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Capitalism is in crisis and climate change disruption is now beginning to hit the bottom line. Insurance companies know this well. According to a report by the Bank of England, insured losses have risen from $10 000 million in 1985 to $50 000 million in 2015. Climate change cannot be reversed, and extreme weather events  will undoubtedly get worse in the future strengthening the disruptive effects shown in the CLD.  Another dynamic is that companies will continue to automate and, as The Economic Policy Institute has shown, fail to reflect  productivity gains in workers' salaries. The result, stagnating salaries is disastrous for demand, given that capitalism needs endlessly rising demand and consumption. A further serious problem is that as climate change gets worse there will be increasing demands for companies to assume their responsibility and bear the costs of negative externalities.  The CLD shows these factors which are likely to lead to the collapse of the system: when capitalism can no longer generate 'capital' it has stopped to serves any useful purpose. 

DOES THIS DYNAMIC SPELL THE END OF CAPITALISM
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An initial study of the economics of single use coffee pods.
Helene D. Coffee Pod Investigation
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Peak oil will occur when it is too expensive to bring oil to the surface and not when reserves reach their limit. Companies must make a profit to be able to extract oil and stay in the oil business.  However, that endeavour is becoming more and more difficult because of diminishing returns. They have to dig ever deeper to get to the oil  at ever increasing costs, and the oil they find deep down is of a lesser quality.  We have now reached a point where the price needed by oil companies to make a profit and stay in business is far higher than the price  the market can bear. That price is probably about $ 100 per barrel - and rising every year! A market price o $ 100 will almost certainly cause a sharp recession and cause the price of oil to fall back beyond the point of profitability. For example, the combined profit of ExxonMobile, Chevron and Conocophillips fell from 80.4 billion in 2011 to only 3.7 billon in 2016 - see URL below. What the market can bear depends on the spending power of the mass of non-elite workers. The CLD shows the negative feedback loops that prevent oil prices to rise above the level of  affordability. If non-elite workers cannot afford the goods and services offered,  then there will be no demand for them and by extension for oil.  In this situation the market price will not the cover the cost that oil companies need to extract oil. Oil supplies will decline and so will economic activity!

https://srsroccoreport.com/the-blood-bath-continues-in-the-u-s-major-oil-industry/

THE PRICE TRAP AND PEAK OIL
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This Insight model is the last in a series of models that examine the dynamics of population growth and decline in a simple environment.  The first model can be found here.  It follows on from a series of three Insights that introduce the basic concepts of Systems Dynamics that can be found here.

The model refines the concept of carrying capacity by introducing dynamic resources that the population depends on to thrive.

The models are based on the activities from an Open University short course that can be accessed here.
Understanding the Environment 101: Activity 5C Overshoot and Collapse
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Самостаятельная работа часть 1 Акилбеков Асет
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An initial study of the economics of single use coffee pods.
Real Coffee Pods ISD Humanities v 1.02
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This insight shows the impacts of a renewawble portfolio standard on energy prices and electricity mix. It includes features such as REC pricing, clearing auctions for electricity, and distributed generation.
RPS Simulator
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Socio-Economic Factors
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Goodwin Model:
This is a basic version of the Goodwin Model based on Kaoru Yamagushi (2013), Money and Macroeconomic Dynamics, Chapter 4.5 (link)

Equilibrium conditions:
  • Labor Supply = 100
Devation from the equilibrium conditions generates growth cycles.
Goodwin Model
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Socio-economic
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LS Greenway
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clone economics price product
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This page provides a structural analysis of POTUS Candidate Jim Webb. The method used is Integrative Propositional Analysis (IPA) available: ​ http://scipolicy.org/uploads/3/4/6/9/3469675/wallis_white_paper_-_the_ipa_answer_2014.12.11.pdf
DRAFT IPA of Jim Webb POTUS candidate economic policy
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Scott Page's Aggregation diagram from Complexity and Sociology 2015 article see also IM-9115 and SA IM-1163
Macro micro dynamics
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Economic Cost-Benefit Analysis- Roadkill Mitigation
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Overview

The model shows the industry connection and conflict between Forestry and Mountain Tourism in Derby, Tasmania. The objective of this simulation is to find out the balance point for co-exist.

 

How Does the Model Work?

Both industries can provide economic contribution to Tasmania. Firstly, selling timbers through logging would generate income. Also, spendings from mountain bike riders would generate incomes. However, low tree regrowth rate can not cover up logging, which influences the beautiful vistas and riders' experiences. While satisfaction and expectation depend on vistas and experience, the demand of mountain biking would be influenced through repeat visits and world of mouth as well.

 

Interesting Insights

Although forestry can provide a great amount of economic contribution to Tasmania, over logging goes against ESG framework as well as creating conflict with mountain tourism. As long as the number of rider visits is stable, tourism can always provide a greater economic contribution compared to forestry. Therefore, the government should consider the balance point between two industries.

