A welfare economic approach to planetary boundaries
- The crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth’s regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetaryThe crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth’s regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetary scale. To do so, we develop a model framework and explore decision paradigms that give guidance to setting limits on human activities. This conceptual framework is then applied to planetary boundaries. We conclude by using the realized insights to derive a research agenda that builds on the understanding of planetary boundaries as global commons.…
Author details: | Michael Sureth, Matthias KalkuhlORCiDGND, Ottmar EdenhoferORCiDGND, Johan RockströmORCiDGND |
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DOI: | https://doi.org/10.1515/jbnst-2022-0022 |
ISSN: | 0021-4027 |
ISSN: | 2366-049X |
Title of parent work (German): | Jahrbücher für Nationalökonomie und Statistik |
Publisher: | De Gruyter Oldenbourg |
Place of publishing: | Berlin |
Publication type: | Article |
Language: | English |
Date of first publication: | 2023/03/16 |
Publication year: | 2023 |
Release date: | 2024/01/11 |
Tag: | cost-benefit analysis; cost-effectiveness analysis; global commons; planetary boundaries; precautionary principle; shadow price; uncertainty; welfare economics |
Volume: | 243 |
Issue: | 5 |
Number of pages: | 65 |
First page: | 477 |
Last Page: | 542 |
Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften |
Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre | |
DDC classification: | 3 Sozialwissenschaften / 31 Statistiken / 310 Sammlungen allgemeiner Statistiken |
3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft | |
Peer review: | Referiert |
Publishing method: | Open Access / Gold Open-Access |
License (German): | CC-BY - Namensnennung 4.0 International |