Modelling the European Union Sustainability Transition: A Soft-Linking Approach

Round 1

Reviewer 1 Report

I have reviewed the manuscript "Modelling the EU sustainability transition: a soft-linking approach", Manuscript ID: sustainability-1236181 that has been submitted for publication in the MDPI Journal Sustainability and I have identified a series of aspects that in my opinion must be addressed in order to bring a benefit to the manuscript. In this paper, the authors propose a methodological framework with a soft-linking exercise, combining Systems Thinking (ST) with a Computable General Equilibrium (CGE) model to assess the outcomes of the European Green Deal (EGD).

I consider that the article will benefit if the authors take into account the following remarks and address within the manuscript the signaled issues:

Overall comments regarding the manuscript.

The Main Strong Point. The manuscript under review approaches a very interesting topic for the experts in the field.

The Main Weak Point. The Manuscript ID: sustainability-1236181 is interesting, but its main weak point consists in its structure. If the authors make an effort to improve the structure of the manuscript and complement it with the recommendations from the specific comments, the authors will arrive at an article that can bring a valuable insight to the current state of knowledge.

Specific comments regarding the manuscript.

Remark 1. The devised approach. I appreciate the fact that the authors have included in their analysis the effects of the COVID-19 pandemic crisis. However, I would like the authors to analyze in the "Discussion" section of the paper how their developed approach can be adjusted as to take into consideration other potential abnormal economic situations, such as financial crises, economic collapse, energy crises.

Remark 2. The sections of the manuscript. The manuscript under review will benefit if it is restructured in accordance with the Sustainability MDPI Journal's Template that provides a more logical structure that is much more appropriate for a research article. In addition to this, according to the "Instructions for Authors" from the Sustainability MDPI Journal's website (https://www.mdpi.com/journal/sustainability/instructions), "Sustainability now accepts free format submission: We do not have strict formatting requirements, but all manuscripts must contain the required sections: Author Information, Abstract, Keywords, Introduction, Materials & Methods, Results, Conclusions, Figures and Tables with Captions, Funding Information, Author Contributions, Conflict of Interest and other Ethics Statements.". The restructuring of the manuscript will also help the authors to better express the novelty of their work and the contribution that they have made to the current state of knowledge. Consequently, the manuscript under review should be restructured as recommended by the Journal's Template and by the Journal's website.

Remark 3. Lines 9-22, the "Abstract" of the paper. In the "Abstract" of the paper, the authors must present in a clearer manner the following aspects: the background, the methods, the main findings, the conclusions, as in the actual form of the manuscript, the abstract offers information related only to some of these aspects and even so, their delimitation is unclear. In the "Abstract" of the paper, along with the above-mentioned elements, the authors should briefly state the novelty of their proposed approach.

Remark 4. Lines 27-78, the "Introduction" section – the literature review. In its current form, the "Introduction" section contains only 6 cited papers (a forthcoming one, the other ones being published in 2018, 2012, 2007, 1954 and 1952). I do not contradict the value of these papers, or their relevance in this context, but I consider that the literature review should be improved by performing a careful analysis of the cited works and by analyzing more other papers (especially recent ones). The authors must highlight exactly, for each of the involved referenced papers the main contribution that the authors of the referenced papers have brought to the current state of knowledge, the method used by the authors of the referenced papers, a brief presentation of the main obtained results and some limitations of the referenced article. By doing so, the problem will be put into context, and it will benefit the readers as well. The purpose of the literature survey is to highlight for each of the involved referenced papers the main contribution that the authors of the referenced papers have brought to the current state of knowledge, the methods used by the authors of the referenced papers, a brief presentation of the main obtained results and some limitations of the referenced article. This is the only way to contextualize the current state of the art in which the authors of the manuscript position their paper and address aspects that have not been tackled/solved yet by the existing studies from the body of knowledge in contrast with the manuscript under review.

Remark 5. Lines 27-78, the "Introduction" section. In the "Introduction" section, after having performed the appropriate review of the scientific articles/studies that tackle similar or related problems with the one of the manuscript, the authors must identify and state clearly in the manuscript a gap in the current state of knowledge that they intend to fill with their proposed approach. The same gap must also be tackled afterwards, in the "Discussion" section of the manuscript as well, where the authors should justify why their approach fills the identified gap in rapport with previous studies from the literature.

