In this paper, we propose an Agent-Based Stock-Flow Consistent model combined with an Input-Output (IO) structure of production. In the model, heterogeneous firms interact in the energy, material, capital and consumption markets. Materials for production of consumer goods can be manufactured...

A transition to a low-carbon economy requires moving to the production of goods that are less energy- and material-intensive than current practices. This may prove difficult, as producer objectives may not align with reducing pollution, unless this is a consumer priority, or is imposed by...

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...

In an effort to develop "sustainability economics" Baumgärtner and Quaas (2010) neglect the central concept of environmental economics-"environmental externality". This note proposes a possible connection between the concepts of environmental externality and sustainability. In addition,...

This paper argues that evolutionary thinking and modeling can contribute to the emerging research on sustainability transitions and their management. Evolutionary theory provides a range of concepts and mechanisms that are useful in making existing theorizing about transitions more precise and...

Many well-intended climate-energy strategies are ineffective in the absence of serious environmental regulation. This holds, among others, for direct support of clean energy, voluntary energy conservation, technical standards on a limited set of products, unilateral stringent carbon pricing, and...

It is well-known that energy conservation can lead to rebound effects that partly offset the original energy savings. One particular rebound mechanism is re-spending of money savings associated with energy savings on energy intensive goods or services. We calculate the average magnitude of this...

Standard economic theory regards capital and labour as the main factors of production that satisfy the “cost-share theorem”. This paper argues that when a third factor, namely energy, is added physical constraints on substitution among the factors arise. We show that energy is a much more...

The notion of dynamic, endogenous diversity and its role in theories of investment and technological innovation is addressed. We develop a formal model of an innovation arising from the combination of two existing modules, with the objective to optimize the net benefits of diversity. The model...

The damage function in the famous climate-economy model DICE has received much criticism. Weitzman (2010) has proposed an alternative approach that gives more serious attention to climate change impacts for larger temperature increases. We calculate optimal climate policy with DICE using this...