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Sustainability thought 177: What are environmental pollution production markets, environmental pollution reduction markets, environmental pollution management markets and no environmental pollution production markets? How do they work?

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  • Independent QLC researcher

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Abstract There is an environmental pollution problem separating the environmentally dirty economy from the environmentally clean economy; and this is because the environmentally dirty economy operates through the use of environmental pollution production markets and the environmentally clean economy works through no environmental pollution production markets. The environmental pollution problem between those markets can be addressed through environmental pollution reduction markets and through environmental pollution management markets depending on if you want to fully fix the environmental pollution problem or if you just want to patch it. Hence, there are 4 types of markets related to the environmental pollution issue, environmental pollution production markets, environmental pollution reduction markets, environmental pollution management markets, and no environmental production markets, all of which have different model structure and price structure as well as they all have a different impact on the environmental pollution issue while they work in the search for profits. And this raises important questions such as: What are environmental pollution production markets, environmental pollution reduction markets, environmental pollution management markets, and no environmental pollution markets? How do they work? What are the implications of this? Among the goals of this paper is to provide answers to the questions above. ------ ----- Resúmen Existe un problema de contaminación ambiental que separa la economía ambientalmente sucia de la economía ambientalmente limpia; Y esto se debe a que la economía ambientalmente sucia opera a través del uso de mercados de producción de contaminación ambiental y la economía ambientalmente limpia opera a través de mercados de producción sin contaminación ambiental. El problema de la contaminación ambiental entre esos mercados se puede abordar a través de los mercados de reducción de la contaminación ambiental y a través de los mercados de gestión de la contaminación ambiental, dependiendo de si desea solucionar completamente el problema de la contaminación ambiental o si solo desea parchearlo. Por lo tanto, hay 4 tipos de mercados relacionados con el problema de la contaminación ambiental, los mercados de producción de contaminación ambiental, los mercados de reducción de la contaminación ambiental, los mercados de gestión de la contaminación ambiental y los mercados de producción sin contaminación ambiental, todos los cuales tienen una estructura de modelo y una estructura de precios diferentes, así como también todos ellos tienen un impacto diferente en el tema de la contaminación ambiental mientras buscan maximizar las ganancias. Y esto plantea preguntas importantes como: ¿Qué son los mercados de producción de contaminación ambiental, los mercados de reducción de la contaminación ambiental, los mercados de gestión de la contaminación ambiental y los mercados de producción sin contaminación ambiental? ¿Cómo funcionan? ¿Cuáles son las implicaciones de esto? Entre los objetivos de este trabajo está dar respuesta a las preguntas anteriores.
Content may be subject to copyright.
Citation:
Muñoz, Lucio, 2023. Sustainability thought 177: What are environmental pollution
production markets, environmental pollution reduction markets, environmental pollution
management markets and no environmental pollution production markets? How do they
work?, In: CEBEM-REDESMA Boletin, Año 17, 4, La Paz, Bolivia.
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Sustainability thought 177: What are environmental pollution production markets,
environmental pollution reduction markets, environmental pollution management markets
and no environmental pollution production markets? How do they work?
By
Lucio Muñoz*
* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada Email: munoz@interchange.ubc.ca
Abstract
There is an environmental pollution problem separating the environmentally dirty
economy from the environmentally clean economy; and this is because the environmentally dirty
economy operates through the use of environmental pollution production markets and the
environmentally clean economy works through no environmental pollution production markets.
The environmental pollution problem between those markets can be addressed through
environmental pollution reduction markets and through environmental pollution management
markets depending on if you want to fully fix the environmental pollution problem or if you just
want to patch it. Hence, there are 4 types of markets related to the environmental pollution issue,
environmental pollution production markets, environmental pollution reduction markets,
environmental pollution management markets, and no environmental production markets, all of
which have different model structure and price structure as well as they all have a different
impact on the environmental pollution issue while they work in the search for profits. And this
raises important questions such as: What are environmental pollution production markets,
environmental pollution reduction markets, environmental pollution management markets, and
no environmental pollution markets? How do they work? What are the implications of this?
Among the goals of this paper is to provide answers to the questions above.
Key concepts
Traditional market, Green market, Dwarf green market, Dirty markets, Clean markets,
Environmental dirty markets, Environmentally clean markets, Environmental pollution problem,
Environmental pollution production market, Environmental pollution reduction market,
Environmental pollution management market, Environmental pollution-less market, No
environmental pollution production markets, Environmentally dirty economy, Environmentally
clean economy.
