Contemporary economics and contraindications for climate maladies: lessons from environmental macroeconomics

Dodo J. Thampapillai and Matthias Ruth

Chapter 7 in A Research Agenda for Environmental Economics, 2020, pp 106-121 from Edward Elgar Publishing

Abstract: This chapter provides an alternative basis for analysing economic growth and the consequent perpetuation of climate malaise. The contention herein is that the effectiveness of approaches based on standard neoclassical frameworks of production and factor utilization, regardless of their integration with scientific and related information, is likely to be constrained. This chapter considers a simple expansion of the standard depiction of production processes to illustrate that, even within the confines of traditional methods, mainstream recommendations to address climate change perpetuate rather than get to the root causes of the problem. Specifically, we integrate insights from the laws of thermodynamics and ecological resilience in a production function for macroeconomics to explicitly include the stock of environmental capital (KN) as an argument alongside manufactured capital (KM) and labour (L). Being distinct from the production functions that underlie the work of Nobel Prize-winning economists such as William Nordhaus and Paul Romer, whose work is firmly rooted in the notion that technological change and economic growth will solve the very problems they generate, our basic model yields quite different results. For example, extending the reformulated production function to the context of the Romer model suggests clear possibilities of the need for de-growth in selected economies. Furthermore, the Nordhausian claims of “optimal pollution†and “optimal climate change†could constitute a contraindication. If the term “optimality†must be used at all, then the optimal quantity is zero pollution, which is physically impossible, and zero climate change – which for biogeophysical reasons will not happen either.

Keywords: Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781789900040/9781789900040.00011.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:18903_7

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().