Econ 326: Ecological Economics
Course programme and readings
Winter 2015
Tues. 2:30-5:30
BartonBldg. 1-015
Macdonald Campus
Prof. Thomas Naylor:
Department of Economics
Leacock Bldg 321D Downtown Campus
Prof. Nicolas Kosoy:
McGill School of Environment and Department of Natural Resource Sciences
Macdonald Stewart Building, MS2-079 Macdonald Campus
Note: for all administrative and similar issues, students address themselves to Professor Naylor;
for questions re course content and further instruction, both instructors are happy to oblige.
Academic Integrity: All students are required to understand the meaning and consequences of cheating, plagarism and other academic offenses under the Code of Student Conduct and Disciplinary Procedures.
PREREQUISITES:Six credits of university levelintroductory economics, both micro and macro concepts. Students lacking that backgroundmayrequest exemption from the instructor(s)at the start of class, but it is rarely granted.Some recommended (but not required) additional courses would be Environment 200, 201, or 202. Students lacking a background in environmentcangrasp some basic conceptsfrom any introductory book on biophysicalecology.
Rationale: Ecological economics(also known as biophysical economics) studies the conflict between the expanding scale(and the resulting material-and-energy intensity)of the global economy on one side and its negative impact on the biophysical environment on the other.Among the symptoms are: world-wide climate disruption because of radiation entrapment, depletion of the ozone layer that protects terrestial life from dangerous UV exposure, biodiversity loss that destroys food webs and weakens surviving species, the spread of persistent organic pollutants that can be toxic, carcinogenic, mutagenic, and disruptive of endocrine systems, along with the evolution of superpests that now resist human control technologies. The response has been far too often to rely on the same methods, institutions, and especially mindsets- simply applied more intensely - that caused the “problem” to begin with.The contrary view, taken in ths course, can be summed up by a frequently misquoted observation from Albert Einstein: “No problem can be solved from the same level of consciousness that created it. You must learn to see the world anew.”
Ecological (or biophysical) economics attempts to overcomecommonrestrictions on both understanding and response. Itscore idea is that, rather than “nature” being treated simply as an exogenous source of “natural resources” to power the human economic machineand a dumping ground for resulting wastes - while damage to the biophysical environment becomes merely an “externality” - the economy is embeddedfirmly within and inevitably part of nature even asthat economytakes over an ever growing portion ofavailable “space.” The larger the scale of the economy relative to, and the greater its intensity of impact on, the biosphere as a whole, the greater the risk of destroying the conditions necessary for human (and much other) life. Yet,ironically, such destruction gets rationalized in conventional economic thinking by the claim that it is serving to improve human well-being. (Deconstructing the concept of Gross Domestic Product as a measure of “welfare” is one early aim of the course.)
Another core objective is determining whether means exist or can be createdto ensure a scale and form of human economic activity consistent with the integrity of the biosphere.That requires posing - and answering - a number of questions. For example:how can we assess the present scale and impact of the human economy at a global level if not in simple monetary terms?If a dollar measure is inadequate or misleading, what othercriteria canbe used todetermine the present nature,direction and impact of human economic“development?”How much is too much?Is it even possible to establish a“sustainable”scaleof economic activity or to create a “steady-state economy?”Or is the only answer to shrink– byreducingthroughput of energy and raw materials – the scale of the present human economy?If so with what likely consequences – economic, political, and social?As those questions show,most important terms used in orthodoxy economic thinking require at best careful scrutiny and redefinition, at worst perhaps to be replaced by more appropriate concepts.
To these questions ecological economics offersdifferent approaches than those suggested by economic orthodoxy. The main tools in ecological economics include assessments of the economy’s direct and indirect appropriation of net energy, land area, biomass and materials including water, both in physical form and in the form of “virtual” water -i.e. water that has been “spent” to produce other commodities. They include following the flow of energy and raw materials in physical rather than just in financial terms, through an economy structured to work via linear throughputs. At the end of the day, the course asks, what guidance does the ecological approach give us, differently than that of standard economics, for radically reassessing and restructuring the relations between the human economy and the biophysical reality in which it is inevitably and inextricably intertwined?
