional de-globalization provokes new
challenging conditions for development. For
instance, between 1990 and 2010, most rapidly
developing countries were able to partially bridge the
gap between themselves and developed countries,
which allowed them to compete on global markets.
Although in the context of regional slowbalization, it
will be even more difficult to bridge the gap between
developing and developed regions. After all,
developed regions will be able to make a rapid leap in
their development due to high initial potential. At the
same time, weak economic systems without such a
foundation will depend on developed systems.
Thus, slowbalization will not solve the problems
created by globalization, but will only cause even
greater stratification of economic systems.
Rapid development of regional slowbalization
during the coronavirus crisis has caused a slump in
the GDP of many countries (Table 1) (The World
Bank, June, 2021a).
Table 1: Real GDP in the world regions as compared to the
previous year, %.
Region 2017y 2018y 2019y 2020y
Worl
d
3.3 3.2 2.5 -3.5
Developed
economies
2.5 2.3 1.6 -4.7
Emerging
markets and
developing
countries
4.5 4.6 3.8 -1.7
Eastern Asia and
the Pacific re
g
ion
6.5 6.5 5.8 1.2
Europe and
Central Asia
4.1 3.5 2.7 -2.1
Latin America
and the
Caribbean re
g
ion
1.9 1.8 0.9 -6.5
Near East and
Northern Africa
1.1 0.6 0.6 -3.9
South Asia 6.5 6.4 4.4 -5.4
Africa to the
south of the
Sahara desert
2.6 2.7 2.5 -2.4
The global economy is expected to increase by
5.6% in 2021, this fact indicating the fastest recovery
rate after the decline for the past 80 years. This
recovery is uneven and largely driven by an increase
in economic activity in some large countries. In many
emerging markets and developing countries, barriers
ISC SAI 2022 - V International Scientific Congress SOCIETY OF AMBIENT INTELLIGENCE
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to vaccination continue to hamper their economic
activity.
About two-thirds of these economies will not be
able to compensate for the decline in per capita
income by 2022. At the global level, there is a
predominance of a negative development risk.
Possible new waves of COVID-19 and financial
shocks against the background of a high debt level of
developing countries are some of risk factors here.
Policymakers will have to balance the need to foster
economic recovery and maintain price and fiscal
stability, as well as making further efforts to
implement reforms that boost the economic growth.
Now, to overcome stagnation and stratification in
European countries is an urgent problem. Central
Europe is expected to increase its economy by 4.6%
between 2021 and 2022, which is supported by
restored trade. Exceptional stimulus policies are
expected to continue throughout 2021. It is also
expected to prolong the EU-provided large-scale
finance packages intended for the EU Member States
to compensate for the investment gap (The World
Bank, June, 2021b).
In general, the economic growth is expected to
stabilize at the level of 3.9% in 2022. However, the
GDP per capita is forecast to be 5.3% lower as
compared to expectations at the start of the pandemic
(The World Bank, June, 2021b).
At the same time, in recent years, the trend of
“greening” economic development can be observed
in all the regions, yet, the rate and scale of
transformations are far from the desired level.
The pandemic and the economic crisis have
impacted almost every aspect of energy production,
supply and consumption around the world. The
pandemic set energy and emissions trends in 2020
reducing fossil fuel consumption for most of the year,
while renewables and electric cars, two of the main
building blocks of clean energy transition, were
largely insensitive.
According to the latest statistics, since primary
energy demand fell by almost 4% in 2020, global
energy-related CO
2
emissions reduced by 5.8%,
which had been the largest annual percentage decline
since the World War II. In absolute terms, a reduction
in CO
2
emissions of almost 2.000m t is unprecedented
as, broadly speaking, it is compared to removing all
European Union emissions from the global total.
Fossil fuel demand hit the hardest in 2020, especially
oil, which fell by 8.6%, and the coal industry, which
reduced by 4%. The annual decline in oil was the
largest ever accounting for more than half of
reduction in global emissions. Global emissions from
oil use fell by more than 1.100m t of CO
2
, down from
about 11.400m t in 2019 (International Energy
Agency, 2021).