Remark 6. The "Materials and Methods" section is missing. It will benefit the manuscript if the authors include a "Materials and Methods" section (in the actual form of the manuscript this section is missing, being partially replaced by the sections "2. Soft-linking System Thinking with the GDynEP CGE model" and "3. Scenario design"), in which the new developed methods should be described in detail while well-established methods (and information) can be briefly described and appropriately cited. The authors must restructure their manuscript in order to devise a proper "Materials and Methods" section, eventually structured in subsections. In order to bring a benefit to the manuscript, the authors should state and justify very clear in the "Materials and Methods" section, preferably within the first paragraph, the choices they have made when developing the final form of their proposed approach. The authors should state what has justified using their approach, what is special, unexpected, or different in their research methodology. It will benefit if the authors mention if they have tried other approaches that in the end led them to the current form of their research design.

Remark 7. The "Materials and Methods" section – the flowchart. I appreciate the fact that the authors have inserted in their manuscript Figures 1 and 2 that contain "A simplified representation of the dynamics triggered by the EGD", respectively "A representation of the dynamics triggered by the EGD including COVID-19 pandemic". It will benefit the paper if, before these two figures, in order to help the readers better understand the methodology of the conducted study, in the "Materials and Methods" section, the authors would devise a flowchart that depicts the steps that they have processed in developing their research and most important of all, the final target. This flowchart will facilitate the understanding of the proposed approach and it will make the article more interesting to the reader if used as a graphical abstract. This diagram should be analyzed in detail within the manuscript by specifying all the elements needed for each and every step, in order to reach the final result of the study.

Remark 8. The "Materials and Methods" section – the detailed hardware and software configurations. In the "Materials and Methods" section, the authors should specify the detailed hardware and software configurations that they have used when developing their research, in order to provide all the necessary details for assuring the reproducibility of the study.

Remark 9. The "Discussion" section. In order to validate the usefulness of their research, in the "Discussion" section, the authors should make a comparison between their approach from the manuscript and other similar ones that have been developed in the literature for the same or related purposes. In the actual form of the manuscript, the "Discussion" section does not contain any reference in view of comparing to other studies, so the comparison is missing in the manuscript's current form. There are a lot of valuable studies in the scientific literature related to the subject of the manuscript to which the authors can compare to and this comparison will highlight even more the novel aspects that their paper brought in contrast to the existing studies. The authors should present the findings and their main implications in the "Discussion" section, also highlighting current limitations of their study, and briefly mention some precise directions that they intend to follow in their future research work.

Remark 10. The "Discussion" section. Can the authors mention how much of their research is being influenced by the used data/scenarios or to which extent the methodology used within the developed research can be easily applied to other situations, when the datasets/scenarios are different? In this way, the authors could highlight more the generalization capability of their approach in order to be able to justify a wider contribution that has been brought to the current state of art.

Remark 11. The "Discussion" section. At Lines 700-701, the authors state: "This work is a first attempt to identify and quantify the mechanisms driving selected objectives, such as environmental and fiscal sustainability, under various scenarios.". The authors state that their research targets the achieving of sustainability. Therefore, I consider that this statement must be further explained and detailed within the "Discussion" section. The authors must explain how the results of their research will help at the national level (or even at a local one) to achieve sustainable results. I consider that the paper will benefit if the authors make a step further, beyond their analysis and provide an insight at the end of the "Discussion" section regarding what they consider to be, based on the obtained results, the most important, appropriate and concrete actions that the decisional factors and all the involved parties should take in order to benefit from the results of the research conducted within the manuscript as to attain the ultimate goal of sustainability.

Remark 12. Issues regarding the acquired datasets. The authors must provide more details regarding the preprocessing approach that they have used and the way in which they intend to solve the problems related to missing data or abnormal values if they are to occur.