Introduction
a) The problem separating environmentally dirty markets from environmentally clean
markets
The thought of the existence of an environmental pollution problem(EPO) separating the
environmentally dirty economy(EDM) from the environmentally clean economy(ECLM) has
been stressed in the recent past(Muñoz 2022) as indicated in Figure 1 below:
Figure 1 above tells us that there is an environmental pollution problem(EPO) separating
the environmentally dirty economy(EDM) from the environmentally clean economy(ECLM);
and therefore, to live under an environmentally clean market(ECLM) we need to get rid of the
pollution production markets(POPM) like the environmentally dirty market(EDM). In other
words, Figure 1 above indicates that we need to eliminate the environmental pollution
problem(EPO) generated by the environmentally dirty market(EDM) fully to transform it into the
environmentally clean market(ECLM), which means that the most climate change friendly action
humanity can take right now is to transition to an environmental pollution free world under
environmentally clean markets(ECLM).
b) The two ways of dealing with the environmental pollution(EPO) problem
Therefore, there are two possible ways of addressing the environmental pollution
problem(EPO), one is through setting up environmental pollution management
markets(EPOMM) if we just want to patch the pollution generation problem and live
permanently under them; and the other one is setting up environmental pollution reduction
markets(EPORM) if we want to fully fix the pollution problem and transitioning it to the
environmentally clean economy(ECLM), which are summarized in Figure 2 below:
We can see in Figure 2 above that environmental pollution management
markets(EPOMM) deal with a portion of the pollution generation problem(EPO) created by the
environmentally dirty market(EDM) while environmental pollution reduction markets(EPORM)
deal with the whole of the environmental pollution problem(EPO) through problem
internalization. In other words, environmental pollution management markets(EPOMM) address
the environmental pollution generation problem(EPO) through pollution management theory
where, once markets are in place, pollution reduction is not a profitable business incentive as
pollution management costs are set externally while environmental pollution reduction
markets(EPORM) deal with the environmentally pollution problem through perfect pollution
reduction market theory where, once markets are in place, pollution reduction is an excellent
business opportunity as it leads to producing at the lowest pollution reduction market price
possible.
c) The four markets associated with the environmental pollution problem(EPO)
If we make the environmentally dirty market(EDM) be the environmental pollution
production market(EPOPM) and we let the environmentally clean market(ECLM) be the
environmental pollution-less market(EPOLM), then there are 4 types of markets related to the
environmental pollution problem(EPO) as shown in Figure 3 below:
Figure 3 above highlights that the four types of markets linked to the environmental
production problem are i) the environmental pollution production market(EPOPM); ii) the
environmental pollution management market(EPOMM); iii) the environmental pollution
reduction market(EPORM), and iv) the environmentally pollution-less market(EPOLM).
d) The need to understand the nature of these markets
Based on the discussion above then, there is an environmental pollution problem
separating the environmentally dirty economy from the environmentally clean economy; and this
is because the environmentally dirty economy operates through the use of environmental
pollution production markets and the environmentally clean economy works through no
environmental pollution production markets. The environmental pollution problem between
those markets can be addressed through environmental pollution reduction markets and through
environmental pollution management markets depending on if you want to fully fix the
environmental pollution problem or if you just want to patch it. Hence, there are 4 types of
markets related to the environmental pollution issue, environmental pollution production
markets, environmental pollution reduction markets, environmental pollution management
markets, and no environmental production markets, all of which have different model structure
and price structure as well as they all have a different impact on the environmental pollution
issue while they work in the search for profits. Notice that in 1987 when the World Commission
on Environment and Development(WCED 1987) called for addressing the environmental
sustainability problem by internalizing it they meant, albeit through sustainable development
thinking, internalizing the environmental pollution problem; and notice that in 2012 the United
Nations Commission on Sustainable Development(UNCSD 2012a; UNCSD 2012b) at Rio +20
was supposed to go the way of environmental pollution reduction markets, but instead it went the
way of environmental pollution management markets. Notice that neither the World
Commission on Environment and Development nor the United Nations Commission on
Sustainable Development called for a transition to an environmental pollution-less economy as
soon as possible, and even major current climate change based conferences(UNFCCC 2022) do
not mention or are not focused on the need to transition from the environmental pollution based
economy to the environmental pollution-less economy as soon as possible. If we linked
environmental pollution reduction markets to green markets and environmental pollution
management markets to dwarf green markets we can see not just that environmental pollution
reduction markets work in the opposite as environmental pollution management markets
work(Muñoz 2016), but that also to understand their working you need to flip traditional
economic thinking(Muñoz 2019). And finally, if we link the environmental pollution production
market to the perfect traditional market of Adam Smith(Smith 1776) we can see that just as in
traditional markets when environmental pollution production markets expand they generate more
environmental pollution as the cost of environmental pollution associated with economic activity
is not reflected in the pricing mechanism. And this raises important questions such as: What are
environmental pollution production markets, environmental pollution reduction markets,
environmental pollution management markets, and no environmental pollution markets? How do
they work? What are the implications of this? Among the goals of this paper is to provide
answers to the questions above.
Goals of this paper
a) To highlight the structure and meaning of environmental pollution production markets
when in place and when they expand; b) To point out the structure and meaning of
environmental pollution management markets when in place and when they expand; c) To stress
the structure and meaning of environmental pollution reduction markets when in place and when
they expand; d) To indicate the structure and meaning of environmental pollution-less markets
when in place and when they expand; and f) to show how the environmental pollution problem
can be linked to well-known markets such as the traditional market, the dwarf green market, the
green market and the environmental pollution-less market.
