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Erschienen in:
Introduction Kapitel lesen Erstes Kapitel lesen

2017 | OriginalPaper | Buchkapitel

4. Formalizing Triple Reproductions and Environmental Costs

verfasst von : Kazuhiro Okuma

Erschienen in: The Evolving Relationship between Economy and Environment

Verlag: Springer Singapore

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Abstract

This chapter mathematically formalizes the concepts shown in Chap. 3 in order to obtain a clearer understanding and to enable quantitative analyses based thereon. First, we present the concept of triple reproductions as a three-dimensional equation of distribution among profit, wage, and rent. The natural capital of public goods is used without receiving rents and is depreciated. This depreciation can be regarded as a negative distribution to future generations, which corresponds to the latent environmental costs.
Second, we present a methodology to identify and capture the costs of environmental measures in the context of economic transactions. Then, under some assumptions, we incorporate the cost of environmental measures into the three-dimensional equation of distribution as an element parallel to rent.
By locating environmental costs in the macro economy as above, it becomes possible to use them as quantitative indices with clear definitions, and to conduct analyses on economy and the environment by incorporating them into economic models.

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Vorheriges Kapitel Socioeconomic System as Reproductions of Economy, Humans, and the Environment
Nächstes Kapitel Institutional Coordination in the Economy-Environment Nexus and the Growth Regime
Fußnoten
1
This denotes the amount of the earth’s source and sink functions consumed in the production process. Its measurement is an important subject of environmental studies, and some indicators have been proposed, such as the Ecological Footprint and the Material Flow Accounts, though accurate measurements are not possible yet.
 
2
The rent rate is defined as total amount of rents divided by the total amount of consumption of environmental resources (N).
 
3
An expression of the economy in three-dimensional space with an environmental axis was previously shown by Hosoda (1994). He incorporated emission charge on waste (i.e., price of emission rights) to a growth model based on Sraffian tradition and described long-term equilibrium as a wage–profit–emission-charge surface in three-dimensional space.
 
4
Under this assumption, the equation showing effective demand is I = s r Π where I is investment and Π is profit.By dividing both members by K, we obtain the Cambridge equation (Lavoie 2004).
 
5
This definition is made by referring to the concept of vertical integration (Pasinetti 1973). However, investment is not transformed into annual intermediate input and is thus not vertically integrated in order to keep the model empirically traceable.
 
6
Georgescu-Roegen (1971) suggested that, according to the analytical view of a process, each process of the I-O table should be associated with one product and diagonal boxes should be empty.
 
7
The idea of a social accounting matrix (SAM) with import included in the output is shown in Taylor (2004).
 
8
We note that this model assumes that capital and labor are not mutually substitutable and that environmental resources are substitutable by them. This is justified by our focus on the intentional substitution of environmental resources under institutional coordination.
 
9
SEEA emphasizes the importance of specifying and disaggregating ancillary activities within a company and presents methodologies for it (United Nations et al. 2003).
 
10
Let us give brief consideration to the relative price of ESGSs and other products. If we assume production factors are utilized in the same proportion between these sectors (i.e., K p  : L p  : N p  = K e  : L e  : N e ), we have p e /p = Y/(Y + E). Here, in the current economy, E ≪ Y. Therefore, we can understand that p e /p ≈ 1. With this understood, we proceed with the analysis using the one-sector model.
 
Literatur
Baranzini M, Scazzieri R (1996) Profit and rent in a model of capital accumulation and structural dynamics. In: Arestis P, Palma G, Sawyer M (eds) Capital controversy, post-Keynesian economics and the history of economic thought. Routlege, London, pp 121–132
Georgescu-Roegen N (1971) The entropy law and the economic process. Harvard University Press, CambridgeCrossRef
Hosoda E (1994) Growth and distribution under an environmental restriction. Manch Sch Econ Soc Stud 62(1):60–80CrossRef
Lavoie M (2004) L’économie postkeynésienne. La Découverte, Paris
Okuma K (2012) An analytical framework for the relationship between environmental measures and economic growth based on the régulation theory: key concepts and a simple model. EIER 9(1):141–168
Pasinetti LL (1962) The rate of profit and income distribution in relation to the rate of economic growth. Rev Econ Stud 29:267–279CrossRef
Pasinetti LL (1973) The notion of vertical integration in economic analysis. Metroeconomica 25:1–29CrossRef
Taylor L (2004) Reconstructing macroeconomics. Harvard University Press, Cambridge
United Nations (1993) Integrated environmental and economic accounting: interim version. United Nations, New York
Metadaten
Titel
Formalizing Triple Reproductions and Environmental Costs
verfasst von
Kazuhiro Okuma
Copyright-Jahr
2017
Verlag
Springer Singapore
Buch
The Evolving Relationship between Economy and Environment

Print ISBN: 978-981-10-4099-3

Electronic ISBN: 978-981-10-4100-6

Copyright-Jahr: 2017

DOI
https://doi.org/10.1007/978-981-10-4100-6_4