More concretely this course asks (at least) seven fundamental questions:
i)How have human beings in pursuit of material well-being managed to breakthe formerly close relationship between ecological and economic cycles?
ii)At what point does (or did) the human economic enterprise as a whole become simply too largefor the biosphere to tolerate without serious damage?
iii)How are the benefits and costs (ecological as well as social) from“economic growth” defined, measured, and distributed?
iv)Rather than just focussing on how many jobs can be created, which jobs should be created and,perhaps more importantly, which ought to be eliminated?
v)Rather than considering how fast technology can develop, the question might be which technologies toencourage(or phase out) and how that can be done?
vi)Rather than focusing on total supply of new goods and services, it asks which are genuinely “goods” as distinct from “bads” or “regrettables” and what level of production (even of genuine “goods”) is compatible with the integrity of the biophysical environment?
vii) At the end the course asks what alternative paths might allow the economy to again exist at peace with a biosphere upon which life itself ultimately depends?
Learning Objectives
By the end of the course, students will be ableto:
1)understand the basic concepts and methodologies of ecological economics;
2)differentiate the mindsets of environmental and ecological economics;
3)useecological economics to assess current institutions and practices.
4)employ principles of ecological economics to think of possible resolutions.
Grading and Participation
Each class will generally be broken down into three parts:
1) a presentation by the course instructors;
2) student presentations based on reading material for the week;
3) a general discussion relating the class readings, student presentationsand specific questions posed by the instructor for consideration in that class.
Course assessments will be based on three components:
a)class presentations and participation;
b)an annotated outline(max 2 pages total including references) of a term paperon topics to be cleared in advance with instructors;
c)a written (max 2 pages plus references) answer to or exposition on one of the central themes of the course, explained more fully below – due in class 10 March;
d)a final term paper with penalties for late submission;
e)a possible bonus component explained below.
Student presentations: Topics and dates for class presentations will start to be assigned in the first class of the term. In general these will be based on material in the mandatory reading list, but students doing the presentation of the material are encouraged to go beyond. These students (2-3 per class) will prepare a 10-min. presentation with anassessment of the main arguments of the assigned paper(s),drawing on the concepts and tools in other readings, both anysuggested and any they find useful elsewhere. They may use visual aids, such as Powerpoints, but only to facilitate presentation. Time restrictions will be enforced – students must practice thoroughly. They will be appraised both on their presentation and their capacity to handle questions. (10% of total grade.)
Term papers:
You will need to select a term paper project by the end of January. Instructorswill meet with you individually to assist in defining and developing your paper. The paper will be assessed in three stages.
Firstcomes a ONEpage prospectus of the paper, with a clear title, a tentative summary of objectives, and ideas of where to look for sources.This is due by in class February 3. There is no mark specifically for this preliminary prospectus – but marks will be deducted from the final prospectus for failure to complete the preliminary in a satisfactory way.
Second comes a more formal outline (2pages + references), with clear specifications of the main themes and/or thesis to be argued, a detailed abstract, a table of contents in bullet form, and a bibliography of materials already consulted and those expected to be consulted in the future. (15% of final grade.) This is due in class March 3.Bothinitial and final outlines will be returned to you with comments, the formal outline will have a joint grade.
The term paper final submission (by April 7) should not exceed 2,500 words - about12 pages standard font double spaced.But remember: less is often more!We expect that all papers will draw on the teachings and readings of the class in a meaningful way.Even if the paper topics seem different from those dealt with in class, concepts and methodologies are much the same – you will be judged on how well you can apply the basic concepts of ecological economics to analyze your chosen topic.
