dynamic multidimensional assessment of sustainability at the macro level the case of austria abstract this paper explores the issue of sustainability at the macro scale employing multi criteria decision aid mcda methods the incommensurability of values and the essentially multi dimensional and dynamic nature of sustainability challenge the use of composite measurement indices this determined the choice of mcda methods austria was chosen as a case study due to the wide availability of data especially on indicators of strong sustainability the structure of the multi criteria problem comprised the evolution of different sustainability dimensions over time the process for selecting criteria included a critical assessment of institutional sustainability agendas un eu and austrian government and theoretical recommendations after an assessment of mcda methods the naiade method demonstrated the most suitable properties for sustainability assessment the application of this outranking approach was undertaken in three separate settings long term from 1960 to 2003 medium term 1970 1995 and short term 1995 2003 with varying numbers of criteria the response of results to the addition of evaluating criteria and periods was tested the degree of credibility for accepting preference relations was also employed for sensitivity analysis according to the results of long term and medium term assessments especially in the weak sustainability setting sustainable progress is taking place in austria in the short term in the stronger sustainability setting and especially as the number of criteria increases more incomparable periods appear and trends are less determined moreover it is shown how results crucially depend on the methodological choices this is one of the first applications of the multi criteria tools to the dynamic analysis of sustainability at the macro scale

feebates rebates and gas guzzler taxes a study of incentives for increased fuel economy abstract us fuel economy standards have not been changed significantly in 20 years feebates are a market based alternative in which vehicles with fuel consumption rates above a pivot point are charged fees while vehicles below receive rebates by choice of pivot points feebate systems can be made revenue neutral feebates have been analyzed before this study re examines feebates using recent data assesses how the undervaluing of fuel economy by consumers might affect their efficacy tests sensitivity to the cost of fuel economy technology and price elasticities of vehicle demand and adds assessments of gas guzzler taxes or rebates alone a feebate rate of 500 per 0 01 gallon per mile gpm produces a 16 percent increase in fuel economy while a 1000 per 0 01 gpm results in a 29 percent increase even if consumers count only the first 3 years of fuel savings unit sales decline by about 0 5 percent but sales revenues increase because the added value of fuel economy technologies outweighs the decrease in sales in all cases the vast majority of fuel economy increase is due to adoption of fuel economy technologies rather than shifts in sales

the interaction of taxes and inflation in a macroeconomic model this paper presents a closed economy macroeconomic model in which the nominal income of some assets is taxed whereas that of others is not the short run and long run implications of a change in expected inflation are examined an increase in the expected rate of inflation shifts the composition of aggregate demand since asset holders shift their portfolios from the taxed asset corporate capital to the untaxed asset consumer durables in the long run this shift implies a stock adjustment decline in capital with a consequent decrease in the rate of growth of productivity over the transition period

inflation taxes and asset prices a note on wealth effects and asset complementarity abstract in popular debate as well as academic discussion it is frequently argued that the interaction of nominal income taxation and inflation has systematically favored investments in consumer durables and housing at the expense of investments in corporate shares and productive enterprises in this note it is shown that the above claim is far from universally true owing to the existence of wealth effects across markets and complementarity relationships among assets two factors ignored in earlier literature the possibility that the inflation induced distortions of the tax system have a generally stimulating effect on diverse assets such as corporate shares and housing cannot be ruled out

