crisis or opportunity economic degrowth for social equity and ecological sustainability introduction to this special issue abstract this article reviews the burgeoning emerging literature on sustainable degrowth this is defined as an equitable downscaling of production and consumption that increases human well being and enhances ecological conditions at the local and global level in the short and long term the paradigmatic propositions of degrowth are that economic growth is not sustainable and that human progress without economic growth is possible degrowth proponents come from diverse origins some are critics of market globalization new technologies or the imposition of western models of development in the rest of the world all criticize gdp accounting though they propose often different social and ecological indicators degrowth theorists and practitioners support an extension of human relations instead of market relations demand a deepening of democracy defend ecosystems and propose a more equal distribution of wealth we distinguish between depression i e unplanned degrowth within a growth regime and sustainable degrowth a voluntary smooth and equitable transition to a regime of lower production and consumption the question we ask is how positive would degrowth be if instead of being imposed by an economic crisis it would actually be a democratic collective decision a project with the ambition of getting closer to ecological sustainability and socio environmental justice worldwide most articles in this issue were originally presented at the april 2008 conference in paris on economic degrowth for ecological sustainability and social equity this conference brought the word degrowth and the concepts around it into an international academic setting articles of this special issue are summarized in this introductory article hueting d alessandro and colleagues van den bergh kerschner spangenberg and alcott discuss whether current growth patterns are un sustainable and offer different perspectives on what degrowth might mean and whether and under what conditions it might be desirable matthey and hamilton focus on social dynamics and the obstacles and opportunities for voluntary social action towards degrowth lietaert and cattaneo with gavalda offer a down to earth empirical discussion of two practical living experiments cohousing and squats highlighting the obstacles for scaling up such alternatives finally van griethuysen explains why growth is an imperative in modern market economies raising also the question whether degrowth is possible without radical institutional changes

sustainable de growth mapping the context criticisms and future prospects of an emergent paradigm article i nfo sustainable de growth is both a concept and a social grassroots northern movement with its origins in the fieldsofecologicaleconomics socialecology economicanthropologyand environmentalandsocialactivistgroups this paper introduces the concept of sustainable de growth by mapping some of the main intellectual influences fromthese fields with special focus on the francophone and anglophone thinking about this emergent notion we propose hypotheses pertaining to the appeal of sustainable de growth and compare it to the messages enclosed within the dominant sustainable development idea we scrutinize the theses contradictions and consequences of sustainable de growth thinking as it is currently being shaped by a heterogeneous body of literature and as it interacts with an ample and growing corpus of social movements we also discuss possible future paths for the de growth movement compared to the apparent weakening of the sustainable development paradigm

developing country exports of manufactures moving up the ladder to escape the fallacy of composition this paper tests for a fallacy of composition by analysing the demand for exports of the 18 developing countries that are most specialised in manufactures in the markets of the 10 largest industrial countries estimated export equations both time series and panel data suggest that most developing countries compete with other developing country exporters rather than with industrialised country producers a smaller number of countries that export more high technology products compete with industrialised country producers and also have higher expenditure elasticities for their exports thus the fallacy of composition applies mainly to the larger group of countries exporting mostly low technology products

status effects and environmental externalities abstract this paper examines a static competitive economy where the production of a consumption good generates pollution that adversely affects human welfare preferences are defined over consumption leisure pollution and economic status each person s status increases with her own consumption but decreases with the average consumption of society the achievement of a pareto efficient resource allocation requires a consumption tax to offset the incentive to overconsume in the pursuit of enhanced status in contrast with standard prescriptions the efficient pollution tax generally exceeds the sum of individuals marginal willingness to pay for pollution abatement these findings remain unaltered when preferences are modified to incorporate altruistic concern for others well being altruism however suggests a potential role for government intervention to achieve a desirable i e pareto efficient distribution of welfare between individuals

energy conservation more effective with rebound policy this article sketches the problem of indirect energy use effects also known as rebound of energy conservation there is widespread support for energy conservation especially when it is voluntary as this seems a cheap way to realize environmental and energy climate goals however this overlooks the phenomenon of rebound the topic of energy rebound has mainly attracted attention from energy analysts but has been surprisingly neglected in environmental economics even though economists generally are concerned with indirect or economy wide impacts of technical change and policies this paper presents definitions and interpretations of energy and environmental rebound as well as four fundamental reasons for the existence of the rebound phenomenon it further offers the most complete list of rebound pathways or mechanisms available in the literature in addition it discusses empirical estimates of rebound and addresses the implications of uncertainties and difficulties in assessing rebound suggestions are offered for strategies and public policies to contain rebound it is advised that rebound evaluation is an essential part of environmental policy and project assessments as opposed to earlier studies this paper stresses the relevance of the distinction between energy conservation resulting from autonomous demand changes and from efficiency improvements in technology equipment in addition it argues that rebound is especially relevant for developing countries

