Neoclassical Economics and Social and Ecological Complexity - Essay Example

Questions Natural Sciences and Economics Natural sciences are focused on the use of physical flows and natural services as a means of defining sustainability. This implies that the maintenance of sustainability is based on strict standards that are steeped in defining the right volumes of the exploration of natural resources in order to attain the right results in levels of physical flows. This implies that the natural sciences use various variables and models that are used to examine and evaluate the right volume and quantity that will be of value to all the stakeholders over a period in the future. Economics on the other hand views sustainability in relation to value because Economics fundamentally examines the relationships between ends and scarce means. Hence, the scope of Economics covers the ability to maintain a financial worth of the products and services over a period of time when they are demanded and needed by constituents of the society and the community. This has to do with elements and aspects of behavioural matters and behavioural techniques that are used by the various constituents as a means of examining and evaluating various variables to identify the way people seek to maximise their ends in relation to the resources available at every point in time. Hence, the position taken by Economics is one that utilises aspects of the rational human being and how s/he seeks to maximise returns of a given stock of resources as opposed to the natural science approach which uses scientific methods to estimate the stock of natural resources without the inclusion of human sentiments and human expectations. Question 2: Neoclassical Economics and Social and Ecological Complexity Neoclassical Economics is about the use of various aspects of rationality to attain maximum returns from a given level of resources. Thus, the neo-classical Economists argue that the rational consumer must seek to attain the most from a given level of inputs whilst the rational producer also produces the highest volume of products with a given volume of stocks. Thus, in viewing this, neo-classical Economics are meant to provide a framework within which people will gain the most from what they utilise or seek to use. Thus, the two concepts and the two ideas are synthesised to suggest that neo-classical economics seeks to support a position where the society work to attain the most from the environment. Social and Ecological complexity on the other hand asserts that there must be some degree of sensitivity to the consumption of natural resources and in utilising aspects of the natural environment. Hence, the consumer will have to ensure that he does things in such a way and manner that they are sensitive to the needs and demands of the natural occurrence of resources. Also, they must have in mind the needs of other stakeholders, not just to seek to make optimal profits, but to be sensitive to the needs of other persons and parties connected to the organisation as well as elements of future generations. Question 3 Writer’s View on Ideal Economics for Sustainability In my view, the ideal economics for sustainability is one that takes into consideration the future growth and the future status of the organisation and not just the present results or the need for profitability. This is because the tilt towards a pure Capitalist Economics model will mean a firm or producers within an economy will seek to maximise profits. This will mean they will only think of stockholders to the neglect of other stakeholders. However, in the event of a firm failing to recognise the needs of other stakeholders, there is the general problem that comes up with the fact that most of these stakeholders either seek to sabotage the organisation or they simply fail to deliver what they are due to deliver to the firm. Hence, the firm does well in the short run but fails to attain the right results in the long run. Therefore, it is my view that the ideal Economics of Sustainability is one in which a firm looks at a futuristic and a longer term horizon of operations. Hence, the firm will integrate important aspects of the immediate circumstances and situations that exists and also make changes in order to integrate important elements and important aspects of the wider group of stakeholders in order to attain a kind of equilibrium or balance in which they will be able to work hard and please all stakeholders who might want to work towards the success of the firm or the organisation into the long-run. Question 4: Carbon Price and the Reduction in Greenhouse Emissions In theory, carbon price or carbon tax is meant to get firms to cut down on their consumption and their usage of natural resources. In other words, carbon price is meant to discourage firms that pollute the environment as a means of cutting down on the kind of emission they do and also observe their environmental footprints in order to utilise better systems and processes.. Basically, on the macro level, an industry might want to simply transfer the effects and impacts of their economic costs and their losses to consumers. This because in an industry where there are numerous firms that emit high levels of pollutants, all the other stakeholders and players in the industry might want to fix high prices and get consumers to pay. Hence, they will not be affected much by the carbon taxes they pay. On the micro level though, if the emissions hit some firms in an industry and does not affect other firms, the carbon pricing will form a basis for attaining and maintaining competitive advantage. And this will influence the way and manner in which firms can attain their results and meet their ends. This will somewhat be meaningful. Therefore, it is conclusive that carbon pricing might work, depending on the circumstances within which the carbon pricing is implemented. If it targets specific firms that are nonchalant, then, it is likely to work. However, if it is used to target whole industries, the industry might simply transfer it to their consumers. Question 5: Evaluation of CBA and other crude tools for examining Economic matters The Cost Benefit Analysis model is a tool that matches costs and benefits in order to examine the worth of a given project or process. Normally, CBA is carried out by using financial variables and financial matters. This is because such factors are easily quantifiable and can be evaluated and analysed in a much more objective way and manner. On the other hand, using this model of quantification means that many variables and important matters and subjects 5- Economic tools such as cost-­‐benefit analysis and discounting are often criticised for being crude in that they do not fully capture all dimensions of human decision-­‐making. Is this a fair criticism or are economic assumptions about human behaviour actually more accurate than we like to think? 6- What are the pros and cons of subjecting sustainability issues (e.g. climate change, depletion, equity) to an economic calculus? Read More