Putting the Biophysical (Back) in Economics: A Taxonomic Review of Modeling the Earth-Bound Economy
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ORIGINAL PAPER
Putting the Biophysical (Back) in Economics: A Taxonomic Review of Modeling the Earth‑Bound Economy John Sherwood1 · Michael Carbajales‑Dale1 · Becky Roselius Haney2 Received: 4 June 2019 / Revised: 21 February 2020 / Accepted: 25 February 2020 / Published online: 13 March 2020 © The Author(s) 2020
Abstract Economists rarely model the economy as explicitly bound by earth’s ecological systems. Modeling the dynamic interactions of both human and non-human systems is admittedly a challenging task, as it requires expertise from multiple disciplines. Within the last 10 years, a wide variety of research papers have been published that include some biophysical aspects in a model of the economy. These papers all have one thing in common: the model of the economy includes physical and/or energetic exchanges, as well as monetary exchange. This theme is what defines the emerging sub-discipline of biophysical economics, BPE. BPE models of the economy originate from a variety of disciplines, and thus BPE research articles are published across a wide spectrum of academic journals. As inter-disciplinary researchers ourselves, we want to understand what BPE modeling approaches have been used so far. In this paper, we examine and classify over one hundred published articles that use biophysical models of the economy. Although BPE modeling approaches are quite varied, grouping the research by common characteristics reveals several active research areas. We highlight recent papers that are helpful examples of the most popular BPE modeling strategies. Gaps also exist. Several modeling approaches have not been used in published works yet. We identify which of those gaps could be promising avenues for future research. We conclude by suggesting which BPE modeling approach might be particularly appropriate for a variety of research questions. Keywords Review · Modeling · Production function · Systems dynamics · Input–output · Agent-based model
Introduction Biophysical constraints are largely ignored in conventional economic models. Of course these conventional models do not explicitly deny the biophysical reality that the economy depends on the availability of natural resources, or even that the economy takes advantage of ecosystem services such as water purification, carbon sequestration, and erosion control. However, these realities are generally not considered limiting enough to be of concern. Electronic supplementary material The online version of this article (https://doi.org/10.1007/s41247-020-00069-0) contains supplementary material, which is available to authorized users. * John Sherwood [email protected] 1
Department of Environmental Engineering and Earth Sciences, Clemson University, Clemson, SC, USA
Department of Economics, Calvin University, Grand Rapids, MI, USA
2
To be fair, instances of natural resource depletion leading to major economic contraction are rare in the modern era and early attempts by economists to model or account for biophysical limits on the economy were unsuccessful. In
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