Summer School 2014 - The Green Economy

The course will focus on the frontiers of theory formation and empirical analyses regarding ‘the green economy’. The concept is loaded with very different meanings, as it is connected to different traditions within economics. It also links up closely with natural sciences – especially ecology, but also physics – as well as with other social sciences. Therefor studying the green economy is an interdisciplinary endeavour.

R. Howarth, J. Jackson, S. Lele, S. Sullivan, H. Wittmer.


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The aim of the course in 2014 is to offer opportunities to analyse and discuss various perspectives regarding the ‘green economy’, both through getting a better understanding of the theoretical controversies and the practical implications.

The concept of ‘the green economy’ is loaded by different meanings. Partly, this relates to the fact that the concept is used by economists/economic traditions with different theoretical and practical orientations. Partly, it reflects the fact that the idea of the green economy is not only an academic field. It is also a field for political fights, including green politics/parties, the ecology movement and the anti-globalization movement.

The course will mainly elaborate on the academic positions and their practical implications. The main divide here seems to concern what kind of limits the natural systems put on the economic process. This can be seen as a discussion about the dynamics of ecosystems and the ‘space’ for economic growth. It goes, however, much further. It raises ethical questions regarding how to develop and distribute goods when societies face natural limits. It also provokes questions about the integrity of nature. This immediately connects to the issue of values – especially how the different types of values involved when facing the above type of ethical questions should be expressed. One concrete aspect of this in the green economy context regards to what extent nature values can be meaningfully measured in monetary terms. Finally, we face the issue of understanding of the dynamics of economic systems and what motivates human action – leading to the question of what could institutions for a sustainable economy look like.

Historically, the roots of the green economy paradigm can be found in the writings of economists like Kenneth Boulding, Nicolas Georgescu-Roegen and Herman Daly and the biologist Paul Ehrlich. The dominant focus among these authors was on the human appropriation of natural resources and the implication of both the appropriation itself and the necessary production of waste that follows on the dynamics of natural/ecosystem processes. The importance of seeing the economy as a subsystem of the biosphere was one of the most emphasized message from these authors.

Parallel to this development, we observe the establishment of environmental economics – a subfield of the dominant theory within economics – the neoclassical tradition – seeing environmental problems largely as market failures, emphasizing monetary valuation, pricing of environmental services and use of economic instruments where markets could not be established. The work of David Pearce is a manifestation of this thinking.

Ecological economics developed largely as a reaction to this expansion of economic theory. While a heterodox tradition, core representatives challenged both the ‘business as usual’ assumptions underlying environmental economics as well as its weak understanding of natural processes as different from human made systems. Hence, we observe a critique of the growth paradigm, of economic valuation and a development of alternative models both for valuation and for understanding human action resulting in quite different advice for economic policy.

Following the neo-liberal trend starting off in the 1980s, we observe a series of developments in practical policy drawing not least on the inputs from environmental economics. This regards pay-ments for ecosystem services (PES), PES procurement auctions, cap-and-trade systems, biodiversity offsets and habitat banking. Moreover, we observe the development from the Millennium Ecosystem Assessment with its focus on ecosystem services (ES) to the TEEB project – the Economics of Ecosystems and Biodiversity – where the latter advanced ideas regarding how economic valuation, environmental accounting, and ‘market-based’ instruments could ensure the production of such services in a sustainable way. Following the economic crises emanating in the US in 2007, the UNEP launched the Green Economy Initiative emphasizing ‘green investments’ and ‘green growth’ as the way out of the economic and ecological crisis. Similar initiatives are taken by the World Bank, the OECD, and the EU.

In the course we will study both the theoretical underpinning of these advancements and their practical potentials and implications. Alternative ‘green economy’ models will also be studied and evaluated. The assessments will be made from different angels and theoretical bases. At the same time, a common framework will be developed and used to better systematize the presented ideas and perspectives. This framework will be based on elements from classical institutional economics and governance theory.

Overall, the couse will cover the following:

Theoretical aspectso 

  • The theory of institutions. Emphasis on understanding the role of institutions regarding human conflict and coordination, rights systems, institutions and human motivation, institutions and transaction costs
  • The theory of environmental governance. Resource regimes and their dynamics. Economic systems as institutional systems. How to study economic systems and their dynamics
  • Environmental ethics
  • Political ecology – the aspects of power and justice
  • Growth theory. Economic development and its limits
  • Valuation theory and the theory of deliberation
  • Interdisciplinary Research

Empirical applications

  • Economic growth, resource use and development
  • Use of markets and ‘market-based instruments’ – e.g., payments for ecosystem services, biodiversity offsets/habitat banking, cap-and-trade systems
  • Valuation of ecosystem services 
  • REDD (reduced emissions from deforestation and forest degradation
  • Climate change
  • Green grabbing
  • The rights of the poor
  • Genetic resources
  • Democratic governance

The course will combine a series of working formats – e.g., lectures, seminars, round tables and group work. Theoretical and empirical analyses will to a large extent be mixed to strengthen the links.