Tuesday, November 16, 2010

Recent Papers of Interest in Ecological Economics:

van den Bergh, J. C. J. M., Environment versus growth — A criticism of “degrowth” and a plea for “a-growth”, Ecological Economics.

van den Bergh makes a much more extensive version of the main argument I made in my review of Tim Jackson's book Prosperity without Growth. There aren't policy levers that can directly stop growth and it might not be what is needed to solve environmental problems anyway. It makes much more sense to implement direct policies on resource use, environmental quality etc. van den Bergh calls this "a-growth". Forget about growth per se as well as de-growth as policy targets and aim at achieving the things we actually want to achieve.

Henriques, S. T. and A. Kander, The modest environmental relief resulting from the transition to a service economy, Ecological Economics.

This paper expands Kander's previous study of dematerialization in Sweden to a group of 13 countries. That article showed that it was an illusion that a shift to the service sector had helped dematerialize the economy. Rather rapid productivity gains in the industrial sector had both reduced energy use and the share of manufacturing in GDP due to the fall in the price of manufactured goods relative to services. The trend to rising service prices relative to manufacturing prices due to productivity gains in manufacturing is known as Baumol's disease. They explain the new study in the abstract:

"A service transition is supposed to lead to the decline of energy intensity (energy/GDP). We argue that this interpretation is overly optimistic because the shift to a service economy is somewhat of an illusion in terms of real production. Several recent studies of structural effects on energy intensity have made the error of using sector shares in current prices, combined with GDP in constant prices, which is inconsistent and ignores the different behaviour of prices across sectors. We use the more correct method of sector shares in constant prices, and make an attempt to single out the effect from the real service transition by using two complementary methods: shift share analyses in current and constant prices, and Logarithmic Mean Divisia Index (LMDI) for 10 developed and 3 emerging economies. A service transition is rather modest in real terms. The major driver of the decline in energy intensity rests within the manufacturing sector. Meanwhile, the transition to a service sector had a small downward impact on energy intensity in 7 of the developed countries (and no impact in the others). For emerging economies like Brazil, Mexico and India, it is the residential sector that drives energy intensity down because of the declining share of this sector as the formal economy grows, and as a consequence of switching to more efficient fuels."

No comments:

Post a Comment