Methodology
First the terminology used in this paper is shared. Second, the structure of the
environmental pollution production market is described when in place and when it expands.
Third, the structure of the environmental pollution management market is pointed out when in
place and when it expands. Fourth, the structure of the environmental pollution reduction market
is indicated when in place and when it expands. Fifth, the structure of the environmental
pollution-less market is presented when in place and when it expands. Sixth, the environmental
pollution problem is linked to well-known perfect and imperfect markets such as the traditional
market, the dwarf green market, the green market and the environmental pollution-less market.
And finally, some food for thoughts and relevant conclusions are listed.
Terminology
--------------------------------------------------------------------------------------------------------------
TM = The traditional market GM = The green market
EDM = The environmentally dirty market PO = Pollution problem
EPO = Environmental pollution problem E[C] = Environmental cost externalization
I[c] = Environmental cost internalization CLM = The clean market
EPORM = Environmental pollution reduction market DM = The dirty market
ECLM = Environmentally clean market DGM = Dwarf green market
POPM = Pollution production markets EPOPM = Environmental pollution production market
PORM = Pollution reduction markets EPORM = Environmental pollution reduction markets
RPO = Remaining pollution problem REPO = Remaining environmental pollution problem
NEPO = New environmental problem DGMP = Dwarf green market price
GMP = Green market price EM = Environmental margin
TMP = Traditional market price EDMP = Environmentally dirty market price
POLM = Pollution-less markets EPOLM = Environmental pollution-less markets
--------------------------------------------------------------------------------------------------------------
Operational concepts, relevant market structures and externalization and internalization
rules
A) Operational concepts
1) Science, the world based on the scientific truth, this world falls if invalidated.
2) Ideology, the world based on the non-scientific truth, this world will tend to persist even if
invalidated.
3) The theory-practice general consistency principle, the world where the theory of the model
must match the practice.
4) The different model general inconsistency principle, the world where the theory and
practice of different models are inconsistent with each other.
5) Academic facts, the science based truth.
6) Alternative academic facts, the non-science based truth.
7) Academic blindness, the inability to see academic facts due to the existence of knowledge
gaps, paradigm shift based or otherwise.
8) Willful academic blindness, the willingness to ignore academic facts and consensus.
9) Sustainability, the world where the interplay of sustainability theory and sustainability
practice is aimed at fixing or correcting embedded externality problems.
10) Sustainable development, the world where the interplay of sustainable development theory
and sustainable development practice is aimed at patching or managing embedded externality
problems.
11) Academic integrity, the duty to respect and defend academic facts and consensus.
12) Golden paradigm, one that does not creates abnormalities.
13) Flawed paradigm, one that creates abnormalities.
14) Kuhns loop, the science based mechanism that leads to paradigm shift through abnormality
correction.
15) Dirty economy, a pollution based economy.
16) Clean economy, a pollution less based economy.
17) Red Marxism, capitalism need to be replaced as it is destroying societies.
18) Green Marxism, dwarf green capitalism must be replaced as it is destroying nature.
19) The red socialism market, the social justice and equality based market.
20) The green socialism market, the environmental justice and equality based market.
21) Green capitalism, capitalism supported by green markets.
22) Dwarf green capitalism, capitalism supported by dwarf green markets.
23) Traditional market, the market cleared by the traditional market price.
24) Green market, the market cleared by the green market price.
25) Red market, the market cleared by the red market price.
26) Pollution production market, a market operating under distorted market pricing.
27) Environmental pollution production market, a market operating under environmentally
distorted market pricing
26) Pollution reduction market, a market operating under a corrected distorted market price.
27) Environmental pollution reduction market, a market operating under an environmentally
corrected distorted market price.
28) Pollution management market, a market operating at a pollution management cost led
market price.
29) Environmental pollution management market, a market operating at an environmental
pollution cost led market price.
30) Sustainability market, the one cleared by the sustainability market price.
31) Dwarf green market, the market cleared by the dwarf green market price.
32) Clean market, the market cleared by the clean market price.
33) Environmentally clean market, the market cleared by the environmentally clean market
price.
34) Pollution-less market, a clean market.
35) Environmental pollution-less market, an environmentally clean market.
B) Relevant market structures
If we have the following: a = social abnormality, c = environmental abnormality, A =
dominant society, C = dominant environment, and B = the dominant economy, then the structure
of relevant markets can be stated as indicated below:
1) The traditional market as a golden model
i) TM = B
Under externality neutrality assumptions the traditional market TM in section i) above is
a golden paradigm, it produces no abnormalities.
2) The traditional market under social abnormalities(a)
ii) TM = aB
Under no social externality neutrality assumptions, the traditional market TM in section
ii) above produces social abnormalities a. It is a flawed paradigm as it has social abnormalities
to correct.
