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Market and policy shocks in economic systems: interrelated dynamics towards future sustainability

Author

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  • Massimiliano Mazzanti

    (Dipartimento di Economia e Management, Università di Ferrara.)

Abstract

This note addresses the issue of market and policy shocks in the transition to sustainability. Market Shocks may be driven by price volatility; policy shocks are likely to occur either given contingent conditions of policy feasibility - a concept that shifts over time – or in reaction to extreme climatic events. The paper questions the role of ‘events’ as drivers of change, with a focus on innovation responses. In doing so, it broadens the perspective on environmental policy's role and effects. Environmental policy is connected to institutional and market dynamics. It is not limited to the Pigovian rationale – the mere minimization of current costs - but rather tied to a 'standard and cost approach' which attempts to incorporate efficiency concepts in a dynamic scenario, where learning and adaptation through technological and behavioral changes are crucial.

Suggested Citation

  • Massimiliano Mazzanti, 2014. "Market and policy shocks in economic systems: interrelated dynamics towards future sustainability," SEEDS Working Papers 1214, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised May 2014.
    • Handle: RePEc:srt:wpaper:1214
    as

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    File Function: Revised version, 2014
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    References listed on IDEAS

    as
    1. Valeria Costantini & Massimiliano Mazzanti (ed.), 2013. "The Dynamics of Environmental and Economic Systems," Springer Books, Springer, edition 127, number 978-94-007-5089-0, June.
    2. Simone Borghesi, 2011. "The European emission trading scheme and renewable energy policies: credible targets for incredible results?," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 3(3), pages 312-327.
    3. van den Bergh, Jeroen C.J.M., 2011. "Environment versus growth -- A criticism of "degrowth" and a plea for "a-growth"," Ecological Economics, Elsevier, vol. 70(5), pages 881-890, March.
    4. Massimiliano Mazzanti & Antonio Musolesi, 2013. "Nonlinearity, Heterogeneity and Unobserved Effects in the CO2-income Relation for Advanced Countries," Working Papers 2013.91, Fondazione Eni Enrico Mattei.
    5. Mazzanti, Massimiliano & Zoboli, Roberto, 2009. "Environmental efficiency and labour productivity: Trade-off or joint dynamics? A theoretical investigation and empirical evidence from Italy using NAMEA," Ecological Economics, Elsevier, vol. 68(4), pages 1182-1194, February.
    6. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    7. Lehtonen, Markku, 2004. "The environmental-social interface of sustainable development: capabilities, social capital, institutions," Ecological Economics, Elsevier, vol. 49(2), pages 199-214, June.
    8. Graciela Chichilnisky & Peter Eisenberger, 2009. "Energy security, economic development and global warming: addressing short and long term challenges," International Journal of Green Economics, Inderscience Enterprises Ltd, vol. 3(3/4), pages 414-446.
    9. van den Bergh, Jeroen C.J.M., 2010. "Externality or sustainability economics?," Ecological Economics, Elsevier, vol. 69(11), pages 2047-2052, September.
    10. Simone Borghesi & Valeria Costantini & Francesco Crespi & Massimiliano Mazzanti, 2013. "Environmental innovation and socio-economic dynamics in institutional and policy contexts," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 241-245, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    EU Regulation; solid waste; oligopoly; environmental externalities.;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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