is the post fossil era necessarily post capitalistic the robustness and capabilities of green capitalism abstract our central target is to show that capitalism is not only much more robust to crises than presumed by its critics but also features promising capabilities with regard to solving the environmental crisis to elaborate this thesis we analyse how far capitalism can survive given the end of fossil energy carriers and may maintain its productivity under the preconditions of a regenerative energy system in a further step we demonstrate that crises may actually provide the prerequisites of the economy s transformation towards sustainability we argue that especially competitive capitalism as analysed by schumpeter offers excellent preconditions for generating environmental innovations however we will also point out the numerous social problems of green infrastructure projects in the last section we assume that markets alone will not suffice to concertedly solve the global environmental crisis here political action is needed that pools societal forces with regard to the ecological challenges hence specifically promoting desirable innovations the usefulness of state measures is to be judged in correlation to the respective specific national political and economic contexts a generalised opposition to capitalistic social orders disregards the complexity of these contexts and is at danger of omitting decisive determinants of crisis management

knowledge and the environment some recent analyses suggest that future increases in knowledge will more or less automatically alleviate or even eliminate future environmental problems here we examine this issue first we discuss whether a knowledge explosion is indeed occurring addressing some of the problems with assessing knowledge growth we next consider whether growth in knowledge will help the environment we ask whether future advances in knowledge are likely to assure benign environmental outcomes and discuss physical limitations of reducing resource consumption finally we outline policy interventions that would help produce and implement environmentally helpful knowledge although knowledge growth can help attenuate future environmental problems we are skeptical as to the ability of advances in knowledge to offset fully the adverse environmental impacts of continued growth of population and per capita consumption the ongoing shift from a material based to a services based economy reduces but does not eliminate the significant environmental impacts associated with the increasing scale of economic output in addition the ability of the economy to replace certain key natural resource inputs with knowledge inputs must eventually encounter limits public policy has a crucial role both in discouraging environmentally damaging forms of consumption and in promoting the generation and diffusion of environmentally beneficial knowledge 1999 elsevier science b v all rights reserved

testing for poverty dominance an application to canada the paper proposes and applies statistical tests for poverty dominance that check for whether poverty comparisons can be made robustly over ranges of poverty lines and classes of poverty indices this helps provide both normative and statistical confidence in establishing poverty rankings across distributions the tests which can take into account the complex sampling procedures that are typically used by statistical agencies to generate household level surveys are implemented using the canadian survey of labour and income dynamics slid for 1996 1999 and 2002 although the yearly cumulative distribution functions cross at the lower tails of the distributions the more recent years tend to dominate earlier years for a relatively wide range of poverty lines failing to take into account slid s sampling variability as is sometimes done can inflate significantly one s confidence in ranking poverty taking into account slid s complex sampling design as has not been done before can also decrease substantially the range of poverty lines over which a poverty ranking can be inferred

the demand for ldc exports of manufactures estimates from hong kong exports of manufactures from developing countries are generally believed to be sensitive to changes in the level of income in the developed countries their major market this belief is grounded on both casual observation especially from the experience of recent recessions and on extensive econometric evidence of low price elasticities and high income elasticities of demand for ldc exports in developed countries this paper argues that both casual observation and previous econometric evidence are misleading the aim of the paper is to show the order of magnitude of the bias contained in previous econometric estimates of price and income elasticities of demand for ldc exports of manufactures due to neglect of supply side influences previous econometric work has neglected the supply side of ldc exports for the simple reason that it is difficult to model it is difficult to model properly the supply of aggregate ldc exports since the determinants of export supply differ from country to country even for a single country modelling export supply is complicated since in addition to foreign demand and domestic supply exports are determined in part by domestic demand for exportables furthermore in most ldcs the incentive to export is strongly influenced by complex and continually changing industrial and trade policy measures there is one major exception hong kong one of the developing world s largest and most successful exporters of manufactured goods the manufacturing sector in hong kong is almost completely specialised exporting 95 of output consequently domestic demand plays no part in determining the volume of exports furthermore factor markets and the manufacturing sector are almost completely free from government intervention the main exception being the textile export restraints imposed at the insistence of importing countries the voluntary restraint agreements vras to which hong kong is subject no doubt affect the composition of exports but not necessarily the volume of aggregate exports if resources in the restrained sectors can easily be redeployed elsewhere in the economy judging from past export growth rates the vras do not appear to have had a significant effect on aggregate export growth in hong kong the results reported below also suggest that hong kong has effectively circumvented the trade barriers it faces the hong kong manufacturing sector in many ways resembles a firm in the

