Joint Production and Responsibility in Ecological Economics
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Joint Production and Responsibility in Ecological Economics

On the Foundations of Environmental Policy

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.
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Chapter 8: Ambivalence of Joint Outputs

Stefan Baumgärtner, Malte Faber and Johannes Schiller


∗ Introduction It is usually assumed that the character of joint outputs – whether they are positively valued goods, free goods or negatively valued bads – is immediately obvious. For instance, in modelling the joint production of electricity and carbon dioxide in fossil-fuel-fired power plants, it seems to be apparent that electricity is a desired good while carbon dioxide is an undesired bad due to its harmful environmental impact. However, the character of an output, like its value, is not an inherent property of the substance itself but depends on the context in which the output comes into existence. For example, the waste heat generated in power plants may be a desired and positively valued commodity that could be used for space heating, given appropriate infrastructure and demand. But when released directly into ecosystems, such as rivers or lakes, it is a harmful and undesired bad. In general, many factors will determine the value of an output and its character as a good, a free good or a bad (Debreu 1959: 33). Among them are the preferences of households for this output and other outputs, the technology by which it is produced, the scarcity of the resources from which it is produced, its environmental impact, etc. As a consequence, there are outputs of production which may be ambivalent. That is, they may potentially be both goods or bads, depending on the circumstances under which they are produced and perceived (Baumg¨rtner 2000: Chapa ter 10, 2004a). As all the factors that determine...

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