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I would fully agree with Mat's
remarks. A major
contributor to this fundamental uncertainty is the
tendency to all kinds of nonlinear complex
dynamics
that can occur in combined ecologic-economic
systems.
(Are many of you surprised to hear me say this?
:-))
I also fully agree that this plays to the need to take
very
seriously the precautionary principle.
An example of such nonlinearity
with respect to
the global warming issue involves the positive
feedback
system of albedo, or reflectivity off snow and ice
surfaces.
As it gets colder, more snow and ice lead to greater
reflection
of solar energy and thus positively feed into greater
cooling.
A warming trend, such as we have now, runs into the
same
effect, but in reverse. The upshot is a potential local
instability
of the system that implies the possibility of rather sudden
in
geological time scales changes in global temperature. In
fact,
the historical record appears to support the idea that the
movements in and out of ice ages occurred quite suddenly,
and
such a mechanism may well have played a crucial
role.
I have written a rather large amount
on this and related
topics. The most recent and most widely cited such piece
by
me is "Complex ecologic-economic dynamics and
environmental
policy," Ecological Economics, April 2001, vol. 37, no. 1, pp.
23-37.
One can find a version of it without the figures on my
website, listed
below. If you want the full version and do not have
access to the
journal, I can send you a reprint. I have some other related
papers
on my website as well.
Barkley Rosser
----- Original Message -----
Sent: Tuesday, January 22, 2002 1:52
PM
Subject: Re: post keynesian economics and
environmetal sustainablity
Uncertainty is
emphasized by many in environmental policy, and the connections to PK emphasis on same is clear, and has been
pointed out by some. Some of the
best work on uncertainty in environmental policy is by Funtowicz and Ravetz,
and they (or maybe Ravetz by himself) had an article in the JPKE on “Economics
as a Folk Science”. The
literature on the “precautionary principle” in environmental policy is mostly
due to uncertainty. We don’t KNOW
that global climate change or ozone depletion or whatever will happen to such
and such a degree by a certain date and that if so it will have such and such
effects, but we don’t KNOW that it won’t either. So the precautionary principle says we
should be cautious in the face of uncertainty—better to err on the side of
caution when it comes to life, health, environment.
Stephen Marglin has an essay some years back where he talked about
uncertainty in environmental and uncertainty in Keynes, and he said that in
Keynes, investors are uncertain but we need action in the face of uncertainty
(animal spirits), ‘otherwise there would not be much investment’ just based on
cold calculation. But in the case of environmental uncertainties we don’t want
action in the face of uncertainty, but caution.
mat
-----Original
Message-----
From:
RHolt1234@xxxxxxx [mailto:RHolt1234@xxxxxxx]
Sent: Monday, January 21, 2002 5:01
PM
To:
pkt@xxxxxxxxxxxxxxxx
Subject:
post keynesian economics and environmetal sustainablity
Hopefully in the near future Bill
Mitchell, Mat Forstater and I will start on a project of editing a volume on
Post Keynesian economics and the environment. Thinking a little bit about the
project let me throw out a basic issue to see how some of you will respond. A
primary issue in environmental economics has to do with long-run
sustainability. Using a very simple model of comparing marginal abatement
costs with marginal damages to determine a socially efficient level of
emissions of a pollutant assumes that all costs are estimated. A criticism
given is that such a model has a tendencyto put more weight on costs and
benefits for present generations compared to future generations. This would
not be a problem if all resources were renewable and pollutants noncumulative,
but as we know this is not the case. The neoclassical response is that through
discounting we can come up with an estimated value of the marginal abatement
cost and the marginal damage functions that takes into consideration all costs
in the short-run and the long-run associated with pollution. But this analysis
is based on an ergodic system. If we accept a non-ergodic system – a future
that is uncertain how do we evaluate all future costs associated with
pollution and carry out a policyof sustainability?
-Ric
Holt
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