3) The traditional market under environmental abnormalities(c)
iii) TM = Bc
Under no environmental externality neutrality assumptions, the traditional market TM in
section iii) above produces environmental abnormalities c. It is a flawed paradigm as it has
environmental externalities to correct.
4) The traditional market under socio-environmental abnormalities(ac)
iv) TM = aBc
Under no socio-environmental externality neutrality assumptions, the traditional market
TM in section iv) above produces socio-environmental abnormalities ac. It is a flawed
paradigm as it has social and environmental externalities to correct.
5) The red market under environmental abnormalities(c)
v) RM = ABc
Under no environmental externality assumptions, the red market RM in section v) above
produces environmental abnormalities. It is a flawed paradigm as it has environmental
externalities to correct. Notice that in the red market RM, both society(A) and economy(B) are in
dominant form.
6) The green market under social abnormalities(a)
vi) GM = aBC
Under no social externality assumptions, the green market GM in section vi) above
produces social abnormalities. It is a flawed paradigm as it has social externalities to correct.
Notice that in the green market GM, both the economy(B) and the environment(C) are in
dominant form.
7) The sustainability market has no abnormalities
vii) SM = ABC
The sustainability market SM in section vii) above produces no abnormalities as all
components are in dominant form since all components are now endogenous to the model. It is a
golden paradigm as it has no abnormalities to correct.
C) Abnormality externalization and internalization rules
If y, x, z are three abnormalities and Y, X, Z are the corrected variables and if E[ ] =
externalization and I[ ] = internalization, then the following holds true:
a) E[Y] = y b) E[X] = x c) E[Z] = z
d) I[y] = Y e) I[x] = X f) I[z] = Z
g) I[E[Y]] = Y h) E[I[y]] = y i) E[YX] = yx
The environmental pollution production market
The link between the environmental problem(EPO) and the environmental pollution
production market(EPOPM) in Figure 3 in the introduction can be indicated graphically as done
in Figure 4 below:
Figure 4 above can be used to highlight the following: i) that there is a environmental
pollution production market(EPOPM) at point 1, where the environmental pollution production
market supply(EPOPMS) meets the environmental pollution production market demand D
determining the environmental pollution production market quantity(EDMQ) to be produced and
consumed at the environmental pollution production market price EPOPMP; ii) that this market
generates environmental pollution EPO going from point 1 to point 4; and iii) that as long as this
pollution generation problem(EPO) exist there will be no environmental pollution-less
markets(EPOLM).
Implication 1:
The environmental pollution production market is the market cleared by the
environmental pollution production market price, a market where the environmental cost of
production is external to the model.
The expansion of the environmental pollution production market
If the environmental pollution production market(EPOPM) expands from EPOPMS to
EPOPMS7 because there is a decrease in the environmental pollution production market
price(EPOPMP) from EPOPMP to EPOPMP7, then the environmental pollution production
market supply(EPOPMS) will shift from EPOPMS to EPOPMS7 expanding pollution levels as
indicated in Figure 5 below:
We can appreciate the following based on Figure 5 above: i) when the environmental
pollution production market expands from point 1 to point 7 the environmental pollution
problem(EPO) expands from point 4 to point 1 to point 4 to point 7 as the new environmental
pollution problem(NEPO) is greater than the original environmental pollution problem(EPO) so
that NEPO > EPO by the distance from point 1 to point 7 represented by the blue arrow. In other
words, as the environmentally pollution production market(EPOPM) expands more
environmental pollution(EPO) is generated.
Implication 2:
The expansion of the environmental pollution production market leads to an expansion of
the environmental pollution problem as more dirty production and dirty consumption means
more environmental pollution. Hence, producers in the environmental pollution production
market will tend to produce at the lowest economic cost possible regardless of the environmental
pollution levels generated as environmental pollution costs are externalized.
The environmental pollution management market
The link between the environmental problem(EPO) and the environmental pollution
management market(EPOMM) in Figure 3 in the introduction can be stated graphically as done
in Figure 6 below:
We can see based on Figure 6 above that when the environmental pollution
problem(EPO) becomes an issue and decision makers decide to manage the environmental
pollution generation problem then the environmental pollution production market(EPOPM)
found at point 1 shift to the environmental pollution management market found at point 3 as now
some of the environmental pollution problem is under management making the environmental
pollution management market price greater than the environmental pollution production market
price(EPOMMP > EPOPMP), which leads to lower pollution levels as production and
consumption decrease(EPOMMQ < EPOPMQ). We can also highlight based on Figure 6 above
that when environmental pollution management markets are in place such as the one in point 3
their sustainability is affected by a remaining environmental pollution problem(REPO) as
indicated by the green arrow from point 3 to point 4 as only a portion of the environmental
pollution problem is under management(EPOM) as shown by the green arrow from point 1 to
point 3.
Implication 3:
The environmental pollution management market is the market cleared by the
environmental pollution management market price, a market where only a portion of the
environmental cost of production, which is decided by the environmental pollution manager are
passed to consumers or accounted for, the rest of the environmental costs are still externalized.
