Integrated sustainability policy assessment – an agent-based ecological-economic model

The paper proposes an agent-based evolutionary ecological-economic model that captures the link between the economy and the ecosystem in a more inclusive way than standard economic optimization models do. We argue that an evolutionary approach is required to understand the integrated dynamics of both systems, i.e. micro–macro feedbacks. In the paper, we illustrate that claim by analyzing the non-triviality of finding a sustainability policy mix as a use case for such a coupled system. The model has three characteristics distinguishing it from traditional environmental and resource economic models: (1) it implements a multi-dimensional link between the economic and the ecological system, considering side effects of production, and thus combines the analyses of environmental and resource economics; (2) following literature from biology, it uses a discrete time approach for the biological resource allowing for the whole range of stability regimes instead of artificially stabilizing the system, and (3) it links this resource system to an evolving, agent-based economy (on the basis of a Nelson-Winter model) with bounded rational decision makers instead of the standard optimization model. The policy case illustrates the relevance of the proposed integrated assessment as it delivers some surprising results on the effects of combined and consecutively introduced policies that would go unnoticed in standard models.

This Is the Way the World Ends, Not With a Bang but Bonds and Bullets

This article explores instinctive frames of human decision-making in environmental and resource economics. Higher-moment asset pricing combines rational, mathematically informed economic reasoning with psychological and biological insights. Leptokurtic blindness and skewness preference combine in particularly challenging ways for carbon mitigation. At their worst, human heuristics may generate perverse decisions. Information uncertainty and the innate preference for bonds-and-bullets portfolios may impair responses to catastrophic climate change.

Kostenminimale Energieszenarien zur Erfüllung von Klimazielen: Ändert ein Hedging-Ansatz die ökonomischen Politikempfehlungen?

<p>Der letzte Sachstandsbericht des IPCC weist aus, dass das 2°-Ziel mit fortgesetztem Wirtschaftswachstum vereinbar ist und der global gemittelte kurzfristige Konsumverlust zur Finanzierung einer Energiewende 1% beträgt. Erste Arbeiten zum 1,5°-Ziel zeigen, dass die ökonomischen Aufwendungen signifikant höher ausfallen, sich jedoch noch in derselben Größenordnung bewegen dürften.</p> <p>Dieser Ergebnis-Komplex zu den Kosten einer Energiewende wurde mit Hilfe integrierter energie- und klimaökonomischer Modelle generiert, in dessen Folge hunderte von Energieszenarien ausgewertet wurden. Die meisten dieser Szenarien wurden ohne eine explizite Darstellung von Unsicherheit über wesentliche Eingangsparameter wie die Lernraten individueller Energietechnologien oder die Klimasensitivität erzeugt.  </p> <p>Im vorliegenden Beitrag wird beleuchtet, über welche Mechanismen eine explizite Berücksichtigung von Unsicherheit Politikempfehlungen verändert hat oder verändern könnte. Dabei wird insbesondere darauf eingegangen, dass das in Obigem implizit verwendete ökonomische Paradigma, unter Klimazielen nach kostenminimalen Lösungen zu fragen, der Verallgemeinerung bedarf, will man bei heutiger Investitionsplanung die Augen vor der Möglichkeit künftigen Lernens über unsichere Parameter nicht verschließen.</p> <p>In diesem Zuge wird ein eigener Ansatz (Held, 2019) vorgestellt und diskutiert, für welche Klasse von Fragestellungen die im jüngsten IPCC-Bericht zusammengefassten Energieszenarien robust unter Unsicherheit sind und für welche sich qualitativ andere Politikempfehlungen ergeben würden.</p> <p> </p> <p>Literatur:</p> <p>Held, Cost Risk Analysis – Dynamically Consistent Decision-Making under Climate Targets, Environmental and Resource Economics, 72 (1), 247-261, DOI 10.1007/s10640-018-0288-y, http://link.springer.com/article/10.1007/s10640-018-0288-y (2019).</p>

Introduction: special issue on the environment, resources and pollution – new challenges for economic development

This special issue contains a selection of six articles in the field of environmental and resource economics, which were presented in INFER workshops and supported events over the last two years. The topics include the effects of income inequality and freedom of the press on environmental stringency; the trade-environment nexus in China; the behavior of cross-country growth rates with respect to resource abundance and dependence; a stochastic frontier analysis to show that technological change is biased more towards energy rather than labor; how recycling and environmental taxes can affect the imbalances between the availability of and the demand for rare earth elements; and the interaction between demographic features and environmental constraints in Caribbean small island developing states. The papers include three empirical contributions and three methodological approaches, which help to improve our understanding of these topics.

Twenty Key Challenges in Environmental and Resource Economics

Economic and ecological systems are closely interlinked at a global and a regional level, offering a broad variety of important research topics in environmental and resource economics. The successful identification of key challenges for current and future research supports development of novel theories, empirical applications, and appropriate policy designs. It allows establishing a future-oriented research agenda whose ultimate goal is an efficient, equitable, and sustainable use of natural resources. Based on a normative foundation, the paper aims to identify fundamental topics, current trends, and major research gaps to motivate further development of academic work in the field.