fossil resource trade balances emerging trends for the uk abstract the aim of this paper is to examine the extent to which the uk can be classified as a net importer of fossil resources and a creator of pollution havens abroad between 1968 and 2000 using input output techniques and a derived resource flow classification system both the physical trade balance ptb and pollution trade balance utb associated with fossil resource use are computed the ptb shows that between 1968 and the early 1980 s the uk is presented as a net importer of direct fossil resource flows between 1984 and 2000 the uk is identified as a net exporter of direct fossil resources these trends are primarily explained by the uk s discovery and commercial production of north sea oil and gas fields in the late 1970s on the other hand the utb shows that over the whole period the indirect used flows attributable to the uk s exports are higher than those attributable to its imports these findings suggest that the uk did not create pollution havens abroad from the use of fossil resources between 1968 and 2000 however it is noticeable in both cases that from 1995 the uk s position as a net exporter has been decreasing considerably maturing north sea oil and gas fields set against increasing demands for fossil fuels and imported goods is signalling a return to the uk s pre 1984 dependence on direct imported fossil resources and the possible creation of pollution havens abroad knowledge of these trends contributes to the evidence base for the uk s changing import and export structure and the potential environmental repercussions at home and abroad

clearing the air the costs and consequences of higher cafe standards and increased gasoline taxes abstract concerns about energy security and climate change have sparked legislators interest in reducing gasoline consumption by increasing corporate average fuel economy cafe standards using an empirically rich simulation model and cost estimates for anticipated fuel economy technologies we estimate annual costs of reducing long run gasoline consumption by 10 via a 3 8 miles per gallon increase in the standards and the potential cost savings from allowing manufacturers to buy and sell fuel economy credits maximum gasoline savings would be realized only after all existing vehicles were replaced or 14 years in our model a gasoline tax would produce greater immediate savings by encouraging people to drive less and eventually to choose more fuel efficient vehicles we demonstrate the advantage of a tax by comparing the cost of the higher cafe standards over the first 14 years against the cost of a gasoline tax that would save the same amount of gasoline over that time

on the importance of the supply side in demand side management we discuss how the structure of market supply affects the evaluation of policies to promote energy efficiency in household appliances if competitive markets offer the levels that consumers demand product standards inefficiently restrict choice if suppliers price discriminate minimum standards can restrict the inefficient use of energy intensity to segment consumers we also compare the effects of average intensity standards energy prices and innovation and consider what the different behavioral predictions imply for empirical studies of energy efficiency good policymaking requires knowing not only how consumers value energy efficiency in their decision making but also how producers respond to those values

energy efficiency policy in a non cooperative world abstract in this paper we explore energy efficiency policies in the presence of a global environmental problem and international cost interdependency associated with r d activities we develop a simple model with two regions where the cost of an appliance in one region depends upon the level of energy efficiency in that region and the level of r d activities by the appliance industry in our model the cooperative outcome can be decentralized by imposing a tax on energy however we show that when regions do not cooperate they have an incentive to adopt additional instruments to increase energy efficiency the reason is that the lack of cooperation leads to under taxation of the environmental externality which in turn creates an incentive to try to reduce emissions produced abroad we illustrate this phenomenon with the californian vehicle greenhouse gas standards

international comparison of resource use and its relation to economic growth the development of total material requirement direct material inputs and hidden flows and the structure of tmr abstract resource flows constitute the materials basis of the economy at the same time they carry and induce an environmental burden associated with resource extraction and the subsequent material flows and stocks which finally end up as waste and emissions a reduction of this material throughput and the related impacts would require a reduction of resource inputs and breaking the link between resource consumption and economic growth would require an increase in resource productivity material flow analysis mfa can be used to quantify resource flows and indicate resource productivity in this article we study the available empirical evidence on the actual de linkage of material resource use and economic growth we compare resource use with respect to total material requirement tmr and direct material input dmi for 11 and 26 countries respectively and the european union eu 15 the dynamics of tmr as well as of the main components are analysed in relation to economic growth in order to show whether there is a decoupling relative or absolute from gdp and a change of the metabolic structure in the course of economic development dmi cap so far only decoupled from gdp cap in relative terms that is in most countries it reached a rather constant level but with the exception of czech republic showed no absolute decline yet tmr cap was reduced in two high income countries and one low income country due to political influence changes in tmr were more influenced by hidden flows hf than by dmi we analyse the dynamics of the structure and composition of tmr in the course of economic development in general the economic development of industrial countries was accompanied by a shift from domestic to foreign resource extraction different relations can be discovered for the share of biomass fossil fuel resources construction resources and metals and industrial minerals