Theme questions or expositions:
All students will write a short analysis of ONE of the following topics, length no more than two pages plus proper referencing. (More possible topics may be suggested in class as the course proceeds.) Marks depend on how clear is your understanding of the issues, how well you can criticize or modify the use of particular concepts in orthodox or ecological economics, depending on the specific topic chosen, how effectively you have searched and used credible sources – please, do not rely on cyberbabble or blog-head rants. Some examples of possible subjects are given below: students may do others with permission of the instructors.
1)Examine critically the concept of the “original affluent society.” Outline the circumstances in which it might have some truth; and assess whether or not the concept is of any relevance to the future of human societies in the 21st Century.
2)What do you understand by the concept of a “stationary state” in economics? Do you think it is possible, or desirable? What policies might be implemented to bring it into existence, what political changes would be necessry, and what might be the economic and social costs to contemporary human society?
3)Classical economists of the early 19th Century led by David Ricardo talked of “the original and indestructible powers of the soil.” How does that square with the lessons of modern soil ecology? And what are the implications of the difference for present day agricultural practices and the future of world food production?
4)Briefly examine the development of what is now called input-output analysis in terms of its original and present-day use, and compare it to the concept of industrial metabolism. What differences do you see, why do they exist, and what are the comparative strengths and weaknesses?
5)In 1945, following many years of depression and destruction, the US led an international effort to reconstruct the world economy. To what degree can the “Marshall Plan” be interpreted as a scheme to shift western European industries from a coal to an oil foundation?
6)Is the price of oil in international commerce set by the “market,” by financial manipulation, or by political decisions or by all of them? If more than one factor, what do you regard their relative significance to be, and what does that seem to imply for the future of the benchmark price of the world’s most important source of liquid fuel?
7)Critically examine using the energetics concepts you learned in class, along with common sense, the claims that any of the following might be used to substitute for fossil fuels in the event oil production really does reach a “peak” and start to fall: hydrogen fuel, photovoltaics, biofuels, thorium reactors, cold fusion etc.
8)Is Valuation of Nature a path that can leadto a less destructive society? If values beyond chrematistics are considered, then how would such an analysis inform decision-making?
9)If tree plantations are not forests, then what is the meaning of Faustmann Rule and optimal forest rotation for forest management?
10)Technological progress has improved human wellbeing for centuries. However it seems the use of exosomatic energy has its limits. What are those limits and how can we change the meaning and use of technology and technics in our society?
Bonus marks:
The 12th (or possibly 13th) class will feature a student-led debate over the lessons of the readings on growth and degrowth. Attendance and participation are mandatory. Students can earn up to 10% bonus for exceptional participation. These bonus points will be allocated by vote of the class as to which THREE students contributed most to the debate.
Summary: Marking Scheme
Oral presentation based on course readings … 10%
Preliminary outline …see above
Written answer-discussion of special topics ….. 15%
Final outline ….15%
Research paper …60%
Total …100%
Possible bonus (see above) …. 0-10%
Presentations are difficult for some students because of language barriers. However the point is logic and understanding, not flowery language. You are expected to explain the meaning and significance of the material clearly to your fellow students. That includes explaining why you think its argument is right or wrong. Do not hesitate to disagree with anything said by the readings or the instructor – just make sure your arguments are coherent and well informed. A student capable of disputing with logic and evidence some bit of received wisdom and making your instructors squirmis a more impressive learner than one that simply feeds material back.
READINGS:
(NOTE: several readings are taken from Charles Hall and Kent Klitgaard Energy and the Wealth of Nations. This book is downloadable chapter by chapter from the McGill Library.)
1.Introduction to course and instructors Jan 6
Cutler Cleveland Biophysical Economics Encyclopedia of the Earth
Van den Bergh, J.C.J.M. 2000. Ecological Economics: Themes, Approaches, and Differences with Environmental Economics. Regional Environmental Change, 3(1): 13-23.