environment versus growth a criticism of degrowth and a plea for a growth in recent debates on environmental problems and policies the strategy of degrowth has appeared as an alternative to the paradigm of economic growth this new notion is critically evaluated by considering five common interpretations of it one conclusion is that these multiple interpretations make it an ambiguous and rather confusing concept another is that degrowth may not be an effective let alone an efficient strategy to reduce environmental pressure it is subsequently argued that a growth i e being indifferent about growth is a more logical social aim to substitute for the current goal of economic growth given that gdp per capita is a very imperfect indicator of social welfare in addition focusing ex ante on public policy is considered to be a strategy which ultimately is more likely to obtain the necessary democratic political support than an ex ante explicit degrowth strategy in line with this a policy package is proposed which consists of six elements some of which relate to concerns raised by degrowth supporters

gasoline demand revisited an international meta analysis of elasticities meta analysis is used to determine if there are factors that systematically affect price and income elasticity estimates in studies of gasoline demand four econometric models are estimated using long run and short run price and income elasticity estimates from previous studies as the dependent variables explanatory variables include functional form lag structure time span national setting estimation technique and other features of the model structure elasticity estimates are found to be sensitive to the inclusion or exclusion of some measure of vehicle ownership static models appear to overestimate short run elasticities underestimate long run price elasticities but pick up the full long run income responsiveness there is variation in the elasticity of demand across countries especially in the short run and gasoline demand appears to be getting more price elastic and less income elastic over time

demand and supply factors in the determination of nie exports a reply in their comment on muscatelli srinivasan and vines msv i992 athukorala and riedel challenge our conclusions regarding the estimated longrun elasticities of export demand for hong kong and our suggestion that estimating a system of export demand and supply could provide a solution to the normalisation problem unfortunately by focusing only on a subset of the issues raised by msv athukorala and riedel tend to ignore some of the key econometric evidence against their preferred small country assumption and their chosen normalisation price dependent export demand there are three key pieces of evidence which tend to point against the small country assumption first let us turn to the normalisation issue as athukorala and riedel note least squares methods such as the phillips hansen procedure will not yield estimates of cointegrating vectors which are independent of normalisation and that is why msv point out that the phillips hansen procedure may only alleviate not solve the normalisation problem ideally when estimating a simultaneous cointegrated model scm one should attempt to test and impose identifying restrictions on the h matrix in a johansen type multi variate var framework

does ecological economics have a future contradiction and reinvention in the age of climate change abstract this paper addresses the role of neoclassical methodologies in ecological economics and the contradictions these methodologies pose to the field s critical founding principles we first consider robert costanza s treatment of nicholas stern s global deal and then survey climate change related articles published in this journal over the past five years this survey reveals how mainstream neoclassical methodologies dominate discourse and do so by marginalizing more critical political economy analyses this situation imperils the field s founding vision of a no growth steady state it also fails to address the related growth dynamics of capitalism without such a critical treatment the field s formal embrace of methodological pluralism actually entails an ideological empiricism that renders ecological economics theoretically incoherent this situation undermines the field s historical promise as an alternative economic paradigm ecological economics now faces a problematic future its survival in a form faithful to its founding vision will require an explicit choice to address its internal contradictions and reinvent itself in ways relevant to our contemporary context without such a choice ecological economics will likely succumb to an implicit acceptance of the hegemony of mainstream economic methodologies and their pro growth imperatives