Simulation of Derby Mountain Bikes versus Forestry
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This page provides a structural analysis of POTUS Candidate Martin O'Malley based on the information at: https://martinomalley.com/vision/​ The method used is Integrative Propositional Analysis (IPA) available: ​ http://scipolicy.org/uploads/3/4/6/9/3469675/wallis_white_paper_-_the_ipa_answer_2014.12.11.pdf
DRAFT IPA of Martin O'Malley Economic Policy
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Simple model of the global economy, the global carbon cycle, and planetary energy balance.

The planetary energy balance model is a two-box model, with shallow and deep ocean heat reservoirs. The carbon cycle model is a 4-box model, with the atmosphere, shallow ocean, deep ocean, and terrestrial carbon. 

The economic model is based on the Kaya identity, which decomposes CO2 emissions into population, GDP/capita, energy intensity of GDP, and carbon intensity of energy. It allows for temperature-related climate damages to both GDP and the growth rate of GDP.

This model was originally created by Bob Kopp (Rutgers University) in support of the SESYNC Climate Learning Project.
Clone of Simple Climate-Carbon-Economic Model
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Clone of Pesticide Use in Central America for Lab work


This model is an attempt to simulate what is commonly referred to as the “pesticide treadmill” in agriculture and how it played out in the cotton industry in Central America after the Second World War until around the 1990s.

The cotton industry expanded dramatically in Central America after WW2, increasing from 20,000 hectares to 463,000 in the late 1970s. This expansion was accompanied by a huge increase in industrial pesticide application which would eventually become the downfall of the industry.

The primary pest for cotton production, bol weevil, became increasingly resistant to chemical pesticides as they were applied each year. The application of pesticides also caused new pests to appear, such as leafworms, cotton aphids and whitefly, which in turn further fuelled increased application of pesticides. 

The treadmill resulted in massive increases in pesticide applications: in the early years they were only applied a few times per season, but this application rose to up to 40 applications per season by the 1970s; accounting for over 50% of the costs of production in some regions. 

The skyrocketing costs associated with increasing pesticide use were one of the key factors that led to the dramatic decline of the cotton industry in Central America: decreasing from its peak in the 1970s to less than 100,000 hectares in the 1990s. “In its wake, economic ruin and environmental devastation were left” as once thriving towns became ghost towns, and once fertile soils were wasted, eroded and abandoned (Lappe, 1998). 

Sources: Douglas L. Murray (1994), Cultivating Crisis: The Human Cost of Pesticides in Latin America, pp35-41; Francis Moore Lappe et al (1998), World Hunger: 12 Myths, 2nd Edition, pp54-55.

Clone of REM 221 - Causal Loop diagramming
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Summary of Ch 17 of Mitchell Wray and Watts Textbook see IM-164967 for book overview
Unemployment and Inflation
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FORCED GROWTH GROWTH GOES INTO TURBULENT CHAOTIC DESTRUCTION 
 BEWARE pushing increased growth blows the system!
(governments are trying to push growth on already unstable systems !)

The existing global capitalistic growth paradigm is totally flawed

The chaotic turbulence is the result of the concept and flawed strategy of infinite bigness this has been the destructive influence on all empires and now shown up by Feigenbaum numbers and Dunbar numbers for neural netwoirks

See Guy Lakeman Bubble Theory for more details on keeping systems within finite limited size working capacity containers (villages communities)

FORCED GROWTH INTO TURBULENCE
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The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market. 

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand. 

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve. 

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.
Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)
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Description:

Model of Covid-19 outbreak in Burnie, Tasmania

This model was designed from the SIR model(susceptible, infected, recovered) to determine the effect of the covid-19 outbreak on economic outcomes via government policy.

Assumptions:

The government policy is triggered when the number of infected is more than ten.

The government policies will take a negative effect on Covid-19 outbreaks and the financial system.

Parameters:

We set some fixed and adjusted variables.

Covid-19 outbreak's parameter

Fixed parameter: Background disease.

Adjusted parameters: Infection rate, recovery rate. Immunity loss rate can be changed from vaccination rate.

Government policy's parameters

Adjusted parameters: Testing rate(from 0.15 to 0.95), vaccination rate(from 0.3 to 1), travel ban(from 0 to 0.9), social distancing(from 0.1 to 0.8), Quarantine(from 0.1 to 0.9)

Economic's parameters

Fixed parameter: Tourism

Adjusted parameter: Economic growth rate(from 0.3 to 0.5)

Interesting insight

An increased vaccination rate and testing rate will decrease the number of infected cases and have a little more negative effect on the economic system. However, the financial system still needs a long time to recover in both cases.

BMA708_Assignment 3_Nguyen Dang Khoa Vo_520272_COVID-19 outbreak and Burnie economy