international experience on incentive program in support of fuel economy standards and labelling for motor vehicle a comprehensive review abstract the road transports especially the motor vehicles play a significant role in increment of energy consumption in the transportation sector however the harmful greenhouse gas ghg emissions from such vehicles which are the main causes of global warming have been increased as well one of the effective solutions to reduce the growth rate of energy consumption is the implementation of fuel economy standard and label other countries experiences indicate that the program is very beneficial for society environment and government the hierarchy of the program consists of the test procedure fuel economy standards fuel economy label and incentive program as a peak of the program reviews of the fuel economy standard can be found in many references however a few papers deal with the incentive program specifically therefore this paper aims to give a review on the implementation of the incentive program globally in support of fuel economy standard and label for the motor vehicles finally as the incentive program is necessary to support fuel economy standard and label it should be applied to the motor vehicles as soon as possible

physical and monetary input output analysis what makes the difference abstract a recent paper in which embodied land appropriation of exports was calculated using a physical input output model ecological economics 44 2003 137 151 initiated a discussion in this journal concerning the conceptual differences between input output models using a coefficient matrix based on physical input output tables piots in a single unit of mass and input output models using a coefficient matrix based on monetary input output tables miots extended by a coefficient vector of physical factor inputs per unit of output in this contribution we argue that the conceptual core of the discrepancies found when comparing outcomes obtained using physical vs monetary input output models lies in the assumptions regarding unit prices and not in the treatment of waste as has been claimed ecological economics 48 2004 9 17 we first show that a basic static input output model with the coefficient matrix derived from a monetary input output table is equivalent to one where the coefficient matrix is derived from an input output table in physical units provided that the assumption of unique sectoral prices is satisfied we then illustrate that the input output tables that were used in the original publication do not satisfy the assumption of homogenous sectoral prices even after the inconsistent treatment of waste in the piot is corrected we show that substantially different results from the physical and the monetary models in fact remain finally we identify and discuss possible reasons for the observed differences in sectoral prices faced by different purchasing sectors and draw conclusions for the future development of applied physical input output analysis

allocation distribution and scale towards an economics that is efficient just and sustainable abstract the practical policy of issuing tradeable permits for depletion and pollution requires for its implementation the clear separation of the three basic economic goals of efficient allocation equitable distribution and sustainable scale economic theory needs to catch up with policy in recognizing that scale issues cannot be reduced to either allocation or distribution

