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Increased spatial dependency of economic activities, as well as spatial differentiation of production and consumption, has implications for environmental policy. One of the issues that has gained importance is the responsibility for the emissions from products that cross national boundaries during the environmental policy’s lifetime. This paper discusses the different ethical views of environmental responsibility. Furthermore, the policy measures that are associated with the different viewpoints are analyzed in a novel dynamic two-country two-sector dynamic input–output model. A numerical example is modeled to assess taxing schemes that are based on these ethical viewpoints. The results show that a tax on the ‘embodied’ environmental pressure, which is generally viewed as ethically preferable, is less effective that the current policy of taxing consumers of products. Our discussion however shows that these results are very dependent on the model structure and initial parameters that are used. Nevertheless, the model illustrates that policies that are based on ethically superior standpoints may have detrimental distortionary effects in the dynamic setting.
Keywords: Dynamic input–output model, international trade, technological change, environmental responsibility.
Most important environmental problems can be related to materials flows through the economy. Regional and national economies use materials that are either extracted domestically or imported from other regions. Therefore, an analysis of optimal patterns of combined economic development and materials use requires that both trade and environmental aspects are taken into account. A model is presented here that optimises long-term welfare for two regions that trade in virgin and recycled materials as well as consumer goods. The regions differ in one respect, namely with regard to domestic availability of a material resource. Analysis of the model shows, among other things, that the relationship between production and virgin material use can follow an Environmental Kuznets curves or an N-shaped curve. The latter points at “re-linking” of income growth and material resource use. Although trade of material resources and goods increases the carrying capacity of both regions, and in turn their levels of welfare, it can not prevent the re-linking phenomenon.
This paper presents a model-based analysis of the introduction of green products, which are products with low environmental impacts. Both consumers and firms are simulated as populations of agents who differ in their behavioural characteristics. Model experiments illustrate the influence of behavioural characteristics on the success of switching to green consumption. The model reproduces empirical observed stylised facts and shows the importance of social processing and status seeking in diffusion processes. The flexibility of firms to adapt to new technology is found to have an important influence on the type of consumers who change their consumption to green products in the early phase of the diffusion process. Keywords: Diffusion processes – Consumer behaviour – Social networks – Service economy
This paper presents a model-based analysis of the introduction of green products, which are products with low environmental impacts. Both consumers and firms are simulated as populations of agents who differ in their behavioural characteristics. Model experiments illustrate the influence of behavioural characteristics on the success of switching to green consumption. The model reproduces empirical observed stylised facts and shows the importance of social processing and status seeking in diffusion processes. The flexibility of firms to adapt to new technology is found to have an important influence on the type of consumers who change their consumption to green products in the early phase of the diffusion process.
Keywords: Diffusion processes – Consumer behaviour – Social networks – Service economy
Research in the field of “industrial metabolism” traditionally has been focused on measuring and describing physical flows of economic systems. The “metabolism” of economic systems, however, changes over time, and measuring material flows is insufficient to understand this process. Understanding the relation between economic activities and material flows can help to unravel the socio-economic causes of these physical flows. Three issues are addressed: The importance of spatial scales and trade flows, empirical analysis of relations between economic development and material flows, and treatment of behaviour of and interactions between stakeholders. For each of these issues, methods for analysis are suggested.
Keywords: industrial metabolismmaterial flowsstructural decomposition
Truck tyres can cause significant environmental pressure through the life cycle. The main aim of this paper is investigate to what extent international policy measures on foreign trade, international recycling and harmonisation of legislation can contribute in effectively reducing environmental pressure caused in the truck tyre life cycle. A two-region simulation model, representing Western and Eastern Europe, is developed that integrates the complete life cycle, incorporates environmental impacts in its economic analysis, is technically dynamic by accounting for learning-by-doing effects, and allows for variations in trade of new and old truck tyres. In this study the economic, environmental and social effectiveness of harmonisation and trade measures in the European life cycle for truck tyre is tested. Several conclusions can be drawn from the model simulations. First, the environmental effects caused by the trade of used tyres from Western to Eastern Europe are of limited impact on the overall environmental damage caused by truck tyres. The consumption stage is by far the main contributor to environmental damage. Within the marginal analysis of trade, harmonisation of disposal fees illustrated to generate very limited positive results. The private and external costs in the solid waste management (SWM) stage are too limited to have a notable impact on the overall configuration of the European tyre life cycle. The introduction of strict laws on tread depth in Eastern Europe has a much stronger impact on material flows than the harmonisation scenario. This suggests that domestic policy measures should be the primarily focus on interventions in this stage of the life cycle, for instance, by improving the management of tyre pressure. Because trade of used tyres has little impact on the consumption stage, this issue should not get priority in European environmental programs.
Keywords: International trade; Recycling; Environmental policy; Tyres; Europe
By evaluating tires from a perspective of industrial metabolism, potential novel and practical ways to reduce their environmental impact can be found. This may be achieved by focusing on technological issues such as choosing materials, designing products, and recovering materials, or by looking at institutional and social barriers and incentives such as opening waste markets or changing consumer behavior. A model is presented for the life cycle of truck tires in Western Europe that is dynamic in nature and values both environmental and economic consequences. Various scenarios are simulated including longer tire lifetimes, better maintenance of tire pressure, increased use of less-expensive Asian tires, and increased use of fuel efficiency-enhancing tires (“eco-tires”). Tentative results indicate that, among other things, more than 95% of the overall environmental impact during the life of a tire occurs during the use of the tire, due to the impact of tires on automotive fuel efficiency. Better maintenance of tire pressure and use of eco-tires produce greater environmental and economics benefits than more-durable and/or less-expensive (Asian) tires. These results imply that the emphasis in environmental policies related to tires should shift from the production and the waste stages to the consumption stage. It also suggests that the focus on materials throughput and associated improvements through factor 4 or factor 10 advances in reduction in mass are less important than the quality of the tires and their management.
The relationship between trade and material flows is examined by viewing the global economy from the perspective of international material-product chains (MPC). The international MPC covers the complete lifecycle of a material or a product in two or more regions, including extraction, production, consumption, waste management and transport. Products, waste, and associated material flows in the international MPC can run vertically or horizontally between segments. It is demonstrated how differences in factor requirements across segments of the international MPC in combination with factor productivity differences across developed and developing countries can cause specific trade patterns of inter-industry and intra-industry flows of materials and products. The implications of considering various trade theories in the context of the idea of an international MPC are examined. This interpretation of international trade sheds a new light especially on the physical dimension of international specialisation.
Keywords: International material-product chains; Trade theories; Environmental policy; Recycling.
A model framework, SIMBIOSES, is presented which describes economic activities and related material, substance and energy flows in a multi-region and multi-sector economic system. The conceptual design of the framework is discussed in relation to current issues on “dematerialization” and “decoupling”.
Three types of models to implement SIMBIOSES are discussed: a static equilibrium model, a dynamic optimisation model, and a system dynamics model. The static model determines the static equilibrium of extraction, production, recycling, and energy recovery from waste. The dynamic model determines the long-term investment decision that optimises total discounted utility of consumption. The dynamic model incorporates technological change, allocation of resources, and damage costs due to accumulation of substances in the environment. The system dynamic model generates endogenous economic growth and technology development and includes bounded rationality of economic agents.
Keywords: dematerialization, mass balance, integrated models, Environmental Kuznets curve, equilibrium analysis, dynamic optimisation, system dynamics.