These factors have influenced ranking values and
dynamics of the most environmentally friendly
countries in the world. The Environmental
Performance Study measures a country’s
achievements in terms of the environment state and
natural resource management based on 22 indicators
in 10 categories that reflect various aspects of the
natural environment and viability of its
environmental systems; conservation of biological
diversity, counteraction to climate change, the state of
people’s health, economic activity and its load on the
environment, as well as effectiveness of the state
policy in the field of environment protection
(Table 2) (Wendling, et al., 2020; Hsu, et al., 2014;
Yale Center for Environmental Law & Policy, 2016;
Yale Center for Environmental Law & Policy, 2018).
Table 2: EPI ranking: European countries (2014y – 2020y).
Country EPI
2014
y
2016
y
2018
y
2020
y
France 71.05 88.20 83.95 80.00
Denmar
k
76.92 89.21 81.60 82.50
Malta 67.42 88.48 80.90 70.70
Sweden 78.09 90.43 80.51 78.70
Luxembur
g
83.29 86.58 79.12 82.30
Austria 78.32 86.64 78.97 79.60
Irelan
74.67 86.60 78.77 72.80
Finlan
d
75.72 90.68 78.64 78.90
S
p
ain 79.79 88.91 78.39 74.30
German
y
80.47 84.26 78.37 77.20
Bel
g
iu
m
66.61 80.15 77.38 73.30
Ital
y
74.36 84.48 76.96 73.00
The Netherlands 77.75 82.03 75.46 75.30
Greece 73.28 85.81 73.60 69.10
C
yp
rus 66.23 80.24 72.60 64.80
Portu
g
al 75.80 88.63 71.91 67.00
Slovakia 74.45 85.42 70.60 68.30
Lithuania 61.26 85.49 69.33 62.90
Bulgaria 64.01 83.40 67.85 57.00
the Czech Re
p
. 81.47 84.67 67.68 71.00
Slovenia 76.43 88.98 67.57 72.00
Latvia 64.05 85.71 66.12 61.60
Croatia 62.23 86.98 65.45 63.10
Hungary 70.28 84.60 65.01 63.70
Rumania 50.52 83.24 64.78 64.70
Estonia 74.66 88. 59 64.31 65.30
Polan
d
69.23 81.26 64.11 60.90
Ukraine 49.01 79.69 52.87 49.50
Meanwhile, low-carbon fuels and technologies, in
particular solar photovoltaic and wind energy, have
reached the highest annual share in the global energy
balance in history, increasing it by more than one
Simulation of Regional Development of Bioeconomy under Slowbalization
87
percentage point and exceeding 20% (International
Energy Agency, 2021).
In 2020, energy-related CO
2
emissions reduced
dramatically. One of the main reasons for that was a
strong impact of the pandemic on the transport sector
and the decline in fossil fuel power production. Yet,
in the future, a jump is expected with energy intensity
returning to its historical trends.
In particular, scientists predict recovery of the
coal industry that in 2021-2022 will exceed the level
of 2019 by 1%. A significant recovery in power
demand is also expected + 3%. At the same time, not
all strategic areas of the economy will be able to
promptly restore their previous volumes. Gas
consumption will decrease by 0.1%, the transport
system will continue to stagnate (-4%), the oil
industry will not be able to exceed consumption
levels of 2019 (-2.9%) (Figure 1-3).
Comparison of changes in the EPI with those in
the GDP growth in developing regions of Europe
indicates a stable decrease in the level of their
greening (Fig. 1-3). Dynamics of changes in the EPI
values determines the nature of the dependence and
enables building dependence equations for further
prediction. According to the equations obtained (Fig.
1-3), = 0.98 which indicates significance of certain
dependences and allows you to forecast the EPI for
the regions under analysis (Figure 4).
