Joint Production and Responsibility in Ecological Economics

Joint Production and Responsibility in Ecological Economics

On the Foundations of Environmental Policy

Advances in Ecological Economics series

Stefan Baumgärtner, Malte Faber and Johannes Schiller

This groundbreaking book takes a fresh look at how environmental problems emerge from economic activity and how they may be addressed in a responsible and sustainable manner. At its centre is the concept of joint production. This captures the phenomenon whereby several effects necessarily emerge from one activity and whereby human action always entails unintended consequences. This, according to the authors, is the structural cause behind modern-day environmental problems.

Introduction

Stefan Baumgärtner, Malte Faber and Johannes Schiller

Subjects: economics and finance, environmental economics, environment, ecological economics, environmental economics

Extract

As we have seen in Part I of this book, joint production has a number of systematic implications for ecological-economic systems. Traditionally, the economic consequences of joint production are analysed using the established methods and concepts from environmental and resource economics. These are based in welfare economics and are centred around the concept of externality. There is a large and well-understood body of literature in that strand; authoritative textbook treatments include Baumol and Oates (1988), Dasgupta and Heal (1979), Hanley et al. (1997), Hartewick and Olewiler (1998), Kolstad (2000), Siebert (2004) and Tietenberg (2003). However, this approach systematically leaves open a number of important questions. This part of the book employs the concept of joint production to address some of these issues. Chapter 6 investigates how the analysis of joint production has influenced the history of economic theory and, vice versa, how in the history of economic theory the concept of joint production was shaped. We show that the concept of joint production is deeply rooted in economics and that there exists a vast body of knowledge on joint production which we can draw upon. We also identify remaining gaps in the current economic understanding of joint production. Chapter 7 then makes recourse to the philosophy of economics in order to explain why certain aspects of joint production are systematically neglected in modern economics. The thermodynamic analysis of joint production in Chapter 3 has left open the question of the value of joint outputs, that is whether they are...