inflation and the stock market reply the very poor performance of the stock market has been one of the major economic puzzles of the 1970 s the value of common stock has fallen significantly in relation to the price of final goods the replacement value of the capital stock and the value of pretax equity earnings this fall in real share prices has raised the cost of capital to firms and has thereby reduced the incentive to invest in plant and equipment although no single factor is likely to have been responsible for this unusual performance of share prices i believe that the sharp rise in inflation during the past fifteen years has been one of the significant causes of course inflation should have no effect on real share values in an economy in which there are no taxes or other imperfections and in which portfolio investors correctly distinguish real and nominal magnitudes but the u s economy does have substantial taxes that are assessed on the basis of nominal rather than real capital income 2 an increase in the rate of inflation raises the effective tax rate on equity earnings relative to the tax rate on other types of investment income individuals and financial institutions will therefore hold the existing stock of equity capital only at a lower real price in inflation and the stock market i presented a very simple model designed to capture the essential feature of this tax nonneutrality and its impact on share prices the primary purpose of the analysis was to show how the overstatement of taxable profits caused by inflation because of historic cost depreciation and inventory accounting rules could lead to lower real share prices even though inflation reduced the real net of tax return on debt this explanation stands in sharp contrast to the conventional view that inflation lowers share prices because the nominal yield on debt rises a second purpose of the analysis was to show how corporate stock could be a good hedge against inflation as long as the inflation rate remained constant while being adversely affected by increases in the expected rate of inflation and finally i wanted to indicate the importance of recognizing separately the roles of tax exempt institutional investors and taxable individual investors the analysis was definitely not intended to prove that inflation must cause share prices to decline with existing u s tax rules the model that i used is clearly far too simple in several ways to do more than illustrate a possible line of influence the model assumes among other things that there are no retained earnings no corporate debt finance and no individual investment opportunities other than corporate stocks and government bonds 3 but the simplified model has the virtue of tractability and clarity that would be lost by adopting a more complex specification in their comment irwin friend and joel hasbrouck have presented a slightly different model of asset demand in an economy with taxes and inflation i think that this alternative model is a useful complement to my own analysis moreover as i shall explain in this reply their model has the same implications as mine about the effect of inflation on share prices president national bureau of economic research and professor of economics harvard university the study discussed in this note is part of the nber study of capital formation the views expressed here are my own and not those of the nber franco modigliani and richard cohn have argued that many investors do not correctly evaluate either real profits or the relevant discount rate because they do not distinguish between real and nominal interest rates 2this includes the use of historic cost depreciation artificial inventory profits based on fifo accounting nominal interest income and expenses and nominal capital gains 3these features are included in a later model see my 1980b article designed to explain more of the complexities of the tax inflation interaction

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

the physical economy of the european union cross country comparison and determinants of material consumption abstract in this paper we investigate what determines observed differences in economy wide material use among the eu 15 member states the empirical basis for our analysis is an extended and revised material flow data set for each of the eu 15 countries in time series from 1970 to 2001 this data set comprises consistent data for domestic extraction imports and exports as well as for derived material flow indicators broken down by 12 types of materials we compare the level and composition of domestic material consumption dmc in the eu 15 member states and identify determinants of the observed differences across the european union member states overall dmc per capita varies by a factor of three ranging between 12 tonnes per capita in italy and the united kingdom and 37 tonnes per capita in finland this variability of dmc in the eu 15 is in a similar order of magnitude as the variability of gdp per capita or total primary energy supply per capita linear correlation analysis reveals that national income and final energy consumption relate to material use but cannot fully account for the observed differences in material consumption by breaking down overall material flow indicators into 12 categories of materials and analysing their use patterns in detail we identified a number of factors socio economic and natural that influence the level and composition of economy wide material use many of these factors are specific for certain types of materials others are more general and quite some driving factors counteract each other regarding the direction of their influence concluding we summarize the most important driving factors for domestic material consumption stressing population density as largely neglected but important explanatory variable for material use patterns discuss issues of environmental significance aggregation and the use of different denominators in material flow accounting and suggest a re interpretation of dmc

material flow accounts balances and derived indicators for the czech republic during the 1990s results and recommendations for methodological improvements abstract the economy and the environment are connected through material and energy flows these flows are the key cause of environmental problems together with land use and other biological and social factors and can serve as an indirect indicator of pressure on the environment the leading method for assessing material flows and dematerialisation at a macroeconomic level was developed during the 1990s by a number of research institutes and organisations the result of this effort was the guide eurostat 2001 92 this is a guide for the analysis of the total mass of annual material inputs and outputs for the whole economic system using accounts balances and derived indicators of material flows the manual touches only briefly on the flows between various sectors of the economy this article describes the application of material flow analysis mfa to the economy of the czech republic relevant indicators were derived on the basis of accounts and balances of material flows compiled for the czech republic for 1990 2000 the indicators and analysis of material flows presented here are the first results covering a long time period and a comprehensive set of material flow accounts in a transition economy the results show that indicators of material flows decreased during the 10 year period analysed by approximately 30 40 material intensity also dropped by 30 i e material efficiency increased by 30 while the material intensity of other countries such as germany dropped by 30 in the 15 year period finally it has been possible to demonstrate that economic growth as expressed by gdp has been decoupled from environmental pressure as expressed by material flow indicators the article proposes further work that should be undertaken in mfa at macroeconomic level in the czech republic in conclusion recommendations are made on how to improve the methodology used

