Changing Stocks, Flows and Behaviors in Industrial Ecosystems

Changing Stocks, Flows and Behaviors in Industrial Ecosystems
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The contributors to this book offer methodologies for such descriptions. The systematic connection between insights from engineering, ecological, behavioral and organization theories makes the insights policy-relevant. The authors combine an impressive knowledge of innovative concepts and modeling techniques with data on real-world industrial ecosystems.

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Description Table of Contents Product Details Click on the cover image above to read some pages of this book! Industry Reviews 'This volume offers the state-of-the-art in dynamic modeling of the functioning of firms in industrial ecosystems. List of figures List of tables Foreword List of abbreviations Background and concepts: an introduction p. All Rights Reserved.

Changing Stocks, Flows and Behaviors in Industrial Ecosystems

In Stock. Not for Greens. Higher incomes have been accompanied by better health, education, longevity, environmental amenity particularly in advanced economies , and reductions in working hours and absolute poverty. Average world GDP per capita is currently around eleven times that of , while the world population has grown nearly sixfold.

While the Maddison dataset suggests increasing wellbeing over time, there have been periods where the wellbeing of successor generations has decreased. For example, wellbeing in Europe declined between the first and tenth centuries, following the fall of the Western Roman Empire.

Looking forward, it cannot simply be taken for granted that the current growth in living standards can be maintained for future generations. The current economic turmoil in Europe risks creating persistent negative impacts on the wellbeing of some European countries that could be felt on a generational timescale. Productivity growth in developed economies has also been undergoing a decline since the s; potentially reducing the momentum that has driven increasing living standards in recent times TED For the first time in history, we are affecting our natural environment on a global scale, and the consequences of climate change are another potential source of long-lived declines in wellbeing.

Thus, we cannot be sure that future generations will be better off.


In the broadest sense, sustainability refers to the problem of allocating scarce resources over the very long term. However, beyond this basic idea, there is little common understanding and much confusion of what sustainability means and what it requires in practice, including how it should be measured and how to develop policies consistent with the concept. By the late s, John Pezzey felt that sustainability definitions could readily be counted in the thousands Pezzey Such confusion can be resolved by applying the broadest concept of progress, namely wellbeing. This results in an overarching definition that is consistent with the literature and encompasses the range of narrower sustainability definitions already in circulation. Sustainability refers to maintaining or increasing this wellbeing across generations. It depends on whether stocks of capital that matter for our lives are passed on to future generations, including:.

Thus the wellbeing of future generations depends on the flow derived from stocks passed on to them. Some of the confusion surrounding sustainability arises from efforts to combine current wellbeing, environmental and sustainability concepts, such as in green growth and green GDP measures. Chart 2. The relationship between possible economic paths, sustainability and intergenerational equity. A definition of sustainability as maintaining wellbeing across generations does not always coincide with intergenerational equity , which is commonly interpreted as meaning that resources are allocated across generations so that the wellbeing of each is equal.

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Different development paths can therefore be described as survivable, sustainable or equitable, as shown in Chart 2. A path of constant wellbeing defines the minimum sustainable path E, which is also equitable. This may be different to the subsistence level G, another equitable path below which there are insufficient resources to survive. Development paths with rising wellbeing across generations, such as paths B or C, would be classed as sustainable but not strictly equitable.

Bibliographic Information

Sustainable paths with the highest wellbeing overall are preferred for example path B. Paths A, D, F and H are neither equitable nor sustainable, because wellbeing is neither constant nor rising continuously. In seeking to improve and maintain wellbeing, trade-offs may be necessary between or within environmental, social, human and economic stocks. Weak sustainability at its most basic applies when all the different forms of capital are completely substitutable. In this case, wellbeing can increase or be maintained so long as depletion of one type of capital is at least offset by increases in the other types.

By contrast, strong sustainability applies when there is no substitutability between the different types of capital. This implies that each form of capital must at least be maintained to ensure that future wellbeing does not decrease. Since we live in a world where some stocks are substitutable and others are not, the relevant policy prescription lies somewhere between these two extremes.

Although relevant to all stocks, substitutability has been linked in particular to environmental stocks as an argument for strong sustainability. Environmental stocks such as plants and animals are argued to have limited substitutability — because their loss is irreversible or they are c ritical for human survival — requiring that they are preserved in their entirety. However, wellbeing could conceivably be maintained or even increase following irreversible loss of some stocks, or parts of stocks, provided the accompanying benefits of a trade-off at least offset the environmental losses.