Remark 13. Issues regarding the format of the paper. The authors must take into account the recommendations from the Sustainability MDPI Journal's website regarding the format of the papers, by using the Microsoft Word template or LaTeX template to prepare their manuscript. In the actual form of the paper, a part of these recommendations has not been taken into account and therefore, the reading of the manuscript is affected, for example:

• The figures' captions. According to the Sustainability MDPI Journal's Template, the figures' captions should be placed under the figures, not above them.
• Lines 2-3, the title of the manuscript: "Modelling the EU sustainability transition: a soft-linking approach". Acronyms must be avoided in the title, even if they are widely known. In the case under discussion, the "EU" acronym should be explained the first time when it appears as "European Union". Regarding the other acronyms used in the manuscript, they should be explained the first time when they are introduced in the manuscript.
• Lines 432-434: "In this simulation exercise we are not able to define the exact way the policy support is designed in practical terms (e.g., a tax exemption, a fiscal subsidy, etc.)." In a scientific paper one should avoid using run-on expressions, such as "and so forth", "and so on" or "etc.". Therefore, instead of "etc.", the sentence should mention all the elements that are relevant to the manuscript.
• Lines 691-692: "[25Error! Bookmark not defined.]". Instead of the actual reference it is being displayed an error message.
• Figure 11 is not referred in the paper.

Author Response

Reviewer 1

Remark 1. The devised approach. I appreciate the fact that the authors have included in their analysis the effects of the COVID-19 pandemic crisis. However, I would like the authors to analyze in the "Discussion" section of the paper how their developed approach can be adjusted as to take into consideration other potential abnormal economic situations, such as financial crises, economic collapse, energy crises.

We have included a specific discussion in the Conclusion section (that is replacing the Discussion).

Remark 2. The sections of the manuscript. The manuscript under review will benefit if it is restructured in accordance with the Sustainability MDPI Journal's Template that provides a more logical structure that is much more appropriate for a research article. In addition to this, according to the "Instructions for Authors" from the Sustainability MDPI Journal's website (https://www.mdpi.com/journal/sustainability/instructions), "Sustainability now accepts free format submission: We do not have strict formatting requirements, but all manuscripts must contain the required sections: Author Information, Abstract, Keywords, Introduction, Materials & Methods, Results, Conclusions, Figures and Tables with Captions, Funding Information, Author Contributions, Conflict of Interest and other Ethics Statements.". The restructuring of the manuscript will also help the authors to better express the novelty of their work and the contribution that they have made to the current state of knowledge. Consequently, the manuscript under review should be restructured as recommended by the Journal's Template and by the Journal's website.

We have merged Sections 2 and 3 that are now Section 2: Methods and simulation setup. We have renamed last section as Conclusions.

Remark 3. Lines 9-22, the "Abstract" of the paper. In the "Abstract" of the paper, the authors must present in a clearer manner the following aspects: the background, the methods, the main findings, the conclusions, as in the actual form of the manuscript, the abstract offers information related only to some of these aspects and even so, their delimitation is unclear. In the "Abstract" of the paper, along with the above-mentioned elements, the authors should briefly state the novelty of their proposed approach.

We have rephrased the Abstract with the aforementioned elements better emphasised. We have also met the 200-word limit.

Background: The European Green Deal (EGD) is the most ambitious decarbonisation strategy currently envisaged, with a complex mix of different instruments aiming at improving the sustainability of the development patterns of the European Union in the next 30 years.

Methods: The intrinsic complexity brings key open questions on the cost and effectiveness of the strategy. In this paper we propose a novel methodological approach to soft-linking two modelling tools, a system thinking (ST) and a computable general equilibrium (CGE) model, in order to provide a broader ex-ante policy evaluation process. We use ST to highlight the main economic feedback loops the EGD strategy might trigger. We then quantify these loops with a scenario analysis developed in a dynamic CGE framework.

Findings: Our main finding is that such soft-linking approach allows discovering multiple channels and spillover effects across policy instruments that might help improving the policy mix design. Specifically, positive spillovers arise from the adoption of a revenue recycling mechanisms that ensures a strong support to the development and diffusion of clean energy technologies. Such spillover effects benefit not only the European Union (EU) market but also non-EU countries via trade-based technology transfer, with a net positive effect in terms of global emissions reduction.

Remark 4. Lines 27-78, the "Introduction" section – the literature review. In its current form, the "Introduction" section contains only 6 cited papers (a forthcoming one, the other ones being published in 2018, 2012, 2007, 1954 and 1952). I do not contradict the value of these papers, or their relevance in this context, but I consider that the literature review should be improved by performing a careful analysis of the cited works and by analyzing more other papers (especially recent ones). The authors must highlight exactly, for each of the involved referenced papers the main contribution that the authors of the referenced papers have brought to the current state of knowledge, the method used by the authors of the referenced papers, a brief presentation of the main obtained results and some limitations of the referenced article. By doing so, the problem will be put into context, and it will benefit the readers as well. The purpose of the literature survey is to highlight for each of the involved referenced papers the main contribution that the authors of the referenced papers have brought to the current state of knowledge, the methods used by the authors of the referenced papers, a brief presentation of the main obtained results and some limitations of the referenced article. This is the only way to contextualize the current state of the art in which the authors of the manuscript position their paper and address aspects that have not been tackled/solved yet by the existing studies from the body of knowledge in contrast with the manuscript under review.

