The Potential Contributions of Mutually Consistent, Sectorally Disaggregated National Economic Models to Analyses of National Environmental Policies and Global Environmental Interdependence
Much of the contemporary concern for ’“structural change” in advanced economies has its origins in the significant changes in patterns of international trade which have occurred over the last two decades. While these changes in trade patterns are the joint consequences of developments in a number of interrelated dimensions (e.g., differentials in rates of technological innovation and diffusion and differential changes in relative factor prices, in rates of savings and capital formation, in the vintage of the capital stock and in primary materials and energy prices and availabilities), a growing emphasis in a number of countries on the environmental consequences of productive activities has constituted an important contributing factor, serving to discourage apparently “environmentally-adverse” (“ pollutionintensive”) production in some countries and to encourage the transfer of that production to countries in which environmental concerns are less intense (or impinge less severely on productive activity).
KeywordsChemical Oxygen Demand Environmental Service Exhaustible Resource Environmental Amenity Environmental Interdependence
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- 1.What is required here is freedom of movement of individuals both as consumers (of environmental amenities) and as factors of production (labor). The absence of barriers to international movements of capital as a factor of production is implicit in the assumption of a perfectly “open” economy, and corresponding stipulations concerning knowledge and technology are also implicit.Google Scholar
- 2.The general system, as just described, would be in the class described by James Buchanan’s “economic theory of clubs” and Charles Tiebout’s “pure theory of local government” (analysis of local governmental expenditure and taxation).Google Scholar
- 3.This problem would also be mitigated by free international migration, in that population (and capital) would leave jurisdictions pursuing inefficient environmental policies.Google Scholar
- 4.In fact, it would also be necessary to incorporate the time dimension, in that current productive activity will have implications for the global environment at subsequent points in time, and vice versa. Differently stated, optimality must be considered not only with reference to persons currently alive but also with reference to those who will be alive in the future. If all environmental externalities could be internalized, then this would not require a qualification of the above suggestion that market outcomes would constitute a global optimum, as discussed in the related context of exhaustible resources in Stephen P. Dresch, “Myopia, Emmetropia of Hypermetropia? Competitive Markets and Intertemporal Efficiency in the Utilization of Exhaustible Resources” [IIASA Working Paper, WP-84–48, June 1984 (revised September 1984)], forthcoming (in Russian translation) in J. Gvishiani and A. Wierzbicki, eds., Soviet Yearbook on Systems Research (Moscow: USSR Academy of Sciences and The State Committee on Science and Technology, 1985).Google Scholar
- 5.A substantial part of the blame for the earlier popular regard for these studies must, of course, be placed on members of the scientific community, who perceived benefits in the popular perception that scientific analysis could reach dramatic conclusions of immediate, practical import. Similarly, much of the credit for the declining popular appreciation of these efforts must be accorded to those members of the scientific community (most notably, Julian Simon and Herman Kahn) who refused to be “coopted” by the short-term benefits associated with these analytical excesses.Google Scholar
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