| Author: | Reinout Heijungs |
| Title: | Economic Drama and the Environmental Stage. Formal Derivation of Algorithmic Tools for Environmental Analysis and Decision-Support from a Unified Epistemological Principle |
| Institution: | Leiden University (Centre of Environmental Science) |
| Date: | 3 September 1997 |
| Advisor: | prof. H.A. Udo de Haes, prof. L. Hordijk |
| Key Words: | environmental decision-support, economic models, environmental models, epistemology, life-cycle assessment, substance-flow analysis |
| How to Obtain: | A small number of copies is still available for NLG 40.00 at Centre
of Environmental Science:
E. Philips
Furthermore, a commercial edition will be published at Edward Elgar, Cheltenham, under the title "A Theory of the Environment and Economic Systems." |
| Abstract: | In environmental policy, one is often confronted with the question
which environmental problems are associated with which economic activity.
The answer to this question is often unclear. On the one hand there is
of course a limited knowledge of certain environmental issues. More fundamental,
however, is the question who is "responsible", in a well-defined sense,
for what. For instance, electric power plants emit carbon dioxide, but
they do it because other industries and households exert a demand for electricity.
Another example is the case that some countries are cutting down their
rain forests to satisfy the import demands of other countries. A question
is now: who is polluting or depleting where and for whom?
To answer this question, a number of tools for environmental decision-support have been developed, including life-cycle assessment, substance-flow analysis, environmental mpact assessment, and risk assessment. Many of these tools have different economic entities (a product, a regional substance-flow, a factory, a use and emission pattern of a substance, etc.) as their object. It has proven to be difficult to reconcile all these different points of view on environmental problems and put them into a single perspective. This study addresses two main questions: The attribution problem: which environmental problems are to be attributed to which economic activity? The position problem: what is the position of a number of the various tools for environmental decision-support? It does so by building a selected number of tools for environmental analysis and decision-support from unified principles. The principles are the elements that are first discussed: the epistemological basis of all further scientific analysis and synthesis is one of linear attribution. It is stated that current environmental problems are caused by current economic activities, and that certain formal requirements (such as 100%-additivity) lead directly to this linear attribution rule. It is important to realize that the attribution problem cannot be solved by experimental methods, and that the answers given by no means pretend to explain anything in terms of either natural science or social science. It is merely a mathematical structure that to some extent is based on a number of postulated properties. Part 2 develops from the principle of linear attribution the concept of economic processes as activities that convert economic and environmental commodities into other economic and environmental commodities. The operating time of the economic process is a central element in this discussion: it determines how much "utility" is produced and how much environmental intervention is generated in doing so. Another important step is the clustering of several economic processes
into a larger economic process or system. In the end, two modes of analysis
are developed from this consideration: commodity-flow accounting,
in which the operating times of all the economic processes within a certain
region are set to a fixed and equal time period, e.g., one year; activity-level
analysis, in which the operating times of the processes within the cluster
are determined by a specified external demand. This crossroad of
analytical thoughts leads to the derivation of the inventory analysis of
the tools of life-cycle assessment and substance-flow analysis. Moreover,
the relationships with a number of other tools, in
This brings us to a description of the exchange of matter between economy
and environment, but not further. For a subsequent analysis of environmental
consequences, the concept of environmental processes must be introduced.
In one respect these are similar to economic processes: they also convert
economic and environmental commodities into economic and environmental
commodities. In another respect, however, they are quite
Part 4 gives answers to the two main questions of this thesis. The attribution problem is solved by summarizing the formal unified structure of a number of tools for environmental analysis and decision-support. The position problem is answered by a comparative analysis of the different tools. The study ends with a number of further questions and some more philosophical reflections. The specific question addressed in this study was the attribution problem, which was introduced as the question of which environmental problems are to be attributed to which economic activities. It is shown that the question of attribution is only one of the questions that can be posed in connection with environmental analysis and decision-support, and that other questions, in particular with respect to planning and scenario analysis, require distinctive epistemological principles, thereby leading to different implementations of the same tools of life-cycle assessment, substance-flow analysis, et cetera. Moreover, the chosen epistemology is indeed a chosen one, and certainly not the only one. We therefore end up with a rather confusing situation: the question of the environmental friendliness of a certain economic activity cannot be unambiguously answered, as there are many competing truths. All of these truths correspond to a certain interpretation of the question. Should the activity be seen in a life-cycle perspective, in a substance-flow perspective, or as an independent entity? Are we considering an additional activity, or an average existing one? Despite these open questions, the study can be seen as developing a foundation for a number of tools for environmental analysis and decision-support, a foundation which leaves minimum scope for ambiguities, inconsistencies, and arbitrariness. |