We have added in the Introduction key references related to the analysis of complexity in policy mix design for environmental themes with qualitative and quantitative methods, emphasizing the gap in literature for an integrated approach.

Remark 5. Lines 27-78, the "Introduction" section. In the "Introduction" section, after having performed the appropriate review of the scientific articles/studies that tackle similar or related problems with the one of the manuscript, the authors must identify and state clearly in the manuscript a gap in the current state of knowledge that they intend to fill with their proposed approach. The same gap must also be tackled afterwards, in the "Discussion" section of the manuscript as well, where the authors should justify why their approach fills the identified gap in rapport with previous studies from the literature.

We have detailed this point in the text.

Remark 6. The "Materials and Methods" section is missing. It will benefit the manuscript if the authors include a "Materials and Methods" section (in the actual form of the manuscript this section is missing, being partially replaced by the sections "2. Soft-linking System Thinking with the GDynEP CGE model" and "3. Scenario design"), in which the new developed methods should be described in detail while well-established methods (and information) can be briefly described and appropriately cited. The authors must restructure their manuscript in order to devise a proper "Materials and Methods" section, eventually structured in subsections. In order to bring a benefit to the manuscript, the authors should state and justify very clear in the "Materials and Methods" section, preferably within the first paragraph, the choices they have made when developing the final form of their proposed approach. The authors should state what has justified using their approach, what is special, unexpected, or different in their research methodology. It will benefit if the authors mention if they have tried other approaches that in the end led them to the current form of their research design.

We have restructured the text and collected all modelling features into a single Materials and Methods section.

Remark 7. The "Materials and Methods" section – the flowchart. I appreciate the fact that the authors have inserted in their manuscript Figures 1 and 2 that contain "A simplified representation of the dynamics triggered by the EGD", respectively "A representation of the dynamics triggered by the EGD including COVID-19 pandemic". It will benefit the paper if, before these two figures, in order to help the readers better understand the methodology of the conducted study, in the "Materials and Methods" section, the authors would devise a flowchart that depicts the steps that they have processed in developing their research and most important of all, the final target. This flowchart will facilitate the understanding of the proposed approach and it will make the article more interesting to the reader if used as a graphical abstract. This diagram should be analyzed in detail within the manuscript by specifying all the elements needed for each and every step, in order to reach the final result of the study.

We have added a diagram and an explanation of the process followed to create the analysis presented in the paper.

Remark 8. The "Materials and Methods" section – the detailed hardware and software configurations. In the "Materials and Methods" section, the authors should specify the detailed hardware and software configurations that they have used when developing their research, in order to provide all the necessary details for assuring the reproducibility of the study.

We have mentioned this in the paper and provided a Supplementary material file for the CGE model.

Remark 9. The "Discussion" section. In order to validate the usefulness of their research, in the "Discussion" section, the authors should make a comparison between their approach from the manuscript and other similar ones that have been developed in the literature for the same or related purposes. In the actual form of the manuscript, the "Discussion" section does not contain any reference in view of comparing to other studies, so the comparison is missing in the manuscript's current form. There are a lot of valuable studies in the scientific literature related to the subject of the manuscript to which the authors can compare to and this comparison will highlight even more the novel aspects that their paper brought in contrast to the existing studies. The authors should present the findings and their main implications in the "Discussion" section, also highlighting current limitations of their study, and briefly mention some precise directions that they intend to follow in their future research work.

Remark 10. The "Discussion" section. Can the authors mention how much of their research is being influenced by the used data/scenarios or to which extent the methodology used within the developed research can be easily applied to other situations, when the datasets/scenarios are different? In this way, the authors could highlight more the generalization capability of their approach in order to be able to justify a wider contribution that has been brought to the current state of art.

We have added a paragraph on this point in the Discussion.

