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The Tinbergen Hueting Approach in the Economics of Ecological Survival

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The Tinbergen Hueting Approach in the Economics of Ecological Survival Munich Personal RePEc Archive The Tinbergen Hueting Approach in the Economics of Ecological Survival Colignatus, Thomas Samuel van Houten Genootschap 9 March 2009 Online at https://mpra.ub.uni-muenchen.de/13899/ MPRA Paper No. 13899, posted 10 Mar 2009 05:47 UTC DRAFT The Tinbergen & Hueting Approach in the Economics of Ecological Survival Thomas Colignatus Samuel van Houten Genootschap 1 1st e ition, March ? 2009 Copyright ( Thomas H.A.M. Cool http://,,,. ata,eb.nl/-cool, cool. ata,eb.nl Colignatus is the preferre name of Thomas Cool in science. /a,ful e0ceptions e0clu e , nothing of this publication may be copie or publishe by means of print, photocopy, microfilm, electronics or other,ise, unless a ,ritten permit has been given by the la,ful o,ners of the copyright, an this also hol s for ,hole or partial re,or1ings. 2ehou ens uit3on ering oor e ,et gestel mag 3on er schrifteli41e toestemming van e rechthebben e5n6 op het auteursrecht niets uit e3e uitgave ,or en verveelvou ig en/of openbaar gemaa1t oor mi el van ru1, foto1opie, microfilm, electronica of an ers3ins, hetgeen oo1 van toepassing is op gehele of ge eelteli41e be,er1ing. Supporte by Samuel van Houten Genootschap 7etenschappeli41 bureau van het Sociaal /iberaal Forum Scientific bureau of the Social /iberal Forum http://,,,. ata,eb.nl/-cool/SvHG/SvHG.html 8ublishe by IS2N 90- JE/ A00 Ne erlan se uniforme genre in eling 5NUGI6 681, 65A & 691 CI8-GEGEBENS CONINC/IJCE 2I2/IOTHEEC ES-GRABENHAGE 2 Contents in 2rief Introduction 7 Roefie Hueting and Sustainable National Income 11 The choice on sustainability: information or the meta-S F approach to a shift of preferences 14 The Old Man and the SNI. A review of advance and adversity in Hueting*s research in economic growth and the new scarcity from the environment and sustainable national income (SNI, 21 The seminal contribution of Roefie Hueting to economic science: Theory and measurement of (environmentally, Sustainable National Income 57 On the political economy of environmental survival versus collapse. .larifying the wor/ done by Tinbergen 0 Hueting vis-1-vis eit2man, Nordhaus and Stern 44 56enuine Savings7 at the orld 8an/ 88 Reaction to 8:;rn Lomborg 92 .onclusions of this boo/ 97 Appendices 98 I than1 Roefie Hueting, 2art e 2oer an Thea Sigmon for their comments over some years no,. All errors remain mine. 3 Contents Introduction 7 The economics of ecological survival 7 The Tinbergen & Hueting approach 7 The contents of this boo1 8 /imitations of this stu y 9 Caveat 10 Roefie Hueting and Sustainable National Income 11 National accounts 11 Environmental functions 11 Deman an supply 12 T,o Guestions 12 Revolution in statistics 13 Conclusion 13 The choice on sustainability: information or the meta-S F approach to a shift of preferences 14 Intro uction 1A The environmental issue 1A 2asic concepts 15 Mo el 16 Graphs 17 Tables 17 Closer un erstan ing 19 Conclusion 20 Appen i0: 8rogram 20 The Old Man and the SNI. A review of advance and adversity in Hueting*s research in economic growth and the new scarcity from the environment and sustainable national income (SNI, 21 1. Intro uction 22 1.1 A topic in political economy 22 1.2 Ma1ing a compass for economic policy on the environment 2A 1.3 A gui ing iagram 25 1.A National accounting 27 1.5 A gui ing table 30 1.6 A summary e uction 31 2. The perio up to INe, Scarcity an Economic Gro,thJ 197A 33 3. Some conclusions from INe, Scarcity an Economic Gro,thJ 197A 3A A. Reception of INe, Scarcity an Economic Gro,thJ 35 A.1 On the positive si e 35 A.2 Si0 year elay in the publication of the English translation 35 A.3 No a option of the 1ey proposal 36 5. The perio up to the 2run tlan report 1987 37 5.1 SNI an eSNI 37 5.2 The notion of 5environmentally6 Sustainable National Income 5eSNI6 37 4 5.3 Hueting on the 2run tlan report 38 6. The perio up to the Hueting Congress 1999 38 6.1 Tinbergen & Hueting 1991 38 6.2 C2S an C82 38 6.3 Insi e C2S Statistics Netherlan s 1991-1999 A0 6.A eSNI an ecological economics A8 6.5 The Hueting Congress 1999 51 7. The perio up to 2008 51 7.1 Retirement 51 7.2 Dutch eSNI tren 1990-2000 52 7.3 The Stern Revie, 2006 52 7.A A misse chance for Germany an Eurostat 53 7.5 A mysterious isappearance of a crucial subsi y 53 8. Conclu ing remar1s 5A The seminal contribution of Roefie Hueting to economic science: Theory and measurement of (environmentally, Sustainable National Income 57 Intro uction 57 Setting 58 HuetingKs contribution 60 Conclu ing remar1s 63 Appen i0: Cost of calculating eSNI 6A On