1 / 16

Ecological Economics

Doctoral Program in Climate Change and Sustainable Development Policies Doctoral Program and Advanced Degree in Sustainable Energy Systems Doctoral Program in Mechanical Engineering Doctoral Program in Environmental Engineering. Ecological Economics.

juro
Download Presentation

Ecological Economics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Doctoral Program in Climate Change and Sustainable Development PoliciesDoctoral Program and Advanced Degree in Sustainable Energy SystemsDoctoral Program in Mechanical EngineeringDoctoral Program in Environmental Engineering Ecological Economics Tiago DomingosAssistant ProfessorEnvironment and Energy SectionDepartment of Mechanical Engineering

  2. Multisector Optimal Growth m-dimensional consumption bundle, including everything that influences well-being. Includes all non-market commodities, e.g, produced at home, environmental services, … n-dimensional capital vector: Includes man-made capital, natural resources, human capital (education and knowledge) and foreign capital. Time is included as a capital, to depict technological progress in production. Attainable production possibilities The model s.t.

  3. Criteria for Sustainability, Pezzey (2004) EDE An economy is sustainable at time t if and only if the representative agent’s current utility does not exceed the maximum level of utility which can be sustained forever from t onwards. One-sided sustainability test: un-sustainable development. Multisector results in real terms. Real Net Income, Genuine Saving, Investment Consumption Variation in Real Net Income Variation in Welfare

  4. Welfare Relationships • Both Genuine Savings and Green NNI are related to future consumption. • These relationships can be used to empirically check the theory. • If genuine saving is negative (or green NNI deacreases) then current consumption will decrease in the future.

  5. Small Open Economy Include stocks of commercial forests, welfare costs of air emissions, The capital stocks are : Domestic man-made capital, Net foreign capital held privately or by the government, Stock of commercial natural resources Production r – interest rate

  6. Small Open Economy Households’ utility function depends on material consumption rate and (negatively) on the flow of emissions The vector of emissions depends on production and abatement expenditure. Maximize welfare subject to the above relations and having as controls consumption, , all forms of extraction, , abatement expenditure and trade balance . Conventional (SNA) NNI: Green Net National Income: Genuine Saving (Adjusted Net Saving):

  7. Small Open Economy – Table of symbols Consumption rate at time t Net foreign capital Man-made capital, Utility Rate of emissions of air pollutants Marginal cost of abatement = Marginal damage cost Production function Abatement expenditure Extraction of natural resources for domestic use, exports and from imports. Imports - Exports Constant nominal interest rate Stock of resources Constant real interest rate Resource price Cost of extraction of resource Marginal cost of abatement

  8. Small Open Economy Starting from conventional SNA aggregates: Deduct the damage from flow pollution emissions, Deduct (add) the value of rents from resource depletion (or not),

  9. Constant MDC Social costs vs Marginal abatement • Models point to measure emissions at the • Marginal cost of abatement (MCA), or • Marginal social cost (MSC) = Marginal benefit of abatement (MBA), a.k.a. Marginal Damage Costs (MDC) • Measurement away from the optimum • c, over-polluting (assumed current state) => a is upper bound • d, under-polluting => b is lower bound

  10. GNNI and GS in Portugal – Air Emissions How to value a unit of emissions? Marginal benefit of avoided emission, Marginal cost of emission (MDC), or Marginal abatement costs? Marginal cost of emission per emitted pollutant [€2000/ton]:

  11. GNNI and GS in Portugal – Air Emissions

  12. GNNI and GS in Portugal – Forests National Forest Inventory 2005/06 Average Volumes: 95/98 05/06 [m3/ha] 88.5 82.5 Conifers 55 55 Eucalyptus

  13. GNNI and GS in Portugal – Forests The depreciation of commercial forests in Portugal is on average 10% of the contribution of forestry to national product (around 4%).

  14. GS in Portugal Without the value of time – Decreasing tendency throughout the period and negative GS after 2002. With the value of time – Decreasing tendency until 2001, but GS are always positive.

  15. Sustainability Message • In 1993, SO2 costs of emissions, which represent around 30% of total emission costs, decreased substantially. Increases welfare but does not counteract the loss of production.

  16. What’s Missing? The depletion of water resources. The depletion of biodiversity. Depletion of stocks of fish. Inclusion of the value of ecosystem services. Soil quality. Distributional issues (intragenerational concerns). ...

More Related