Modelling degrowth policies with system dynamics: Towards policy coherence

Degrowth policies have been proposed as a way to reduce environmental pressures and advance social equity. While such policies have been discussed extensively in qualitative terms, a proper quantification of their socio-economic and environmental impacts is fundamental to assessing their effectiveness. We use the iSDG-Sweden system dynamics model to study the impacts and dynamics of combined degrowth policies in the macroeconomic context of a high-income country, for the years 2026 to 2050. Our results indicate that the simulated policies are effective only when applied as a coherent package; when implemented in isolation, trade-offs emerge. The model simulations show how downscaling production with high footprints, combined with reducing working hours and redistributing income and wealth, causes rapid reductions in environmental pressures while reducing poverty, inequality and unemployment. Fiscal analysis indicates short-term feasibility of financing the simulated policy package through increased tax revenues, but highlights long-term risks of rising government debt, requiring complementary reforms or deeper structural changes to reduce debt vulnerability. These findings demonstrate how system dynamics modelling can integrate environmental and socio-economic dimensions of post-growth pathways, and suggest policy coherence is critical for a sustainable and just degrowth transition.