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Spatial welfare economics versus ecological footprint: modeling agglomeration, externalities and trade

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  • Fabio Grazi
  • Jeroen Bergh
  • Piet Rietveld

Abstract

A welfare framework for the analysis of the spatial dimensions of sustainability is developed. It covers agglomeration effects, interregional trade, negative environmental externalities, and various land use categories. The model is used to compare rankings of spatial configurations according to evaluations based on social welfare and ecological footprint indicators. Five spatial configurations are considered for this purpose. The exercise is operationalized with the help of a two-region model of the economy, that is, in line with the ‘new economic geography.’ By generating a number of numerical ‘counter-examples,’ it is shown that the footprint method is inconsistent with an approach aimed at maximum social welfare. Unless environmental externalities are such a large problem that they overwhelm all other components of economic well-being, a ‘spatial welfare economic’ approach delivers totally different rankings of alternative land use configurations than the ecological footprint. Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Fabio Grazi & Jeroen Bergh & Piet Rietveld, 2007. "Spatial welfare economics versus ecological footprint: modeling agglomeration, externalities and trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(1), pages 135-153, September.
    • Handle: RePEc:kap:enreec:v:38:y:2007:i:1:p:135-153
    DOI: 10.1007/s10640-006-9067-2
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    Cited by:

    1. van den Bergh, Jeroen C.J.M., 2010. "Externality or sustainability economics?," Ecological Economics, Elsevier, vol. 69(11), pages 2047-2052, September.
    2. Martin Drechsler & Julia Touza & Piran White & Glyn Jones, 2016. "Agricultural landscape structure and invasive species: the cost-effective level of crop field clustering," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 111-121, February.
    3. Kurt Kratena & Gerhard Streicher, 2012. "Spatial Welfare Economics Versus Ecological Footprint: A Sensitivity Analysis Introducing Strong Sustainability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(4), pages 617-622, April.
    4. J. Ram Pillarisetti & Jeroen C.J.M. van den Bergh, 2008. "Sustainable Nations: What do Aggregate Indicators tell us?," Tinbergen Institute Discussion Papers 08-012/3, Tinbergen Institute.
    5. J. Pillarisetti & Jeroen Bergh, 2010. "Sustainable nations: what do aggregate indexes tell us?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 12(1), pages 49-62, February.
    6. Zbigniew Dokurno & Bogusław Fiedor, 2016. "Sustainable Development as the Concept of World Economy Development from Contemporary Macroeconomics Perspective," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 5-24.
    7. Fabio Grazi (AFD) & Henri WAISMAN & Jeroen van DEN BERGH, 2017. "A Simple Model of Agglomeration Economies with Environmental Externalities," Working Paper 6123ba60-086f-4618-9df3-a, Agence française de développement.
    8. Thomas Wiedmann & John Barrett, 2010. "A Review of the Ecological Footprint Indicator—Perceptions and Methods," Sustainability, MDPI, vol. 2(6), pages 1-49, June.
    9. Jiafeng Gu, 2021. "Spatiotemporal context and firm performance: The mediating effect of strategic interaction," Growth and Change, Wiley Blackwell, vol. 52(1), pages 371-391, March.
    10. Gertjan Dordmond & Heder Carlos Oliveira & Ivair Ramos Silva & Julia Swart, 2021. "The complexity of green job creation: An analysis of green job development in Brazil," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 723-746, January.
    11. Wood, Richard & Garnett, Stephen, 2010. "Regional sustainability in Northern Australia --A quantitative assessment of social, economic and environmental impacts," Ecological Economics, Elsevier, vol. 69(9), pages 1877-1882, July.
    12. Ferng, Jiun-Jiun, 2009. "Applying input-output analysis to scenario analysis of ecological footprints," Ecological Economics, Elsevier, vol. 69(2), pages 345-354, December.
    13. Mathis Wackernagel & Gemma Cranston & Juan Carlos Morales & Alessandro Galli, 2014. "Ecological Footprint accounts," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 24, pages 371-396, Edward Elgar Publishing.
    14. Monsalve, Fabio & Zafrilla, Jorge Enrique & Cadarso, María-Ángeles, 2016. "Where have all the funds gone? Multiregional input-output analysis of the European Agricultural Fund for Rural Development," Ecological Economics, Elsevier, vol. 129(C), pages 62-71.

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    More about this item

    Keywords

    Agglomeration effects; Negative externalities; Population density; Spatial configurations; Trade advantages; Transport; F12; F18; Q56; Q57; R12;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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