Johannes Schiller

Technical Change and the Environment

An approach towards modelling long-term behaviour of production systems

40 Seiten · 4,19 EUR
(Februar 2007)

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Aus der Einleitung:

Environmental problems are induced at the interface of economic and ecological systems. Hence, their temporal development is influenced by the dynamics of both kinds of systems and by their interaction. It is obvious that economic systems influence ecological systems, for example by the emission of joint products from production systems. But environmental changes, often experienced as environmental problems, may also have strong influence on the temporal development of economic systems. This influence may be direct, for example by increasing scarcity or deterioration of natural resources needed for production and by the decreasing capacity of the environment as sink for unwanted joint products. It may also be transmitted indirectly, for example via the imposition of environmental regulations.

The purpose of this paper is to discuss existing economic modelling approaches with respect to long-term dynamic modelling and, at the example of a case study, to develop a framework for the modelling of production systems, which can be used as benchmark to understand intertemporal and long-term interactions of production systems, the natural environment and socio-political systems. The ultimate goal of such a benchmark is to investigate the long-term implications of environmental policy.

In the first part of the paper, we compare the modelling approach towards long-term development of economic systems taken by traditional economic theory to that taken by evolutionary economics and discuss gains and losses of the underlying paradigm shift. In the second part of the paper, we illustrate the above mentioned interactions between economic systems and the environment at the example of the history of soda and chlorine industry in the 19th century. We investigate the way in which environmental damages are created by production activities, how these environmental problems then lead to the introduction of external restrictions on the development of the production system, and, finally, we investigate how this triggers off technical change. The internal factor determining the dynamics of the production system is the accumulation and de-accumulation of capital stocks.

Based on the theoretical considerations of part one and the empirical background outlined in part two, in the last part of the paper, we develop a modelling approach addressing the dynamic behaviour of the production system introduced in the case study. There are two central determinants of the dynamics of our model system, which are the accumulation of stocks of capital and technical change. Regarding the former we use elements of neo-Austrian capital theory, the latter deals with a largely deterministic approach. There is no longterm intertemporal optimisation in the model; in that respect it is evolutionary. Environmental restrictions are exogenous to the model, i.e. the dynamic behaviour of the environmental and the sociopolitical systems is not modelled.