The expansion of the environmental pollution management market
If the environmental pollution manager decides to expand the size of the environmental
problem under management(EPOM) it will increase the environmental externality cost to be
passed by producer to consumers to further decrease production and consumption and hence,
decrease environmental pollution, a situation summarized in Figure 7 below:
We can see in Figure 7 above that when we expand the size of the environmental
pollution to be managed such as from point 3 to point 5, by increasing the environmental
pollution management cost then production and consumption fall as EPOMMQ5 < EPOMMQ
and therefore environmental pollution(EPO) also falls, however there is still a remaining
environmental pollution problem(REPO5) as indicated by the red arrow from point 5 to point 4.
Implication 4:
The expansion of the environmental pollution management market by expanding the
environmental pollution cost under management leads to an increase in the environmental
pollution management market price, which leads to a further decrease in production and
consumption and a further decrease in pollution generation. However, producers in the
environmental pollution management market have no incentive to produce at the lowest
environmental cost possible as they will be content with making money by simply passing the
environmental management cost assigned by the environmental pollution manager to consumers.
The environmental pollution reduction market
The link between the environmental problem(EPO) and the environmental pollution
reduction market(EPORM) in Figure 3 in the introduction can be presented graphically as
indicated in Figure 8 below:
If we internalized the environmental pollution problem(EPO) then the environmental
pollution production market(EPOPM) at point 1 shifts to the environmental pollution reduction
market at point 4, where the quantity to be produced and consumed is EPORM < EPOPMQ,
which means no more environmental pollution cost externalization as the environmental
pollution reduction market price(EPORMP) accounts for all environmental costs associated with
economic activity. Therefore, at point 1 we have the environmental pollution production
market(EPOPM) and at point 4 we have the environmental pollution reduction marke(EPORM)
and in between we have the full environmental problem(EPO) that separates these two perfect
markets.
Implication 5:
The environmental pollution reduction market is the market cleared by the environmental
pollution reduction market price, a market where all the environmental cost of production are
accounted for as environmental costs here are internalized.
The expansion of the environmental pollution reduction market
When the environmental pollution cost associated with production decreases, then the
environmental pollution reduction price will decrease shifting the market production structure to
the right as cleaner good and services are produced and consume at lower prices, a situation
indicted in Figure 9 below:
We can appreciate based on Figure 9 above that the reduction in the environmental cost
of production shift the environmental pollution reduction market(EPORM) from point 4 to point
8 as now we have lower prices EPORMP8 < EPORMP, which leads to a reduction of
environmental pollution(EPOR8) from point 4 to point 8. In other words, at point 8 we are
producing cleaner goods and services at a lower environmental pollution reduction market price
as there is a lower environmental cost of production associated with the economic activity taking
place at this point. Hence we can see based on Figure 9 above that while environmental
pollution production markets will tend to produce at the lowest economic cost possible and shift
from left to right environmental pollution reduction markets will tend to produce at the lowest
environmental pollution cost possible and they shift from left to right too.
Implication 6:
The expansion of the environmental pollution reduction market by decreasing the
environmental pollution cost of production leads to an increase in cleaner production and
consumption and to a reduction in environmental pollution as when the environmental pollution
reduction market price decreases the environmental pollution reduction supply will shift to the
right. Therefore, under environmental pollution reduction markets there is an incentive for
producers to produce at the lowest environmental cost possible to maximize profits while there is
an incentive for consumers to consume cleaner and cleaner goods and services at lower prices.
The environmental pollution-less market
The link between the environmental problem(EPO) and the environmental pollution-less
market(EPOLM) in Figure 3 in the introduction can be summarized graphically as shown in
Figure 10 below:
We can highlight based on Figure 10 above that when the environmental cost of
production in the environmental pollution reduction market(EPORM) becomes zero(EM = 0),
then the environmental pollution reduction market becomes the environmental pollution-less
market(EPOLM) found at point 9 as indicated by the green arrow from point 4 to point 9.
Therefore, at point 9 the environmental pollution reduction market(EPORM) is now an
environmental pollution-less market(EPOLM) as the environmental pollution cost there is zero,
which means that EPOLMP < EPORMP8 < EPORMP and that EPOLMQ > EPORMQ8 >
EPORMQ.
Implication 7:
The environmental pollution-less market is the market cleared by the environmental
pollution-less market price, a market where the environmental cost of production associated with
economic activity is zero as this is a market where there is no environmental pollution
production problem.
The expansion of the environmental pollution-less market
An environmental pollution-less market should be expected to tend to producing at the
lowest environmental pollution-less market price(EPOLMP) possible as then producer will make
money by producing and supplying clean good and services at the lowest price possible as shown
in Figure 11 below:
Notice that at point 9 and point 10 in Figure 11 above production and consumption is
taking place without generating environmental pollution, the reason why the environmental
pollution cost is zero. We can stressed based on Figure 11 above the following: i) A reduction in
the environmental pollution-less market price from point 9 to point 10 leads to increased
production and consumption since EPOLMQ10 > EPOLMQ without producing environmental
pollution, and hence, environmental pollution-less markets will expand from left to right as the
environmental pollution-less market price decreases.
