To maintain economic wealth (roads, hospitals, power
lines, etc.) power needs to be consumed. The same applies to economic activity,
since any activity requires the consumption of energy. According to the Environmental Protection Agency, the burning
of fossil fuels was responsible for 79 percent of U.S. greenhouse gas emissions
in 2010. So whilst economic
activity takes place fossil fuels will be burned and CO2 emissions are
unavoidable - unless we use exclusively renewable energy resources, which is
not likely to occur very soon. However, the increasing CO2 concentrations in
the atmosphere will have negative consequences, such droughts, floods, crop
failures, etc. These effects represent limits to economic growth. The CLD
illustrates some of the more prominent negative feedback loops that act as a
break on economic growth and wealth. As the negative feedback loops (B1-B4) get stronger, an interesting question is, 'will a sharp reduction
in economic wealth and unavoidable recession lead to wide-spread food riots and disturbances?'
LIMITS TO ECONOMIC GROWTH AND PROMINENT NEGATIVE FEEDBACK LOOPS
A Tragedy of the Commons situation exists whenever two or more activities, each, which in order to produce results, rely on a shared limited resource. Results for these activities continue to develop as long as their use of the limited resource doesn't exceed the resource limit. Once this limit is reached the results produced by each activity are limited to the level at which the resource is replenished. As an example, consider multiple departments with an organization using IT resources, until they've exhausted IT capacity.
Environmental economics Niger Delta oil polluted case study
This is Figure 6 from Lancastle, N. (2012) 'Circuit Theory Extended: The Role of Speculation in Crises' based on Keen, S. (2010). Solving the Paradox of Monetary Profits.
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.
WIP of several books of Karl Polanyi's thoughts and papers around social science economic history and capitalism. . See also Summary of the Great Transformation IM-10640
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.
Adjusted parameter: 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.
WIP Overview model structures of Khalid Saeed's 2014 WPI paper Jay
Forrester’s Disruptive Models of Economic Behavior See also General SD and Macroeconomics CLDs IM-168865
Added several versions of the model. Added a flow to make C increase. Added a factor to be able to change the value 0.5. Older version cloned at IM-46280
Circularity in Economic models including Exports and Imports
The term 'work' has been used in this model in the sense of economic activity to include not only
work done by people but also by machines. The model shows 8 positive
feedback loops that reinforce work and the need to work. From the perspective of physics, civilisation can be described as a MECHANISM FOR USING ENERGY AND DOING WORK.
Work, however, has some unavoidable consequences. The second law of thermodynamics
tells us that any ‘work’ requires the use of energy and that DOING WORK entails
the generation of WASTE HEAT. The laws of physics also tell us that CO2 emissions from burning fossil fuels will cause global warming. These unintended
and unavoidable consequences are highlighted in the model by prominent arrows.
Can
the structure of this system be changed to avoid a foreseeable collapse of civilisation?
Do economic activity and work unavoidably lead to doom?
