Many environmental damages are caused by substances which come into existence as undesired joint outputs in the production of desired goods. Whether an output is desired or not, however, is not an inherent property of the substance itself but depends on the context of production. This book studies the role of a potential ambivalence of joint outputs for the description and analysis of dynamic economy-environment interactions and for the design of efficient environmental policy. This is done in an interisciplinary way: methods and insights from thermodynamics, engineering sciences, economics and the methodology of economics are combined in order to develop an encompassing view on the complex and multivarious phenomenon of ambivalent joint production. By using the concept of joint production as a unifying framework for describing and analyzing the relations between human economic activity and the surrounding natural environment this book contributes to a critical and constructive assessment of the traditional environmental economic approach.

Inhalt

1 Introduction.- 1.1 The issue under study.- 1.1.1 Joint production.- 1.1.2 Joint products and the natural environment.- 1.1.3 Ambivalence of joint products.- 1.1.4 Dynamic economy-environment interactions.- 1.1.5 The state of knowledge and ignorance.- 1.2 Scope and method of analysis.- 1.2.1 Defining the basic terms.- 1.2.2 Scope of analysis.- 1.2.3 Aim of this work.- 1.2.4 Environmental Economics and Ecological Economics.- 1.2.5 An interdisciplinary approach.- 1.2.6 Analytical features.- 1.3 Preview of the argument.- I The Phenomenon of Joint Production.- 2 Joint production and the natural environment.- 2.1 The macro-dimension of joint production.- 2.2 The cogeneration of electricity and heat: Ambivalence of joint products.- 2.3 The impact of joint products over time.- 2.3.1 Flow pollution vs. stock pollution.- 2.3.2 The emission of carbon dioxide, methane and nitrous oxide: The anthropogenic greenhouse effect.- 2.3.3 The emission of sulfur dioxide: Acid rain.- 2.3.4 The impact of joint products over time: Conclusion.- 2.4 Sulfuric acid: Joint products as the origin of structural change.- 2.5 Conclusion.- 3 Thermodynamics.- 3.1 Phenomenological thermodynamics.- 3.1.1 Thermodynamic systems.- 3.1.2 Conservation of energy.- 3.1.3 Conservation of matter.- 3.1.4 Degradation of energy.- 3.2 Statistical mechanics.- 3.2.1 Boltzmann's notion of entropy.- 3.2.2 Phenomenological versus statistical view.- 3.3 Time-irreversibility.- 3.3.1 Reversible time.- 3.3.2 Time-irreversibility in isolated systems: heat death.- 3.3.3 Time-irreversibility in open systems: complexity through self-organization.- 3.3.4 Thermodynamics and time-irreversibility.- 3.4 Conclusion.- 4 All production is joint production.- 4.1 The fundamental factors of production.- 4.2 The thermodynamic view of production.- 4.2.1 Production as a transformation of energy and matter.- 4.2.2 First and Second Law constraints.- 4.2.3 A 'toy model' of industrial production processes.- 4.2.4 Joint production as a consequence of the First Law.- 4.2.5 Joint production as a consequence of the Second Law.- 4.2.6 Some comments on the generality of the employed toy model.- 4.3 Implications and applications of the model.- 4.3.1 Relationship among the joint outputs.- 4.3.2 Relationship among the inputs.- 4.3.3 Substitutability vs. complementarity of inputs.- 4.3.4 Relationship between inputs and outputs and thermo-dynamic limits to technical progress.- 4.4 Conclusion.- II The Analysis of Joint Production in the History of Economic Thought.- 5 The classical position and its early critics.- 5.1 Adam Smith: The case of joint production requires special patterns of explanation.- 5.2 John Stuart Mill: Demand and supply.- 5.3 Conclusion.- 6 The abandonment of classical theory.- 6.1 Johann Heinrich von Thünen: Ambivalent joint production.- 6.2 Karl Marx: Joint products as waste.- 6.3 William Stanley Jevons: Marginal utility explains the demand for joint outputs.