Geoscience Reference
In-Depth Information
mainly or exclusively on mainstream economics as an analytical foundation. One of
the earliest criticisms raised by environmentalists decades ago, and later by envi-
ronmental historians is that mainstream economists, and some economic historians,
have not only set aside the role played by natural resources in past and present
economic growth, but have also ignored the increasingly powerful and global
environmental impacts of economic growth on the planet
'
s ecological life-support
systems.
1
Yet the misunderstanding between mainstream economics and environmental
sciences goes beyond having ignored some
inputs and outputs that can
simply be reintegrated into current macroeconomic growth analysis. As many
specialists have recognized, economists have found profound and persistent prob-
lems in the explanation of long-term economic growth. These dif
“
external
”
culties originated
at the beginning of the neoclassical analytical approach. Ironically, mainstream
economists intended to become the analytical physicians of the social sciences
precisely as they discarded
and other natural resources as relevant factors
within economic theory.
2
Interestingly enough, it was also in this period when
history ceased to be a basic background within economics.
3
From then onwards the
standard neoclassic growth model assumed that the
'
land
'
ows of GDP
are directly produced from labour and capital alone, without specifying a role for
energy
nal value added
fl
ows, which were only considered to be consumable intermediates.
4
fl
2.2 The Missing Role of Useful Work from Energy Carriers
in Economic Growth
According to these neoclassical analytical assumptions, technological progress
becomes exogenous and natural resource consumption is seen as a consequence, not
a driver, of economic growth. Perhaps it is not so surprising that the
rst generation
of macroeconomists who accounted for growth by means of a Cobb-Douglass
production function using capital and labour as the only relevant factors, couldn
t
fully explain no more than a small level of growth in GDP, because the results left a
large, increasing residual (Fig.
2.1
). Labelling this unexplained residual
'
“
total factor
productivity
(TFP), and considering it to be the contribution of technical progress
to economic growth, has become common practice. However as Robert Solow
stresses, by calling it
”
, TFP has become an exog-
enous factor not taken into account by the standard growth theory.
“
the measure of our ignorance
”
1
Debier et al. (
1986
), Worster (
1988
), McNeill (
2000a
), Krech III et al. (
2004
), Hornborg et al.
(
2007
) and Sing et al. (
2013
).
2
Pasinetti (
1981
).
3
Hodgson (
2007
).
4
Ayres and Warr (
2005
).