determinants of environmental innovation in us manufacturing industries abstract this paper provides new evidence on the determinants of environmental innovation we employ panel data models to study how environmental innovation by us manufacturing industries responded to changes in pollution abatement expenditures and regulatory enforcement during the period 1983 through 1992 we find that 1 environmental innovation as measured by the number of successful environmental patent applications granted to the industry responded to increases in pollution abatement expenditures however 2 increased monitoring and enforcement activities related to existing regulations did not provide any additional incentive to innovate we also find some empirical evidence that environmental innovation is more likely to occur in industries that are internationally competitive

the taxation of risky assets this paper reconsiders the effects of taxation on risky assets recognizing the importance of variations in asset prices we show that earlier analyses that assumed that depreciation rates are constant and that the future price of capital goods is known with certainty are very misleading as guides to the effects of corporate taxes we then examine the concept of economic depreciation in a risky environment and show that depreciation allowances if set ex ante should be adjusted to take account of future asset price risk some empirical calculations suggest that these adjustments are large and have important implications for the burdens of and nonneutralities in the corporation income tax

policy watch the economics of fuel economy standards one of the most hotly contested of all energy policy issues involves corporate average fuel economy or cafe standards for new cars and light duty trucks tighter standards would reduce gasoline consumption and hence both greenhouse gas emissions as well as this country s vulnerability to oil price shocks but they would also increase the price of new vehicles worsen traffic congestion and depending on how they are phased in possibly even reduce occupant safety these effects are amenable to economic analysis and we review the evidence to date bearing on this interesting and important question

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

changes in the united kingdom s natural relations in terms of society s metabolism and land use from 1850 to the present day abstract in this paper we present our understanding of how society and nature have interacted in the course of history in terms of society s metabolic interchange with the biophysical environment presenting a theoretical model we begin by focusing on the interface between society and nature society s natural relations as conceptualized by the idea of metabolism which draws upon marxist theory complemented by a systems approach the concept of metabolism portrays society as a system which has to establish and maintain a permanent throughput of energy and matter to produce and maintain society s material components the amount of resource flow is operationalized by using material and energy flow accounting methods empirically these methods are applied to the uk s economy in a time series approach from 1850 to the present day we discuss different aggregates of inputs such as domestic material extraction foreign trade of materials energy input and additionally give an account of land use change obviously these changing natural relations are linked to socio economic activities hence we make a first attempt to discuss different periods of socio economic development by drawing from a regulation approach and try to link them to physical indicators such as direct material and energy input and domestic material consumption dmc thereby we hope to contribute to a historical understanding of socio economically driven environmental change within the framework of ecological economics

innovation and the international diffusion of environmentally responsive technology abstract new evidence is presented on environmental innovation and diffusion over the 1970s and 1980s at a global level a substantial amount of innovations occurred in the united states japan and germany the share of environmental patents in all patents varied between 0 6 and 3 and as such was higher than the corresponding share of pollution abatement expenditure in gdp japanese environmental innovation rates were consistently high certain plausible connections between environmental regulation and innovation also emerge across these three countries and over time innovation responded to pollution abatement expenditure an indicator of the severity of environmental regulations environmental patenting rates in developing countries were also high reaching 2 in many years in brazil developing country innovators obtained a non trivial number of patents most of which appear geared towards adapting imported technologies to local conditions however domestic innovation was only one path to new technologies imports of disembodied environmental technologies foreign patents registered in developing countries were substantial foreign patents were typically important or generic patents evidence also suggests that such patents protected intellectual property in equipment exported developing countries especially in east asia often chose to obtain technologies embodied in pollution abatement equipment