Remark 11. The "Discussion" section. At Lines 700-701, the authors state: "This work is a first attempt to identify and quantify the mechanisms driving selected objectives, such as environmental and fiscal sustainability, under various scenarios.". The authors state that their research targets the achieving of sustainability. Therefore, I consider that this statement must be further explained and detailed within the "Discussion" section. The authors must explain how the results of their research will help at the national level (or even at a local one) to achieve sustainable results. I consider that the paper will benefit if the authors make a step further, beyond their analysis and provide an insight at the end of the "Discussion" section regarding what they consider to be, based on the obtained results, the most important, appropriate and concrete actions that the decisional factors and all the involved parties should take in order to benefit from the results of the research conducted within the manuscript as to attain the ultimate goal of sustainability.

We have added a paragraph on this point in the Discussion.

Remark 12. Issues regarding the acquired datasets. The authors must provide more details regarding the preprocessing approach that they have used and the way in which they intend to solve the problems related to missing data or abnormal values if they are to occur.

All details are provided in the Supplementary material file.

Remark 13. Issues regarding the format of the paper. The authors must take into account the recommendations from the Sustainability MDPI Journal's website regarding the format of the papers, by using the Microsoft Word template or LaTeX template to prepare their manuscript. In the actual form of the paper, a part of these recommendations has not been taken into account and therefore, the reading of the manuscript is affected, for example:

• The figures' captions. According to the Sustainability MDPI Journal's Template, the figures' captions should be placed under the figures, not above them.

It has been corrected.

• Lines 2-3, the title of the manuscript: "Modelling the EU sustainability transition: a soft-linking approach". Acronyms must be avoided in the title, even if they are widely known. In the case under discussion, the "EU" acronym should be explained the first time when it appears as "European Union". Regarding the other acronyms used in the manuscript, they should be explained the first time when they are introduced in the manuscript.

It has been corrected.

• Lines 432-434: "In this simulation exercise we are not able to define the exact way the policy support is designed in practical terms (e.g., a tax exemption, a fiscal subsidy, etc.)." In a scientific paper one should avoid using run-on expressions, such as "and so forth", "and so on" or "etc.". Therefore, instead of "etc.", the sentence should mention all the elements that are relevant to the manuscript.

It has been corrected.

• Lines 691-692: "[25Error! Bookmark not defined.]". Instead of the actual reference it is being displayed an error message.

It has been corrected.

• Figure 11 is not referred in the paper.

We have included a reference when commenting.

Author Response File: Author Response.pdf

Reviewer 2 Report

The manuscript is very well written! However, please take into consideration following issues:

• Please do not use abbreviations in the keywords section
• Line 37: please indicate at least one source here
• Please do not begin sentences with abbreviations: e.g. line 59
• Please do not put abbreviations in titles - e.g. line 79
• Line 141: the EU28 does not exist anymore - now you please write: EU27+UK
• Please do not use abbreviations in captions - e.g. line 155
• Lines 156-163: please bring in source indications
• Page 10: when speaking about R&D stock investigations, please take into consideration also: https://www.mdpi.com/1996-1073/13/11/2743, https://www.mdpi.com/1996-1073/9/12/990, https://onlinelibrary.wiley.com/doi/abs/10.1002/wene.200
• Please insert a conclusions section

Author Response

Reviewer 2

• Please do not use abbreviations in the keywords section
• Done, thank you
• Line 37: please indicate at least one source here
• Done, thank you
• Please do not begin sentences with abbreviations: e.g. line 59
• Done, thank you
• Please do not put abbreviations in titles - e.g. line 79
• Done, thank you
• Line 141: the EU28 does not exist anymore - now you please write: EU27+UK
• Done, thank you
• Please do not use abbreviations in captions - e.g. line 155
• Done, thank you
• Lines 156-163: please bring in source indications
• Done, thank you
• Page 10: when speaking about R&D stock investigations, please take into consideration also: https://www.mdpi.com/1996-1073/13/11/2743, https://www.mdpi.com/1996-1073/9/12/990, https://onlinelibrary.wiley.com/doi/abs/10.1002/wene.200
• Done, thank you
• Please insert a conclusions section
• Done, thank you

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

I have reviewed the revised version of the Manuscript ID: sustainability-1236181, having the initial title "Modelling the EU sustainability transition: a soft-linking approach" and the revised title "Modelling the European Union sustainability transition: a soft-linking approach", and I can conclude that the authors have addressed the most important signaled issues, therefore improving the manuscript.

Reviewer 2 Report

All correction indications have been well implemented!