- 6.4 Conclusion.- 7 Neoclassical theory from partial to general equilibrium analysis.- 7.1 Alfred Marshall: Substitution in supply.- 7.2 Heinrich von Stackelberg: Analogies to the case of single production.- 7.3 John von Neumann: Duality of process intensities and prices.- 7.4 Arrow/Debreu: The production set.- 7.5 Welfare analysis: Harmful joint outputs.- 7.6 Conclusion.- 7A Von Neumann's model of linear production.- 8 The role of joint production for the construction of economic theory.- 8.1 Summary of chapters 5 to 7.- 8.2 Critical appraisal.- 8.2.1 Empirical relevance.- 8.2.2 Analytical treatment.- 8.3 Interpretation.- 8.3.1 Two different strategies for the construction of economic theory.- 8.3.2 The structuralist research program.- 8.4 Conclusion.- III The Economics of Ambivalent Joint Production.- 9 The concept of joint production.- 9.1 The notion of joint production in the literature.- 9.1.1 Joint production in the economic literature.- 9.1.2 Joint production in the business administration literature.- 9.2 A formal definition of joint production.- 9.2.1 Definition.- 9.2.2 Properties of the definition.- 9.3 Subjective elements in the description of production.- 9.3.1 The observer's interest: Is really all production joint production?.- 9.3.2 The valuation by economic agents: Why is the production process carried out?.- 9.3.3 Conceptual separation between the description of production and the valuation of outputs by economic agents.- 9.4 Aspects of joint production.- 9.4.1 Fixed and flexible joint production.- 9.4.2 Ambivalent joint production.- 9.5 Conclusion.- 10 Ambivalence of joint products.- 10.1 A model with joint externalities.- 10.1.1 Specification of the model.- 10.1.2 The transformation curve.- 10.1.3 Optimal allocation and shadow prices.- 10.1.4 Ambivalence of the intermediate product (I).- 10.2 Solution of the model.- 10.2.1 Scenario 1: No emissions.- 10.2.2 Scenario 2: Final emissions.- 10.2.3 Scenario 3: Joint emissions.- 10.3 Summary of model results.- 10.3.1 Optimal a.- 10.3.2 Ambivalence of the intermediate product (II).- 10.4 Environmental policy with joint emissions.- 10.4.1 Regulation under complete knowledge.- 10.4.2 Incomplete knowledge and learning by doing.- 10.5 Conclusion.- 10.5.1 What determines the value of joint outputs?.- 10.5.2 The implication for environmental policy.- 10.5.3 The implication for economic modeling.- 10A Determining equation for ?.- 10B Solution for the three scenarios.- 10B.1 Solution in scenario 1.- 10B.2 Solution in scenario 2.- 10B.3 Solution in scenario 3.- 11 Joint products and irreversibility.- 11.1 Notions of irreversibility in production theory.- 11.1.1 Thermodynamic irreversibility.- 11.1.2 Koopmans' notion of irreversibility.- 11.1.3 Debreu's notion of irreversibility.- 11.1.4 Dated goods vs. complete representations.- 11.2 Production and capital accumulation.- 11.2.1 Reversible capital theory.- 11.2.2 Joint products and irreversible capital accumulation.- 11.3 Economic and thermodynamic views on irreversibility.- 11.4 Conclusion.- 12 Non-convexity of the production set.- 12.1 Detrimental joint products and negative externalities.- 12.1.1 Competing uses of the environment.- 12.1.2 A simple model of a two-sector-economy.- 12.2 Baumol type externalities.- 12.2.1 The argument of Baumol and Bradford.- 12.2.2 Formal analysis of the transformation curve.- 12.2.3 Generalization to n production processes.- 12.3 Different types of externalities.- 12.3.1 Different types of negative externality.- 12.3.2 Two examples.- 12.3.3 Different types of non-convexity.- 12.3.4 Negative externalities and non-convexities: summary.- 12.4 The consequences of a non-convex production possibility set.- 12.4.1 Non-convexity at the level of individual firms and at the level of the economy.- 12.4.2 Existence of a general competitive equilibrium.- 12.4.3 First welfare theorem.- 12.4.4 Second welfare theorem.- 12.4.5 Second order conditions: Welfare maximum or minimum?.- 12.5…