Implication 8:
The expansion of the environmental pollution-less market by producing at the lowest
environmental pollution-less market price possible leads to an increase in production and
consumption and profits without producing environmental pollution; and therefore, when the
environmental pollution-less market price decreases the environmental pollution-less market
supply will shift to the right. Therefore, under environmental pollution-less markets there is an
incentive for producers to produce at the lowest environmental pollution-less cost possible to
maximize profits while there is also an incentive for consumers to consume clean goods and
services at lower prices without producing environmental pollution. In other words, as the
environmental pollution-less market is a no environmental pollution production based market its
expansion is environmental pollution-less too.
Linking the environmental pollution problem to known perfect and imperfect markets
We can link the environmental problem(EPO) in Figure 3 in the introduction to well-
known perfect and imperfect markets by making the environmental pollution production
market(EPOPM) equal to the traditional market of Adam Smith(TM) so that TM = EPOPM, by
making the environmental pollution management market(EPOMM) equal to the dwarf green
market(DGM) so that DGM = EPOMM, by making the environmental pollution reduction
market(EPORM) equal to the green market(GM) so that GM = EPORM, and by making the
environmental pollution-less market(EPOLM) be the environmentally clean market(ECLM) so
that ECLM = EPOLM as highlighted in Figure 12 below:
Figure 12 above can be used to say that the environmental pollution problem(EPO) can
be seen from the point of view of four markets, the traditional perfect market(TM) that generates
environmental pollution, the dwarf green market(DGM) that manage environmental pollution
while still polluting(REPO), the perfect green market(GM) that internalizes the environmental
problem, which can then be transitioned to an environmental pollution-less, and the perfect
environmentally clean market, a market that does not produce environmental pollution.
Food for thoughts
a) Can environmental externality management markets exist without a remaining
environmental pollution problem? I think No, what do you think?; b) Can the coming of
environmentally clean markets be seen as the day when the environmental cost of production
driving green market expansions becomes zero? I think Yes, what do you think?; and c) Can we
transition from environmental externality management markets to environmental pollution-less
markets? I think No, what do you think?
Conclusions
First, it was highlighted that environmental pollution production markets generate the
environmental pollution problem, and their expansion following the principle of producing at the
lowest economic cost possible generates even more environmental pollution. Second, it was
stressed that environmental pollution management markets work under a remaining
environmental problem while managing environmental pollution, and their expansion by
expanding the level of pollution to be managed reduces production and consumption and
environmental pollution while still under a remaining environmental problem. Third, it was
mentioned that environmental pollution reduction markets internalize the environmental problem
and their expansions lead to more production and consumption of cleaner and cleaner goods and
services produce at the lowest environmental cost possible, and therefore, producing at the
lowest environmental pollution reduction market price possible. Fourth, it was indicated that
when the environmental pollution cost becomes zero the green market becomes an
environmental pollution-less market, and that the expansion of environmental pollution-less
markets leads to more production and consumption as the environmental pollution-less market
price decreases without producing environmental pollution. And fifth, it was shown that the
environmental pollution problem can be linked to the perfect traditional market, the imperfect
dwarf green market, the perfect green market, and the perfect clean market.
Overall, it was pointed out that the environmental pollution problem is linked in general
to environmental pollution production markets, environmental pollution management markets,
environmental pollution reduction markets, and environmental pollution-less markets; and in
particular it is linked to the traditional market, the dwarf green market, the green market and
environmentally clean market.
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Citation:
Muñoz, Lucio, 2023. Sustainability thought 177: What are environmental pollution
production markets, environmental pollution reduction markets, environmental pollution
management markets and no environmental pollution production markets? How do they
work?, In: CEBEM-REDESMA Boletin, Año 17, 4, La Paz, Bolivia.
... For example, the confusion can be used by pro-status quo academics and governments to double down on implementing the now known social and environmental unfriendly traditional market thinking as now social and environmentally friendly by just defining it circular economic thinking as it is happening 2023-2024 without fixing the sources of social and/or environmental unfriendliness embedded too in this thinking, just as the European Union is doing(EC 2020), a situation found at point "m" in Figure 4 above. Notice that at point "m" the socio-environmental pollution problem (SEPOP1) is even worse as it expands to the right from point 2 to point "m" as circular traditional markets, like linear traditional markets are pollution production markets (Muñoz 2023). ...