Reduction in energy demand, and consequently in
emissions in 2020, will be actually offset in the
forecast period, while the numbers of 2021-2026 will
be lower than those in 2019, even in the context of a
slow recovery of regional economies.
As can be seen from Fig. 4, the countries
possessing natural resources are facing another
problem – a strong dependence on the export of fossil
fuels and products of “environmentally unfriendly”
industries (metallurgy, chemical industry, etc.). This
makes it difficult to implement greening in the
countries that are reluctant to change their industry,
while there is a strong demand for those products on
international markets. High-income countries,
especially those operating within the EU and OECD
legal framework, are actively involved in greening
their economies due to strict requirements imposed by
these international organizations, financial and
methodological support, technological cooperation
and exchange of experience. Without international
participation, commitments and implementation
mechanisms, many countries tend to adopt
predominantly declarative goals, not implementing
their greening strategies and basically avoiding
setting clear qualitative and quantitative targets.
* forecast period
Figure 1: Comparison of changes in the EPI with those in the GDP growth in Uzbekistan in 2014-2020 (Wendling,
et al.
,
2020; Hsu,
et al.
, 2014; Yale Center for Environmental Law & Policy, 2016; Yale Center for Environmental Law & Policy,
2018; The World Bank,
Dec,
2021a).
ISC SAI 2022 - V International Scientific Congress SOCIETY OF AMBIENT INTELLIGENCE
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* forecast period
Figure 2: Comparison of changes in the EPI with those in the GDP growth in Latvia in 2014-2020 (Wendling,
et al.
, 2020;
Hsu,
et al.
, 2014; Yale Center for Environmental Law & Policy, 2016; Yale Center for Environmental Law & Policy, 2018;
The World Bank, Dec., 2021b).
* forecast period
Figure 3: Comparison of changes in the EPI with those in the GDP growth in Ukraine in 2014-2020 (Wendling,
et al.
, 2020;
Hsu,
et al.
, 2014; Yale Center for Environmental Law & Policy, 2016; Yale Center for Environmental Law & Policy, 2018;
The World Bank, Dec., 2021c).
Simulation of Regional Development of Bioeconomy under Slowbalization
89
* forecast period
Figure 4: Dynamics and forecast of changes in the EPI in Uzbekistan, Latvia and Ukraine in 2014 -2026 (built by the authors).
At the same time, some European countries are
actively involved in the greening agenda and have
succeeded in that. Slovakia has become the leader in
terms of greening indicators surpassing many
developed countries, while Slovenia is the best in eco-
innovations in Eastern Europe and Eurasia.
On the other hand, low-income countries continue
to struggle with socio-economic challenges and
poverty, rather than implement greening and
sustainability strategies.
To some extent, the current energy systems and
infrastructure inherited from the socialism times, as
well as behaviour, managerial and business models
represent a significant barrier to greening. On the
other hand, lack of financial resources and experience
in implementing the "green" approach also hinders
rapid evolution of the socioeconomic system,
especially in low- and middle-income countries. In
this respect, international support (including financial
assistance, technology transfer, knowledge exchange
and potential development) is essential, and large-
scale international cooperation with low-income
countries should play a leading part in the greening
process. Analysis of this region’s countries indicates
the key barriers to effective greening policies which
include frequent political changes, lack of
institutional potentials, insufficient financing, wrong
priorities, corruption and dominant traditional
businesses in elaboration and implementation of
economic policies.
Total research and development costs in
developing European countries are very low as
compared to those in developed countries. This may
result from poor patenting activity and lack of
competence in major green innovations and
technologies. For this reason, in this situation, green
technologies can be based on borrowing foreign
innovations and adapting them to local conditions, at
least in the medium run.
The obtained results of regional development
simulation in the context of slowbalization indicate
the need to introduce basic bioeconomy principles to
enhance the economic growth due to effective use of
the biological system with minimal harm to the
environment and, in general, harmonize
socioeconomic development (Tilica, 2021).