This depends on the relative contribution to current and future wellbeing of the stocks in question, the quantities involved and whether the loss is irreversible. A stock or part of a stock is not substitutable when the negative impacts on wellbeing from its irreversible loss cannot be compensated for. Appropriate quantities of environmental stocks needed to sustain human life such as a supply of breathable air, drinkable water and conditions for growing food such as soil quality and climate provide a critical contribution to wellbeing.

Certain amounts of trust and freedom social stocks , and minimum amounts of health and knowledge human stocks , are also critical for human survival, and once lost, cannot be readily regained. There is a strong justification for ongoing protection of appropriate quantities of such stocks. Determining these quantities depends on threshold effects.

Ecosystem Change

At this size, the stock is vulnerable to unforeseen events such as natural disaster reducing it below the threshold. Similarly, once trust is reduced below some critical point, society would cease to function. If a stock is not substitutable beyond some threshold, the appropriate risk-management response is to maintain the stock above that threshold, with a sufficient buffer to minimise vulnerability. Damage to some stocks can be reversible and, depending on the costs and times involved, may increase the likelihood that a trade-off involving damage would be chosen.

For example, loss of habitat or pollution of a waterway could be rehabilitated over time. Maintaining or improving wellbeing over generations should therefore involve applying weak sustainability where possible, and strong sustainability for stocks, or parts of stocks, that are not substitutable. To make effective trade-offs, information on the relative contributions to wellbeing of alternate courses of action is needed. However, this information is often not available or incomplete. Current experience regarding fundamental determinants of wellbeing can serve as a guide to stocks that are likely to not be substitutable below a certain point — for example basic freedoms and education, supplies of breathable air, drinkable water and food.

Beyond this, identification of thresholds and reversibility of damage will be important in improving our ability to make such judgements in the face of uncertainty. Here consumption can include enjoying the existence of stocks without necessarily using them, for example freedom of speech or a national park.

It is assumed that the wellbeing of a generation is the summed wellbeing of all the individuals in that generation. It is natural to want to consider the wellbeing of different generations as having equal weight.

The Ability to Experiment

However, adding the wellbeing of an infinitely long stream of different generations would result in an infinite sum. To make the optimisation tractable, the wellbeing of different generations is typically weighted by the discount factor. For hypothetical economies with only depletable stocks, such as mineral resources, no golden rule could exist because there is no reproducible capital, and the optimal path if it exists tends to result in declining consumption per capita.

Because this approach hereafter referred to as the Ramsey optimising approach selects the greatest sum of wellbeing across generations, the wellbeing of one generation can be traded off against that of another, so long as the loss to some generations is outweighed by gains to other generations.

Since the worst off generation is allowed to exist at any point in time, optimal growth can result in future generations being relatively worse off than current generations, as illustrated by paths D, F and H in Chart 2.

Edited by Matthias Ruth and Brynhildur Davidsdottir

'This volume offers the state-of-the-art in dynamic modeling of the functioning of firms in industrial ecosystems. The systematic connection between insights from. Changing Stocks, Flows and Behaviors in Industrial Ecosystems edited by Matthias Ruth and Brynhildur Davidsdottir The Dynamics of Regions.

Sustainability is not necessarily implied by optimality. Although Rawls did not explore this concept in relation to intergenerational questions, Kenneth Arrow Arrow , Robert Solow Solow 4 and many others have, arguing that under a similar veil of ignorance, an individual would choose to ensure that the welfare of the least well off generation was maximised. Here the implication is that the consumption of all but the worst-off generation should be reduced to benefit that generation; the optimisation is sensitive only to the wellbeing of the poorest generation.

This approach will be pro-future if the future is relatively poor, and pro-present if the present is relatively poor. While inequality between generations is allowed under maximin as long as the wellbeing of the poorest generation is improved, this approach has been used to argue that the fairest outcome is when wellbeing or consumption of all generations is equal, but at the maximum feasible level, for example path E in Chart 2.

Solow showed that, for a hypothetical, fully substitutable economy with both renewable and depletable resources and ignoring trade , achieving constant consumption requires that the total capital stock is maintained — in other words zero net saving — in cases where technology is constant, and negative net saving when technology is growing Solow In the latter case, it is assumed that growing technology will create more capital in the future, such that future generations will be sufficiently compensated for a reduction in aggregate stocks today. However, this approach does have some undesirable properties, including that an initially poor economy would be locked into maintaining low levels of wellbeing.

Graciela Chichilnisky sought to generalise the Ramsey optimising approach so that neither current nor future generations are preferred, by maximising Chichilnisky :. The second term favours the path with the highest wellbeing level in distant periods. The two approaches are weighted through , determining which approach dominates.