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Facts in Environmental and Energy Economics: Models and Practices, Past and Present.

Editors of special issue: Guido Erreygers (University of Antwerp), Marion Gaspard (Lyon 2 University), Antoine Missemer (CNRS).

Expression of interest: January 15th 2019.

Notification by the editors: January 30th 2019.

Deadline for submission of full papers: June 30th 2019.

Planned publication of the issue: 2020.

The relations between theories, models, values and facts are regular concerns in economics. In environmental and energy economics, the issue may appear quite specific since facts are multidimensional: not only economic variables, individual and social behaviours, but also biophysical dynamics, geological constraints, climate-economy interactions, and so on, enter the scene. It is therefore a field that may imply peculiar methodological questions in economics—related to intertemporal representations, uncertainty, projections or incomplete validation protocols—but also questions associated to the need to collaborate with other scientific fields (climatology, biology, physics and political sciences, among others).

This call for papers invites original contributions on the way environmental and energy economics conceive, construct and refer to “facts”. The editors expect contributions not only from specialists in economic philosophy, methodology and history of economic thought, but also from theoretical or applied economists and from historians involved in interdisciplinary studies. Contributors are encouraged to confront the particular questions concerning the construction and the representation of facts in their own field of specialization: facts can stylized or can proceed from gross data and various statistical or econometric treatments; they can be obtained through experimental protocols or simulations in their own field of specialization. The special issue will bring together various works on past and present experiences. It aims to foster the dialogue between creators or users of models and historians to better define and understand the challenges of environmental and energy economics today in its confrontation with the complexities of socio-economic and biophysical interactions.

Environmental and energy economics have now a long history. Resources and pollution have been subjects of economic research at least since the 19th century (Jonsson, 2013; Kula, 1998; Missemer, 2017; Robinson, 1989; Schabas, 2005; Wolloch, 2016). On energy, the industrial revolution boosted reflections on coal dependency (Jevons, 1865; H. S. Jevons, 1915), later replaced by the first analyses of the oil market (Ise, 1926; Stocking, 1925). On pollution, the classic contributions of Pigou (1912; 1924) were the cornerstone of the theoretical proposals until the development of the Coasean approach (Coase, 1960; see also Dales, 1968) based on property rights and transaction costs.

Concerning the relation between models and facts, the case of exhaustible resources is particularly relevant. Until the 1920s, economists involved in research on exhaustible resources mostly tried to propose theoretical mechanisms that took into account some facts (physical or economic limits to ore extraction, technological inertia). In the 1920s, a split occurred between a theoretical direction, on the road to Hotelling’s 1931 model, and an empirical direction interested in measuring the coupling between energy consumption and economic activities (Tryon, 1927; Tryon and Eckel, 1932). These two directions survived all along the 20th century (e.g. controversies between models à la Hotelling and models à la Hubbert in the peak oil literature—see Jakobsson et al., 2014; Livernois, 2009; Slade and Thille, 2009). On pollution, missing data obliged economists to substitute the classic Pigouvian perspective, or even some Coasean intuitions, by cost-effective second bests in the design of regulation measures (e.g. Baumol, 1972; Baumol and Oates, 1971). This suggests that even when it is an abstraction, a model needs facts to have an operative effect.

Beyond the resources and pollution issues, another topic deserves to be mentioned: energy systems, in particular electricity. From the late 1940s onwards, marginal cost pricing and other theoretical innovations found very practical applications on the electricity market. This may highlight that some phenomena (e.g. electricity as a homogenous good, with no stock effect, etc.) are more amenable to theoretical abstractions than others (e.g. oil, which is heterogeneous in its concrete forms).

Today, environmental and energy economists may still wonder ‘What and How to do with facts’. Past treatments of this question had an influence on current practices. But facts in the 21st century also convey their own methodological issues. Climate change is a systemic issue; measuring its impact requires the incorporation of both economic and biophysical data. This is the role of integrated assessment models, which historically emerged in various communities, some of them not alien to the energy systems tradition. Integrated Assessments Models (IAMs) face new questions in relation to their articulation with facts (interdisciplinary dialogue, incorporation of material flows in economic frameworks, connection between empirical findings on climate damage and damage functions in the models, etc.).

