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Market and policy shocks in economic systems: interrelated dynamics in the sustainability transition

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  • Massimiliano Mazzanti

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 in the sustainability transition," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2014(2), pages 153-164.
    • Handle: RePEc:fan:efeefe:v:html10.3280/efe2014-002008
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    References listed on IDEAS

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    6. Costantini, Valeria & Mazzanti, Massimiliano, 2012. "On the green and innovative side of trade competitiveness? The impact of environmental policies and innovation on EU exports," Research Policy, Elsevier, vol. 41(1), pages 132-153.
    7. Giovanni Marin & Massimiliano Mazzanti, 2013. "The evolution of environmental and labor productivity dynamics," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 357-399, April.
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    9. Valeria Costantini & Massimiliano Mazzanti (ed.), 2013. "The Dynamics of Environmental and Economic Systems," Springer Books, Springer, edition 127, number 978-94-007-5089-0, September.
    10. 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.
    11. van den Bergh, Jeroen C.J.M., 2010. "Externality or sustainability economics?," Ecological Economics, Elsevier, vol. 69(11), pages 2047-2052, September.
    12. 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.
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    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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