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Abstract The fact that the Brundtland Commission did not set a clear priority path for sustainable development thinking to be used to transition from a world under socio-environmental sustainability problems they had in 1987 to a world without them created a free for all development environment where different schools of thoughts with even conflicting goals enter into action at the same time advancing their core values acting like islands unconnected with other islands; and unconnected with the general goal of world free of all sustainability issues. Then towards 2012 the world finally decided to move away from a world without sustainability priorities to a world with environmental sustainability priorities, a decision that lead to two interesting periods, a science based period that culminated in 2012 with the push towards green markets, followed by a non-science based period with a push away from green markets and towards dwarf green markets. The author calls these two periods, the shift to green market period 1987-2012 and the period of green market paradigm shift avoidance 2012-2022, and links them to the end of the sustainable development period a la Brundtland Commission. As the move towards dwarf green markets after 2012 to avoid implementing green markets took place under academic silence not much is written about the science and policy implications of green paradigm shift avoidance and the confusion it creates, and how this confusion opens the door to issues such as green Marxism threats, greenwashing threats, and the circular economic thinking threats. Hence, the need to understand these threats fed by the green market vs. dwarf green market confusion attached to the green market paradigm shift avoidance period from the science point of view makes the following research topic and question relevant: Understanding the road from sustainable development thinking to green market paradigm shift avoidance 1987-2022: What are the implications of this? Among the goals of this paper is to provide answers to those questions. Resúmen El hecho de que la Comisión Brundtland no estableciera un camino prioritario claro para que el pensamiento sobre el desarrollo sostenible fuera utilizado en la transición de un mundo con problemas socio-ambientales de sostenibilidad que tenían en 1987 a un mundo sin ellos creó un entorno de desarrollo libre para todos en el que diferentes escuelas de pensamientos con objetivos incluso contradictorios entran en acción al mismo tiempo que promueven sus valores fundamentales actuando como islas desconectadas de otras islas; y desconectado del objetivo general de un mundo libre de todos los problemas de sostenibilidad. Luego, hacia 2012, el mundo finalmente decidió alejarse de un mundo sin prioridades de sostenibilidad a un mundo con prioridades de sostenibilidad ambiental, una decisión que condujo a dos períodos interesantes, un período basado en la ciencia que culminó en 2012 con el impulso hacia los mercados verdes, seguido por un período sin base científica con un alejamiento de los mercados verdes y hacia mercados que parecen ser verdes. El autor llama a estos dos períodos, el período de cambio hacia el mercado verde 1987-2012 y el período de evitación del cambio de paradigma del mercado verde 2012-2022, y los vincula con el final del período de desarrollo sostenible a la Comisión Brundtland. Dado que el movimiento hacia mercados que parecen ser verdes después de 2012 para evitar la implementación de mercados verdes se produjo bajo el silencio académico, no hay mucho escrito sobre las implicaciones científicas y políticas de evitar el cambio de paradigma verde y la confusión que crea, y cómo esta confusión abre la puerta a cuestiones como las amenazas del marxismo verde, las amenazas del lavado verde y las amenazas del pensamiento económico circular. Por lo tanto, la necesidad de comprender estas amenazas alimentadas por la confusión entre el mercado verde y el mercado que parece ser verde asociadas al período de evitación del cambio de paradigma del mercado verde desde el punto de vista científico hace que el siguiente tema de investigación y pregunta sean relevantes: Comprendiendo el camino desde el pensamiento del desarrollo sostenible hacia la evitación del cambio de paradigma del mercado verde 1987-2022: ¿Cuáles son las implicaciones de esto? Uno de los objetivos de este artículo es proporcionar respuestas a esas preguntas.
... It has been pointed out recently (Muñoz 2023a) that the traditional market(TM) is an environmental pollution production market(EPOPM), in the short term environmental pollution generation is minimal, but in the very long term the environmental pollution generated accumulates creating an environmental pollution problem(EPO) affecting the sustainability of the traditional market(TM), a situation summarized in Figure 1 below: ...
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Full-text available
We know that dwarf green markets and green markets work in opposite ways; and we know that we have been avoiding to shift from the perfect traditional market way of thinking to the perfect green market way of thinking since 2012 Rio + 20 Conference when we had a chance to orderly transition from the environmentally dirty economy to the environmentally clean economy, but we missed it. We missed the opportunity to go beyond business as always as the Brundtland Commission asked the world to do. Imagine that suddenly developed countries decide to go full the green market way as they have the economic resources needed to invest in closing the renewable energy technology gap to transition green markets towards environmentally clean economies, where environmental pollution reduction is now a good profit making opportunity. On the other hand, imaging that developing countries have no choice, but to stay within dwarf green markets as they do not have the economic resources to close their renewable energy technology gaps to transition to environmentally clean world. How would countries behave in a closed system environment in this bipolar world? How would they behave in an open system environment in this bipolar world? And this raises important questions such as: How the structure of a bipolar world where developing countries have dwarf green markets and develop countries have green markets would look like? Which world would collapse under an open system environment? What are the implications of this? Among the goals of this paper is to provide answers to the questions above.
... It has been pointed out recently (Muñoz 2023a) that the traditional market(TM) is an environmental pollution production market(EPOPM), in the short term environmental pollution generation is minimal, but in the very long term the environmental pollution generated accumulates creating an environmental pollution problem(EPO) affecting the sustainability of the traditional market(TM), a situation summarized in Figure 1 below: ...
