Towards a model of long-run capital substitution : a conceptual contribution and proof of concept analysis with future scenarios through to 2050

摘要

The idea of "overcoming" natural resource scarcity by substituting man-made capital for natural capital separates classical from modern economic thought. Today, "valuing nature" is deemed essential to warrant capital "trade offs" that are consistent with sustainability (defined as constant capital over time). While the explicit valuation of nature via non-market techniques is difficult and often controversial, its implicit - often zero- valuation puts us into an uncertain path whereby discussing substitution as a legitimate means to attain sustainability can be futile. This suggests supplementary ways to understand long-run capital substitutability are now in demand. The exploratory notion of "runaway capital" is thus introduced into a hypothetical "sustainable society" model. Runaway capital accounts for" capital" which, far from yielding services people prefer, yields services that "escape" those institutional arrangements that a society on its way to sustainability would demand, hence inducing a sort of "production failure" into the economy. The result is an "appreciative" heuristic model of long-run substitutability that is tested against four "empirical" scenarios to the year 2050 featuring cars, food and green homes as topical entry points. Scenario storylines are assembled to exhibit contrasting degrees of policy implementation of the Hartwick-Solow rule of investment as relevant to a low-energy-density carrier transition. A preliminary proof of concept analysis shows four scenario patterns of substitutability. These are interpreted and followed by model refinements and discussion. Overall, the study stresses the need to grasp long-run substitutability alongside the social legitimation and governance of capital inputs. This may in turn improve the quality of expectations about the internalisation of externalities agenda.