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On economic disequilibrium and free lunch

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  • Robert Ayres

Abstract

There is a sharp disagreement between mainstream economists and advocates of energy efficiency as regards the potential for “free lunches” or “no regrets” policies to cut greenhouse gas emissions. From an economics perspective, the critical question is whether the economic system is — or is not — close to a Pareto-optimum equilibrium state. If so, it follows that most technological systems now in place are optimum, or nearly so, from an economic perspective. If not, there may be many sub-optimal technologies in place, with corresponding opportunities for very high returns on appropriate investments. This paper presents some of the evidence supporting the latter thesis. Copyright Kluwer Academic Publishers 1994

Suggested Citation

  • Robert Ayres, 1994. "On economic disequilibrium and free lunch," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(5), pages 435-454, October.
  • Handle: RePEc:kap:enreec:v:4:y:1994:i:5:p:435-454 DOI: 10.1007/BF00691922
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    References listed on IDEAS

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    Cited by:

    1. Martin, Ralf & Muûls, Mirabelle & de Preux, Laure B. & Wagner, Ulrich J., 2012. "Anatomy of a paradox: Management practices, organizational structure and energy efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 208-223.
    2. Kriechel, Ben & Ziesemer, Thomas, 2003. "The Environmental Porter Hypothesis as a Technology Adoption Problem?," Research Memorandum 011, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    3. Ben Kriechel & Thomas Ziesemer, 2009. "The environmental Porter hypothesis: theory, evidence, and a model of timing of adoption," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(3), pages 267-294.
    4. Sanden, Bjorn A. & Azar, Christian, 2005. "Near-term technology policies for long-term climate targets--economy wide versus technology specific approaches," Energy Policy, Elsevier, vol. 33(12), pages 1557-1576, August.
    5. Joel Swisher, 1996. "Regulatory and Mixed Policy Options for Reducing Energy Use and Carbon Emissions," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 1(1), pages 23-49, January.
    6. Isaksson, Lena Hoglund, 2005. "Abatement costs in response to the Swedish charge on nitrogen oxide emissions," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 102-120, July.
    7. Thomas Ziesemer & Peter Michaelis, 2008. "Strategic Environmental Policy and the Accumulation of Knowledge," Discussion Paper Series 301, Universitaet Augsburg, Institute for Economics.
    8. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    9. Ayres, Robert U, 2001. "The minimum complexity of endogenous growth models:," Energy, Elsevier, vol. 26(9), pages 817-838.
    10. Robert Ayres, 1998. "Towards a Disequilibrium Theory of Endogenous Economic Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 289-300, April.
    11. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    12. Ayres, Robert U., 2008. "Sustainability economics: Where do we stand?," Ecological Economics, Elsevier, vol. 67(2), pages 281-310, September.
    13. Lutsey, Nicholas P., 2008. "Prioritizing Climate Change Mitigation Alternatives: Comparing Transportation Technologies to Options in Other Sectors," Institute of Transportation Studies, Working Paper Series qt5rd41433, Institute of Transportation Studies, UC Davis.
    14. Azar, Christian & Schneider, Stephen H., 2002. "Are the economic costs of stabilising the atmosphere prohibitive?," Ecological Economics, Elsevier, vol. 42(1-2), pages 73-80, August.
    15. Ziesemer, Thomas & Kriechel, Ben, 2006. "Taxation and Technology Adoption: A Hotelling Approach," MERIT Working Papers 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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