4. Items

The call is open to all proposals related to the topic described above. After submission, the full papers will go through a complete peer-review process, following the usual rules of the journal. The following questions illustrate some issues that could be addressed:

  • What are the different methods to incorporate facts in environmental and energy models? And what are the difficulties and successes of these methods? These questions could be treated through examples of particular models (IAMs or others).

  • How was the relation between theories, models, and facts conceived in the history of environmental and energy issues? What lessons can be drawn from this?

  • To what extent do missing data change the perspective of modellers from normative cost-benefit analysis towards cost-effectiveness operational research?

  • How did the development of expertise in the second half of the 20th century change the bridging of the gap between models and facts in environmental and energy economics?

  • How do modellers incorporate future facts in their forecasting or scenario exercises? To what extent is it possible to build such future facts? More broadly, how do economists construct and select the accurate (past, present or future) facts which they want to include in their analysis?

  • What does empirical validation mean for environmental and energy economics? Are there specific issues related to empirical validation in this particular field?

Procedure and timeline: Researchers who would like to be considered for participation in this special issue of Œconomia should submit, via email attachment, the paper title, an extended (1000-1500 words) abstract, and the affiliations of all authors. This information should be sent to oeconomia@openedition.org and is due by January 15th 2019. Authors whose contributions are selected will be notified by January 30th, 2019. Full papers will be due by June 30th, 2019 and will go through the normal refereeing process of Œconomia. Publication of the special issue is planned for 2020. For further information, please contact the editors or send a message to oeconomia@openedition.org.

References

References

Baumol, William J. 1972. On Taxation and the Control of Externalities. American Economic Review, 62(3): 307-322.

Baumol, William J. and Wallace E. Oates. 1971. The Use of Standards and Prices for Protection of the Environment. Swedish Journal of Economics, 73(1): 42-54.

Coase, Ronald H. 1960. The Problem of Social Cost. Journal of Law and Economics, 3(1): 1-44.

Dales, John H. 1968. Pollution, property and prices. An essay in policy-making and economics. Toronto: University of Toronto Press.

Hotelling, Harold. 1931. The Economics of Exhaustible Resources. Journal of Political Economy, 39(2): 137-175.

Ise, John. 1926. The United States Oil Policy, New Haven: Yale University Press.

Jakobsson, Kristofer, Bengt Söderbergh, Simon Snowden, and Kjell Aleklett. 2014. Bottom-up Modeling of Oil Production: A Review of Approaches. Energy Policy, 64: 113-123

Jevons, Herbert Stanley. 1915. The British Coal Trade, London: London and Norwich Press.

Jevons, William Stanley. 1865. The Coal Question. An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of our Coal Mines, London: MacMillan.

Jonsson, Frefrik A. 2013. Enlightenment’s Frontier: The Scottish Highlands and the Origins of Environmentalism. Yale: Yale University Press.

Kula, Erhun. 1998. History of Environmental Economic Thought. London: Routledge.

Livernois, John. 2009. On the Empirical Significance of the Hotelling Rule. Review of Environmental Economics and Policy, 3(1): 22-41.

Missemer, Antoine. 2017. Les Économistes et la fin des énergies fossiles (1865-1931). Paris: Classiques Garnier.

Pigou, Arthur C. 1912. Wealth and Welfare. London: MacMillan & Co.

Pigou, Arthur. C. 1924. The Economics of Welfare (2nd ed.). London: MacMillan.

Robinson, Tim J. C. 1989. Economic Theories of Exhaustible Resources. London & New York: Routledge.

Schabas, Margaret. 2005. The Natural Origins of Economics. Chicago & London: University of Chicago Press.

Slade, Margaret E., and Henry Thille. 2009. Whither Hotelling: Tests of the Theory of Exhaustible Resources. Annu. Rev. Resour. Econ., 1: 239-260.

Stocking, George W. 1925. The Oil Industry and the Competitive System. Clifton: Augustus M. Kelley.

Tryon, Frederik G. 1927. An Index of Consumption of Fuels and Water Power. Journal of the American Statistical Association, XXII(159): 271-282.

Tryon, Frederik G., and Edwin C. Eckel (eds). 1932. Mineral Economics. Lectures under the Auspices of the Brookings Institution. New York & London: McGraw-Hill.

Wolloch, Nathaniel. 2016. Nature in the History of Economic Thought. How Natural Resources Became an Economic Concept. London & New York: Routledge.

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