Ecological Economics

Nature provides, free-of-charge

Most neoclassic economic models persist in considering that Nature gives us free-of-charge and that integrating material and energy flows inside the models remains of little interest, a typical exemple being the very low values held for elasticity between energy and GDP.

Contrary to these models, and following the work by Howard Odum and Nicholas Georgescu-Roegen, the approach based on Economic Ecology, places the flows of material and energy at the center of the economic processes. The approach is partially based on an analogy with mechanics and (mostly) thermodynamics.

The differences between these two visions of economic modeling seem irreconcilable, except for converting systematically the ecological sphere under a monetary form, which can be dramatically irrelevant.

Integrating the resources availability

With the prospect of being able to directly integrate the resources inside the model, we are developing a stock-flow type approach, which also involves the pinching effects inferred in particular by the weakness (or the absence) of the recycling process. The modelling hence considers the question of the flows of matter and energy as the center of the economic activity.

The proposed formalism stays very close to out-of-equilibrim thermodynamics and insists upon the temporal dimension, which puts rhythm into these flows, entailing not only quantitative, but also qualitative, sometimes harmful consequences. Besides, if the financial dimension is still present in the proposed model, it does not play the essential part, which remains defined by the resources availability, i.e. resources in energy, materials, capital and labor.

The project thus aims at endowing the various actors of the economic prospective with a tool allowing to estimate the effects of leverage inferred by an ecological economic approach, mostly governed by the resources in their physical features before their monetary dimension.

An ecological economic model

The project directly concerns the development of an ecological economic model including :

  • The question of the variation of availability of the resources
  • The question of the recycling rate of the resources
  • The question of the intensity of use of the resources
  • The coupling between the ecological and the economic sphere
  • The question of the quantity just as much as that of the quality

Each of the resources can appear with abundance or rarity. Furthermore, the intensity of use of these resources, that is the rate at which they are consumed in the economic process, is not without consequence on the quality of the use.

Pdf presentation: http://science-and-energy.org/wp-content/uploads/2016/03/Les-Houches-10-mars-2016-FINAL1.pdf

Participants

Christophe Goupil, Eric Herbert, Yves D’Angelo, Gaël Giraud