Preprint
We know that dwarf green markets and green markets work in opposite ways; and we know that we have been avoiding to shift from the perfect traditional market way of thinking to the perfect green market way of thinking since 2012 Rio + 20 Conference when we had a chance to orderly transition from the environmentally dirty economy to the environmentally clean economy, but we missed it. We missed the opportunity to go beyond business as always as the Brundtland Commission asked the world to do. Imaging that suddenly developed countries decide to go full the green market way as they have the economic resources needed to invest in closing the renewable energy technology gap to transition green markets towards environmentally clean economies, where environmental pollution reduction is now a good profit making opportunity. On the other hand, imaging that developing countries have no choice, but to stay within dwarf green markets as they do not have the economic resources to close their renewable energy technology gaps to transition to environmentally clean world. How would countries behave in a closed system environment in this bipolar world? How would they behave in an open system environment in this bipolar world? And this raises important questions such as: How the structure of a bipolar world where developing countries have dwarf green markets and develop countries have green markets would look like? Which world would collapse under an open system environment? What are the implications of this? Among the goals of this paper is to provide answers to the questions above.
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Full-text available
When the Brundtland Commission said in 1987 that the business as usual model of Adam Smith needed to address the social and environmental issues associated with it, this meant that there was a socio-environmental pollution problem separating the dirty traditional economy from the clean economy. When the UNCSD in 2012 gave priority to addressing the environmental issue only associated with the dirty traditional market model, this meant that there was an environmental pollution problem between the environmentally dirty traditional market and the environmentally clean market. This situation brought the need to think about how the transition from the environmentally dirty traditional market to the environmentally clean market could be framed step by step, but instead of thinking in terms of transition to the environmentally clean economy attention was given since 2012 to adopting environmental externality management based markets or dwarf green markets. Whether mainstream thinkers in the sustainable development area failed in 2012 to see how the transition road from environmentally dirty traditional markets to environmentally clean markets could be built is not clear, but what it is clear is that there is no transition link from dwarf green markets to environmentally clean markets as dwarf green markets are still active environmental externality based markets as the root cause of the environmental problem is not yet corrected. And this raises the question, how can the 2012 road to transition from environmental pollution based traditional economies to environmentally clean economies that the world never built be pointed out? What are the implications of this? Among the goals of this paper is to provide answers to those questions.
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Abstract From the time of Adam Smith(1776) to 2012 UNCSD Rio +20 Conference we lived in a world where government intervention in markets was not welcomed or it was discouraged, except in very specific circumstances, a feeling at the heart of free market thinking. From 2012 to now 2019 we have slowly moved to a world where permanent government intervention is not just welcomed, but also encouraged such as when governments directly intervene in markets to deal with environmental issues. This indeed is a move away from free market thinking and towards non-free market thinking as it represents a shift from green market solutions to dwarf green market solutions. In other words, the promotion and implementation of dwarf green market thinking like carbon pricing truly requires a departure from traditional economic thinking, a practice that apparently is now accepted by today’s economists. And this raises questions such as: Has traditional economic thinking been flipped in practice when dealing with the environmental question? If yes, what are the implications of this in terms of consumption and production in dwarf green markets? How are dwarf green markets then be expected to work? Among the goals of this paper is to share a green market framework and a dwarf green market framework with the aim of contrasting them in order to highlight the working of green market thinking and that of dwarf green market thinking and provide that way answers to the questions listed above.
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We shifted from the traditional market model to the green market model in 2012 to address the environmental crisis head on, but apparently we started with the wrong green foot, a dwarf green foot. We are supposed to be dealing with the environmental crisis through perfect green markets, environment and economy partnership based perfect markets where environmental issues are internalized in the pricing mechanism of the market, the green market price. For this reason the green market is cleared by the green market price. Therefore, the perfect green market thinking was the right green foot to use from the beginning to address the environmental crisis directly as we shifted from perfect traditional market thinking to perfect green market thinking, but instead of doing this it seems like those leading the paradigm shift since 2012 have moved away from perfect green market thinking and run towards dwarf green market thinking, a world where markets are unconnected to the green market price mechanism as they are still treating environmental issues as externalities. And this is a clear violation of the theory-practice consistency principle, the traditional perfect market can be cleared only by the traditional market price and therefore the perfect green market can only be cleared by the green market price, and if this is not the case, then you have a dwarf market or distorted market, an inefficient market. In other words those leading the development agenda seem to be using dwarf green market instead of perfect green market thinking in response to the environmental crisis; and therefore we are dealing with this crisis in a very inefficient and distorting way as environmental externalities are not yet internalized. The discussion above raises the questions: Did we start trying to solve the environmental crisis in 2012 with the wrong green foot? If yes, why and which are the implications of this? And how can this situation be corrected? Among the goals of this paper is to provide an answer to those questions.
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