Book contents
- Frontmatter
- Contents
- Preface
- Notation Guide
- 1 Introduction
- Part I The physical economy-environment system
- Part II The economic system
- Part III Environmental strategies in an evolutionary economy-environment system
- 8 Time, uncertainty, and external effects
- 9 The market solution
- 10 The stationary state
- 11 Conclusions
- References
- Index
8 - Time, uncertainty, and external effects
Published online by Cambridge University Press: 20 March 2010
- Frontmatter
- Contents
- Preface
- Notation Guide
- 1 Introduction
- Part I The physical economy-environment system
- Part II The economic system
- Part III Environmental strategies in an evolutionary economy-environment system
- 8 Time, uncertainty, and external effects
- 9 The market solution
- 10 The stationary state
- 11 Conclusions
- References
- Index
Summary
Probability and surprise
The existence of environmental external effects supposes a time-dependent process of change that is not recorded in the price system. Because environmental external effects are always passed through an environmental process or processes, they always occur with a lag, arising after the decisions taken by agents on the basis of price signals. The distinction between the direct and indirect effects discussed by Meade is, as we have seen, a distinction between effects passed through a shorter or a longer environmental chain. It reflects what was called, in Chapter 3, the time distance between processes. Direct effects are more sharply focussed or less diffuse than indirect effects because of the length of the chain linking the processes at either end of an external effect.
Time is thus a necessary element in the generation of external effects. But what sort of time? As Georgescu-Roegen points out, there is a world of difference between “time” (with a small t) conceived as the mechanical measurement of an interval, and “Time” (with a capital T) conceived as “the stream of consciousness, or … a continuous succession of moments” (1971, p. 135). The length of the chain linking the processes at either end of an external effect certainly determines the interval between cause and effect, but is it the interval or the process it bounds that is important?
At various points in this essay we have made the assumption, for expositional purposes, that the system is time invariant or technologically stationary.
- Type
- Chapter
- Information
- Economy and EnvironmentA Theoretical Essay on the Interdependence of Economic and Environmental Systems, pp. 111 - 124Publisher: Cambridge University PressPrint publication year: 1987