structural shifts in the manufacturing export performance of oecd economies summary this paper identifies structural shifts in manufacturing export performance of the major oecd economies the particular emphasis of this study is to see whether the longer run responses of a country s exports to the growth in world demand have undergone trend changes the econometric work focuses on the time variation in income elasticities from an export demand model over the period 1963 89 it thus covers a period in which there was a substantial slow down in world economic growth and in which the manufacturing sectors in advanced economies underwent substantial restructuring in the wake of the two oil price shocks and the competitive challenges of japan and the nics the exercise attempted to evaluate the relative successes and failures of the different oecd economies to maintain or improve their positions in the higher quality income elastic segments of world trade evidence was found for trend improvements in the income elasticity for uk exports from the early 1980s onwards and a trend decline for that of the us over the same period the effects of non tariff protection against japanese exports also showed up in our results and an attempt was made to separately identify its effects

a simple theory of advertising as a good or bad our analysis treats advertisements and the goods advertised as complements in stable metautility functions and generates new results for advertising by building on and extending the general analysis of complements by assimilating the theory of advertising into the theory of complements we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising we also use this approach to evaluate advertising from a welfare perspective whether there is excessive or too little advertising depends on several variables the effects on consumer utility the degree of competition in the market for advertised goods the induced changes in prices and outputs of advertised goods and whether advertising is sold to consumers

the economic case for international labour standards this paper explores the economic case for international labour standards granting workers rights of free association and collective bargaining confers both static and dynamic economic efficiencies static efficiencies refer to one time gains from improvements in economic practice dynamic efficiencies refer to gains from improvements to the growth path resulting from a shift away from a low road development path to a high road path these efficiencies raise wages employment and output in developing countries and they can also benefit workers in developed countries labour standards are an institutional mechanism for raising the quality of growth in both developing and developed countries in this sense they are a win win institution

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

intra nie competition in exports of manufactures this paper provides empirical evidence on the extent to which the asian newly industrialised economies nies compete in world export markets our results support existing studies which emphasise the importance of allowing for intra ldc competition in modelling an individual developing country s exports whilst the asian nies are regarded as a model for other developing countries to emulate one has to consider whether such an expansion in export supply would be at the expense of oecd economies or whether it will lead to a deterioration in the terms of trade of the developing countries as a group

income and price elasticities for exports of developing countries income and price elasticities for non oil exports of non opec developing countries play an imp ortant role in the development of policy responses to the debt crisis these elasticities are estimated for the major standard internation al trade classification commodity groups based on two stage least sq uares and quarterly data for 1973 to 1984 the income elasticity for non oil exports ranges between 1 4 and 1 9 the analysis also tests t he properties of the error term the dynamic specification and para metric stability the sensitivity of the results is assessed using sh iller s lags and band spectrum estimation copyright 1988 by mit press

an analysis of the disaggregated manufacturing exports of the asian nies to eec usa and japan this paper examines the export performance of the four asian newly industrialized economics nies by modelling their bilateral export flows to three main oecd blocks the usa japan and the european community our estimated export demand models reveal interesting asymmetries between these three areas of destination which do not emerge from previous aggregate empirical studies of nie export performance

demand and supply factors in the determination of nie exports a simultaneous error correction model for hong kong this paper considers the issue of whether a small developing economy such as hong kong faces a perfectly elastic demand for its exports of manufactured goods we construct a simultaneous demand and supply system which is estimated using full information maximum likelihood methods and which allows us to clearly identify demand and supply factors in determining export volumes and prices our empirical findings differ from previous studies conducted with this data set in that they suggest that even a small dynamic newly industrialized economy such as hong kong may not face infinitely elastic demand for its manufactured goods we also advance some reasons to explain why the small country assumption may not be applicable in the case of most industrialized economies

the evolution of preferences why sovereign preferences may not lead to sustainable policies and what to do about it abstract the conventional economic paradigm assumes that tastes and preferences are exogenous to the economic system and that the economic problem consists of optimally satisfying those preferences tastes and preferences usually do not change rapidly and in the short term this assumption makes sense sustainability is an inherently long term problem and in the long run it does not make sense to assume tastes and preferences are fixed and given if preferences are expected to change over time and under the influence of education advertising changing cultural assumptions etc the old assumption of consumer sovereignty is not adequate different criteria of optimality are needed how preferences change how they relate to the goal of sustainability and how they can or should be actively influenced to satisfy the new criteria needs to be determined ecological economics has emphasized the three rank ordered goals of ecological sustainability fair distribution and allocative efficiency this paper examines how preferences evolve and change over time and the implications of this for developing policies that meet these three goals in democratic societies