the political economy of environmental survival versus collapse. .larifying the wor/ done by Tinbergen 0 Hueting vis-1-vis eit2man, Nordhaus and Stern 44 Intro uction 66 The t,o approaches 67 Rightly scaring people 69 8ossibly entertaining people 72 Definitions of uncertainty an ris1 72 A fat tail is not nee e to get scare 73 Facts, of the past an of reality 7A Scenario analysis an cost-benefit analysis 75 The Sterner & 8ersson approach 76 A small note on calculating the amage 76 Rate of iscount 77 Nor haus an sustainability 77 Conclusion 79 Appen i0 A. 8ossibly entertaining people 5continue 6 80 Appen i0 2. Nor haus an sustainability 5continue 6 81 Appen i0 C. Nor haus 52007b6 on the role of fe eral statistical agencies 85 56enuine Savings7 at the orld 8an/ 88 7ea1 versus strong sustainability 88 Genuine Savings versus eSNI 89 Costs of calculation 91 Conclusion 91 Reaction to 8:;rn Lomborg 92 5A6 IThe s1eptical environmentalistJ, CU8 2001 92 Intro uction 92 Three angles 93 5 8oints in more etail 93 526 ICool itJ, Cnopf 2007 96 .onclusions of this boo/ 97 Appendices 98 Abstract 98 /iterature 99 In e0 106 4 Introduction The economics of ecological survival In this boo1, ecological survival is not an issue of rama but of governance an economics. The ,arnings by ecologists, an observations that everyone can rea or see an hear in the ne,sme ia, here are not consi ere by themselves but are only an inspiration to consi er economics an preparation of economicpolicy. It is relatively easy to emphasi3e the rama. The ,orl problems ,ith overpopulation an e0haustion of the environment gro, bigger by the eca e an are ra,ing the attention of national governments, citi3ens an researchers ali1e. E0tinction of species ta1es place at an accelerating rate. E0tinction of the human species itself is apparently not at sta1e though some authors relate that if bees are affecte then foo ,ill become rather scarce. For this boo1, ,e regar all these tales as li1ely interesting but not our focus of attention. For us, the focus is: if there ,oul be an issue of ecological survival, ho, ,oul economics eal ,ith it ? SubseGuently, ,e 3oom in on the Tinbergen & Hueting 519916 approach in comparison to other approaches. It is the approach in economics ,ith respect to the measurement of environmental sustainability. 7hen economic policy has a yar stic1 for environmental sustainability then ,e can etermine ,hich policies cause ecological isaster an ,hich policies steer to,ar s ecological survival. The Tinbergen & Hueting approach Tinbergen has been one of the foun ing fathers of national accounting, alongsi e ,ith Ceynes, Hic1s, Cu3nets, Mea e, Stone an others. Tinbergen 519856 for e0ample sho,s his a,areness of the phenomenon of counterproduction L ,hich Hueting no,a ay calles Iasymmetric entriesJ. 1 Hueting has been ,riting about environmental economics since the mi 1960s an receive early support from Tinbergen. Their 4oint statement is Tinbergen & Hueting 519916 an this ,illbe our focus. Since Hueting has been ,riting most e0plicitly about environmental economics this boo1 ,ill refer mostly to his separate ,or1 an only on occasion to the 4oint paper Tinbergen & Hueting 519916. In ee , the evelopment of the efinition of (envrionmentally) sustainable national income 5eSNI6 is also HuetingKs original contribution to economic 1 This is best e0plaine ,ith an e0ample. 7hen a car pollutes the air then ,e can install a catalyst to repro uce the previous clean air. Current metho s of the national accounts recor that the sale of the catalyst generates a flo, of income for ,ho pro uces that catalyst. In itself this is correct since the change from pollute air to clean air is an improvement. Ho,ever, the Guality of the air has not change from the original situation. The Icounterpro uctionJ by the car has to enter some,here too. The recor e income from the catalyst is better substracte from the suppose income from ma1ing the car. 7 science. The importance of the Tinbergen & Hueting 519916 paper ho,ever is that Tinbergen ,ith his bac1groun in national accounting an econometric mo elling fully en orses that approach an regar s it as a natural e0tension for his o,n ,or1 an for economics as a ,hole. Tinbergen originally helpe as ,ell in the etermination an selection of the 1ey aims in economic policy: balance bu get, stable prices, full employment, economy gro,th, a small surplus on the balance of payments to support evelopment assistance, more eGual istribution of income. Over the years governments have put ifferent accents an ,eights on these aims. In The Netherlan s economic gro,th ,as officially replace ,ith sustainable economic gro,th L but the notion of environmental sustainability seems to have got ilute .
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