Doctoral Program and Advanced Degree in Sustainable Energy Systems
Doctoral Program in Mechanical Engineering
Doctoral Program in Environmental Engineering
Ecological Economics
Lecture 2
Tiago Domingos
Assistant Professor
Environment and Energy Section
Department of Mechanical Engineering
Ecological Economics vs.
Environmental and Natural Resource Economics
• Ecological Economics
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The basis is the environment/ecosystems
Ecocentric
“Top-down”, Pro-active
Ecology and Economics
• Environmental Economics
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Interaction between environment and economics
Anthropocentric
“Bottom-up”, Reactive
“Just” Economics
Intrinsic vs. Existence Value
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Choice and knowledge
Compensation
Risk vs. Certainty
Economic vs. Intrinsic value
Syllabus I
• Scale (ecology), distribution (ethics), efficiency
(economics), constraints (thermodynamics)
• Formal analogy
– Microeconomics and thermodynamics
– Biophysical valuation
– Industrial ecology, industrial metabolism
• Substantive integration
– Thermodynamics and ecology: DEB
– Thermodynamics and economics: Ayres
• Epistemology and sociology of science
• Ethics and welfare
• Static vs. intertemporal optimisation
– Lagrangian multipliers
– Maximum principle
Syllabus II
• Microeconomics
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Review of consumer theory
Review of producer theory
Review of market structures
Game theory
Evolutionary and institutional economics
• Pollution economics; pollution control instruments
Market Equilibria and Externalities
MSC
MPC
Social
optimum
Market
equilibrium
MPB
y
Syllabus III
• Ecological and economic networks
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Life Cycle Analysis
Input-Output Analysis
Computable General Equilibrium Models
Indicators of environmental responsibility
• Economic valuation methods
• Intertemporal choice and uncertainty
– Discount rate
– Cost-benefit analysis;
Syllabus IV
• Sustainable development
– Weak vs. strong sustainability
– Economic growth theory
• Neoclassical and endogenous
• Ayres
– Economic theory of sustainable development
– Biophysical and other indicators of sustainable development
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Index of sustainable economic welfare
Ecological footprint
Human Appropriation of Net Primary Production
EcoIndicator95, EcoIndicator99
– Environmental Kuznets hypothesis
Next Lecture
• ASSIGNMENTS
– Chapter 3, problem 5
– Chapter 15, problem 1, 2
• READINGS: Varian, Intermediate Microeconomics
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Choice: chapter 5 (appendix)
Demand: chapter 6 (appendix)
Market demand: chapter 15
Equilibrium: chapter 16
Producer theory: chapters 17, 18, 19, 20, 21, 22