can the east asian model of development be generalized abstract export led growth has become increasingly popular among analysts and some governments as a development strategy besides contrasting its virtues to the distortions of the import substitution model popular through the 1960s advocates of the model frequently illustrate its merits by pointing to the remarkable success of its most prominent practitioners the east asian gang of four hong kong korea singapore and taiwan this study explores a possible limitation of the model known as the fallacy of composition while the model may work well if pursued by a limited number of countries it may break down if a large majority of developing countries seeks to pursue it at the same time because the resulting outpouring of manufactured exports might be more than western markets could absorb protectionist response might be the result of attempts to generalize the east asian export model of growth

import competition from developed and developing countries separate demand equations for imports from less developed countries ldcs and imports from developed countries dcs were estimated for each of eleven representative product groups imports were found to compete quite readily with domestically produced goods with plausible own price and cross price elasticities whereas the quantity of each type of import was found to be quite responsive to changes in the price of us home goods each appears to be less sensitive to the price of the alternative import an explanation that is consistent with this observation and that finds support from detailed industry information is that dcs and ldcs supply goods that are at different stages in the product or technology cycle whereas us producers compete in all submarkets this suggests that trade creation rather than trade diversion provides the predominant inroad for ldcs into the us market 25 references 3 tables

why environmental sustainability can most probably not be attained with growing production the concepts of welfare economic growth production environmentally sustainable national income environmental sustainability environmental function and asymmetric entering are defined because the confusion about these concepts hampers sound information based on these concepts the arguments are enumerated why it is plausible that environmental sustainability most probably cannot be attained with a growing production level national income ni and why broad acceptance of a lower production level meaning de growth of production will make attaining this goal much easier or at least possible some consequences of unsustainable development are provided and the alleged conflict between employment and environment is refuted the conclusion is that our planet is threatened by a wrong belief in a wrongly formulated growth

the economic and financial dimensions of degrowth abstract we respond to the call for future research on degrowth and specifically analyze the implications of economic degrowth on the monetary and financial system we argue that any early indications of degrowth would cause the stock market to crash which would trigger further deleveraging contagion and a deflation as a result the economy would implode which would eventually allow for a new rapid growth cycle given the likely extraordinary fiscal and monetary policy response during the implosion thus in our view degrowth as an explicit strategy option is economically unsustainable and unfeasible as a limitation our analysis centers on the examples of unplanned crisis leading to an economic implosion which imperfectly represent the idea of planned voluntary degrowth

economic de growth vs steady state economy in recent years the concept of economic de growth decroissance based on the literature of nicolas georgescu roegen e g 1 3 has found a revival in france italy spain and other countries in the popular as well as in the academic literature therein authors took on board georgescu roegens categorical rejection of a steady state economy sse as proposed by herman daly 4 they argue that economic degrowth is the only viable alternative goal to the growing economy this position is challenged in this article and it is concluded that the two concepts are in fact complements economic de growth is not a goal in itself but the rich north s path towards a globally equitable sse moreover the de growth literature can benefit from the strong economic historic roots of the sse and from daly s macroeconomic concepts while in return being able to give lessons about bottom up approaches this would be particularly important for the population issue where daly proposes limited birth licences unfortunately statements on demography are inconsistent and underdeveloped in the de growth literature further it is concluded that most criticisms of the sse are due to a too narrow and technocratic interpretation of the concept instead the sse should be defined as a quasi steady state resting in a dynamic equilibrium and as an unattainable goal which can and probably should be approximated

the sufficiency strategy would rich world frugality lower environmental impact abstract one alleged weapon against unsustainable environmental impact is for the wealthy to consume less this sufficiency strategy is to complement the efficiency strategy of lowering ratios of resource inputs to economic outputs the former would reduce the affluence factor in i pat the latter the technology factor that the latter strategy suffers from a consumption rebound is widely recognized this paper identifies a similar rebound when the affluence factor is autonomously lowered the lower initial demand lowers prices which in turn stimulates new demand by others the strategy moreover addresses only the rich raising questions of its theoretical maximum efficacy its proponents usually conflate frugality with the north south dichotomy and intra generational with inter generational equity moreover there are difficulties with the supporting arguments that frugality is good for one s own sake as well as for the environment and that the rich should lead the way to living more lightly personal behaviour change is furthermore not a substitute for international political efforts finally since all changes in right side factors of the i pat equation change other right side factors such indirect attacks on impact should be abandoned in favor of supply and emissions quotas