Bioeconomy is the economy based on application
of biotechnology with renewable biological raw
materials. Development of bioeconomy sectors
involves increasing energy efficiency, application of
waste materials, development of renewable biomass
energy, greening of the industrial sector, increased
sustainability of agriculture, production of new food
products, and development of medical technologies.
Implementing bioeconomy principles has resulted
in recent environmental innovations, which ensure
rapid greening of regional economic systems.
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Among the latest green innovations are saving
natural resources and reducing harmful effects on the
environment (Figure 5).
Figure 5: The latest green innovations.
The latest green innovations, namely:
- E-streets as the illumination technology used in
Europe;
- the autonomous eco-city of Masdar in the UAE
designed to implement various eco-technologies
without negative impacts on the environment;
- HCPV-systems as effective and inexpensive
sources of power;
- biodiesel as a rapeseed oil-based fuel that is
environmentally friendly and reduces carbon
emissions;
- electric cars as personal vehicles not emitting
exhaust gases (Kharin, et al., 2020);
- wood fuel briquettes for heating boiler rooms
with minimal smoke emission;
- Dustbot robot cleaner removing rubbish and
monitoring the air pollution level;
- synthetic trees for CO
2
absorption;
- a Chinese power plant on chicken manure that
uses poultry farm waste as fuel;
- the road surface that cleans the air from exhaust
fumes that is produced from concrete with added
titanium dioxide (Dogaru, 2020).
Therefore, creation of an ecosystem for startups is
a prerequisite for increasing the number of domestic
“green” innovations. The process of invention and
obtaining innovative products and technologies is
time- and labour-consuming. There is a need for
effective legal regulation and institutions, venture
capital funds, support for product commercialization
and market access. Currently, most innovations result
from long-term corporate investments, while market
barriers to innovations are still high.
3 CONCLUSIONS
International experience shows that the following
environmental policies can contribute to the
sustainable and “green” economic growth in
slowbalization conditions:
- supporting an increase in natural, physical, and
human capital (Botelho et al., 2021);
- increasing productivity in terms of renewable
energy sources (Kharin, Purii, 2020);
- boosting “green policy” incentives for
innovations to improve the environmental
performance of firms and households in the regions
(The Ministry of Economic Affairs and Climate
Policy, 2019)
Introduction of “green growth technologies in
slowbalization conditions requires more active and
effective integrated work aimed at controlling the
market. “Green” innovations in the industrial policy
should be intensified and accompanied by eliminating
barriers that negatively affect “green” transformation.
The research indicates that there is no single solution
for different regions, as the best solutions for each
region result from different institutional potentials,
transparency, reporting and the degree of community
involvement. At the same time, “green” growth
strategies should meet specific requirements of each
country. So, care should be taken when applying the
best practices to real-life conditions.
Based on the above, it can be stated that
development of bioeconomy requires cooperation
between governments, businesses, academic and
expert circles to solve the following tasks:
- creating the national greening strategy to achieve
ambitious “green” results and developing a roadmap
for fulfilling specific tasks;
- creating a system of greening indicators to
monitor and evaluate the process, identify failures
and develop corrective measures;
Simulation of Regional Development of Bioeconomy under Slowbalization
91
- adapting implementation mechanisms based on
goals and objectives defined in the Greening Strategy:
“green” taxes, pollution duties, subsidies for green
transport and eco-technologies, elimination of fossil
fuel subsidies, green purchases, green bonds, etc.;
- increasing awareness and provoking behavioural
changes of firms and individuals: the faster people
open up to greening, the faster and smarter it will be;
- building a potential for deep and widespread
changes in the economy, production and
consumption, expanding specialists’ competencies
and qualifications;
- supporting eco-innovations and “green
technologies, creating ecosystem startups;
- financial resources that are the foundation for
greening and eco-innovations; venture capital
required for domestic innovations and startups, as
well as for adapting foreign innovations;
- international commitments and opportunities
that can enhance the economic growth.
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