Peet, Energy and the Ecological Economics of Sustainability Part 1
2. Basicprinciples of ecological economics Jan 13
Funtowicz, S.O. and J.R. Ravetz. 1994. The worth of a songbird: ecological economics as a post-normal science. Ecological Economics 10:197-207.
Norgaard, R. 1990. Economic Indicators of Resource Scarcity: A Critical Essay. Journal of Environmental Economics and Management. 19: 12-25.
Daly, H. 1993. The Perils of Free Trade. Scientific American. 50: 50-57
3. Open and closed system economics Jan 20
Meadows, Donella Thinking in Systems Part I: System Structure and Behavior
Roegen, G. 1975. Energy and Economic Myths. Southern Economic Journal 41(3): 347-381
Hart, & Klitgaard Energy and the Wealth of Nations 2, 10 (download from McGill Library)
4. Energetics of the solar-flow economy: History and fundamentals Jan 27
Marshall Sahlins “The Original Affluent Society” Stone Age Economics Chap. 1
George Grantham “Agriculture” Oxford Encylopedia of Economic History Vol. 1 Smil V. Energy in World History
Kris de Decker “Medieval smokestacks: fossil fuels in pre-industrial times” Low-Tech Magazine
Ruddiman, William “Early Agriculture and Civilization” Plows Plagues and Petroleum Chap 7
5. Energetics of the fossil-fuel economy: From coal to oilFeb 3
Hart & Klitgaard 3 & 6
Hornborg, A. 2006. “Footprints in the Cotton Fields: The Industrial Revolution as Time-Space Appropriation and Environmental Load Displacement”Ecological Economics. 59: 74-81
Mark Haw “From Steam Engines to Life” American Scientist Nov.-Dec. 2007
Stefana Barca“Energy, property, and the industrial revolution narrative” Ecological Economics 70 (2011)
6. Eating fossil fuels Feb 10
Giampietro “A Reality check on the feasibility and desirability of biofuels” ICTA
“How to feed a hungry world” Nature 29 July 2010
“The Growing Problem” NatureVol 466|29 July 2010
Tom Mysiewicz “Weaponized Agriculture” Institute of Political Economy 26 May 2014
7. Economic values and valuation: A heterodox perspective Feb 17
Gintis, H. 2000. Beyond Homo Economicus: Evidence from Experimental Economics. Ecological Economics, 35 (3):311-22
Vatn, A. and D. Bromley.1994. Choices Without Prices Without Apologies. Journal of Environmental Economics and Management, 26: 129-48
Veisten, K. 2007. Contingent valuation controversies: philosophic debates about economic theory. The Journal of Socio-economics 36: 204-232
8. Cost benefit analysis vs multicriteria decision making Feb 24
Phillibert, C. 2003. Discounting the future. Encyclopedia for Ecological Economics.
Munda, G. 2004. Social Multicriteria evaluation: methodological foundations and operational consequences. European Journal of Operational research 158: 662-677
Martinez-Alier, J.; Munda, G. and J. O’Neill.1998. Weak Comparability of Values as a Foundation for Ecological Economics. Ecological Economics, 26 (3): 277-86
9. Ecological consequences of industrial waste: March10
The Top Ten of the Dirty Thirty (The World’s Most Polluted Places) Blacksmith Institute September 2007
Giljum, S. and Eisenmenger, N. 2004. North-South Trade and the Distribution of Environmental Goods and Burdens: A Biophysical Perspective. Journal of Environment and Development, 13(1): 73-100
Pellow, D.; Weinberg, A. and A. Schnaiberg. 2003. The Environmental Justice Movement: equitable allocation of the costs and benefits of environmental management outcomes. Social Justice Research 14: 423-439
Marco Armiero & Giacomo D’Alisa “The Rights of Resistance: Garbage Struggles in Campania” Capitalism Nature Socialism 2 Nov. 2012
10. Energetics of the postcarbon economy: Is there an alternative?March 17