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From Ecological Footprint to Ecological Rent: An Economic Indicator for Resource Constraints

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Author Info
Kurt Kratena (WIFO)

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Abstract

This paper takes as its starting point a combination of a (monetary) input-output model with a national Ecological Footprint account for Germany in the spirit of Wiedmann et al. (2006). Footprint as well as biocapacity are dealt with at the industry level. Gross output of each industry and final demand for each industry can then be split into a share that can be reconciled with biocapacity and another share that corresponds to biocapacity overshooting. The Ecological Footprint concept is extended in this study by introducing the additional biophysically productive land necessary for sustaining the given level of economic activity. It is assumed that each industry had to rent the corresponding areas and to apply a given technology in order to make this additional land biophysically productive. This results in a new technology for each industry leading to an increase in costs and prices. The new price level is directly linked to the share of output that corresponds to biocapacity overshooting. Economic indicators can be derived by measuring the income difference brought about by the price increase. This difference corresponds to a Ricardian rent which is due to resource constraints on output growth.

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Publisher Info
Paper provided by WIFO in its series WIFO Working Papers with number 292.

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Length: 28 pages
Date of creation: 29 May 2007
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Handle: RePEc:wfo:wpaper:y:2007:i:292

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Related research
Keywords: input-output models; Ecological Footprint; Ricardian rent;

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  1. Kurt Kratena, 2001. ""Ecological Value Added" in an Integrated Ecosystem-Economy Model. An Indicator for Sustainability," WIFO Working Papers 165, WIFO. [Downloadable!]
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  2. Daly, Herman E., 1990. "Toward some operational principles of sustainable development," Ecological Economics, Elsevier, vol. 2(1), pages 1-6, April. [Downloadable!] (restricted)
  3. Bicknell, Kathryn B. & Ball, Richard J. & Cullen, Ross & Bigsby, Hugh R., 1998. "New methodology for the ecological footprint with an application to the New Zealand economy," Ecological Economics, Elsevier, vol. 27(2), pages 149-160, November. [Downloadable!] (restricted)
  4. Faye Duchin, 2004. "Input-Output Economics and Material Flows," Rensselaer Working Papers in Economics 0424, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
  5. McDonald, Garry W. & Patterson, Murray G., 2004. "Ecological Footprints and interdependencies of New Zealand regions," Ecological Economics, Elsevier, vol. 50(1-2), pages 49-67, September. [Downloadable!] (restricted)
  6. Wiedmann, Thomas & Minx, Jan & Barrett, John & Wackernagel, Mathis, 2006. "Allocating ecological footprints to final consumption categories with input-output analysis," Ecological Economics, Elsevier, vol. 56(1), pages 28-48, January. [Downloadable!] (restricted)
  7. Ferng, Jiun-Jiun, 2001. "Using composition of land multiplier to estimate ecological footprints associated with production activity," Ecological Economics, Elsevier, vol. 37(2), pages 159-172, May. [Downloadable!] (restricted)
  8. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-71, August. [Downloadable!] (restricted)
  9. Lenzen, Manfred & Murray, Shauna A., 2001. "A modified ecological footprint method and its application to Australia," Ecological Economics, Elsevier, vol. 37(2), pages 229-255, May. [Downloadable!] (restricted)
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