Chapter 4.3.

Chapter 4: Standard Principles of Planning

4.3. Environmental Balance -part 2- : Mathematical Models

It was mentioned in the previous section that the key to the functioning of a sustainable planned economy is to devise a model to actuarially implement "control" in the "environmental balance," which is the priority reference principle in a sustainable planned economy. The former method calculates the environmental impact of production, distribution, and consumption activities, while the latter calculates the environmental impact on natural ecosystems, focusing on land and water areas.

The former can be further divided into a method for calculating the environmental impact of each production sector and a method for calculating the environmental impact of the consumption process of products, but the calculation of the environmental impact of each production sector is the key to formulating specific economic plans.

In formulating a comprehensive economic plan, it is necessary to calculate the overall environmental impact of each production sector, taking into account the interconnectedness of individual production sectors, rather than individual calculations for each sector. In this regard, the use of input-output model is indispensable.

The input-output model is a correlation diagram created by Soviet-American economist Wassily Leontief, inspired by Marx's reproduction schema, which quantifies the input-output structure in the production and distribution process of each industrial sector in a matrix format. In capitalist market economies, it is used to understand the economic structure and calculate the production ripple effect.　

This input-output model itself can be used to determine the "material balance," which is the second standard principle in a sustainable planned economy, but it can also be used as a basis to determine the "environmental balance," and to calculate the environmental load for each sector.

Leontief was also involved with postwar Japan, and the "Embodied Energy and Emission Intensity Data for Japan  Using Input-Output Tables (3EID)" that Japan's National Institute for Environmental Studies has been developing since the 1990s is based on input-output tables divided into around 400 industrial sectors, and calculates the amount of environmental load, such as energy consumption and greenhouse gas emissions such as CO2, that occurs in unit production activity (equivalent to one million yen) in each sector. This is a powerful model that can serve as the basis for environmental balance calculations.

On the other hand, the method of calculating the environmental load during the consumption process of a product is useful for calculating the cross-sectional environmental load during the consumption and distribution process of a product, which is comprehensive and difficult to grasp using a vertical input-output table.

Although the specific method has not yet been established, the Carbon Footprint, which investigates and grasps the source of greenhouse gases such as carbon dioxide emitted in the life and activities of individuals, groups, and companies, may be applicable to calculating the overall environmental load other than greenhouse gases.

In response to the above, methods for calculating the environmental load on natural ecosystems, focusing on land and water bodies, are needed when planning the use of land and water bodies that are essential for humans to continue industrial activities, including agriculture.

In this regard, the "Ecological Footprint (EF)", defined as "a metric of human demand on ecosystems, or more precisely on the planet’s biocapacity, which tracks how much mutually exclusive, biologically productive area is necessary to renew people’s demand for nature’s products and services", can be a useful clue.

When organically combined with the methods for calculating the environmental load associated with production, distribution, and consumption activities mentioned above, the EF serves as a numerical indicator for planning so that the EF remains within the limits of biological production for each piece of land and water body.

However, the existing calculation models presented above as concrete examples were all devised as methods of environmental analysis under a capitalist market economy, and therefore at present they remain analytical tools for environmental balances that are premised on a capitalist market economy. Further application is required when applying these to a planned economy.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 4.2.

Chapter 4: Standard Principles of Planning

4.2. Environmental Balance -part 1- : Mitigation vs. Control

In sustainable economic planning, environmental balance is a criterion principle that takes precedence over material balance. Environmental balance strictly means ecological balance pertaining to the balanced maintenance of the earth's natural ecosystem.

In that sense, it might be more appropriate to clearly define it as "ecological balance," but since this is not necessarily a widely supported term, here we will use the term "environmental balance," which has the broader meaning of a healthy balance in the global environment.

The most elementary principle of ecological balance in this sense is mitigation, which reduces the load on the ecosystem as much as possible. This is not about controlling the development itself, but about gradually reducing the environmental burden caused by the development. The stages of the process are avoidance, minimization, correction, alleviation, and compensation, in that order.

The first stage, "avoidance," is almost never adopted because it is a zero approach to avoiding certain development activities, and the second stage, "minimanization," is also difficult to adopt because it means minimizing the extent and scale of certain development activities.

The third, "correction," works insofar as it is possible to restore an ecosystem damaged by a development activity, but is rejected when that restoration requires significant costs, and is structured so that it eventually settles on the fourth, "alleviation." In reality, even alleviation is an obstacle to development, so it is often dealt with by the fifth option, "compensation," (including monetary compensation), which is provided as an escape route.

Such an idea is compatible with the loose environmental policy of "environmental protection" within the capitalist framework symbolized by the "development and environment compatible" slogan. In fact, there is a nod to the fact that this idea originated in the United States, historically the headquarters of capitalism. Even in a planned economy, however, it can be adopted in a development economic planning scheme that focuses on development.

However, as a principle of a sustainable planned economy that focuses on guaranteeing ecological sustainability, "mitigation" principle is just too loose and insufficient as a reference principle. Instead, it is necessary to introduce the concept of "controlling."

"Controlling" is a reference principle that goes beyond ‘mitigation’ to more actively control production activities, both quantitatively and qualitatively, in order to maintain ecological equilibrium. In light of the five stages of the “mitigation” principle mentioned earlier, the three stages of avoidance, minimization, and correction are systematically implemented, while the neutralized stages of mitigation and compensation are eliminated.

Such a “controlling” principle is a general framework, but in order to apply it to a planned economy, it is necessary to devise and apply a precise mathematical model that enables balance-of-payments calculations to objectively measure the environmental impact of production activities. This is the next task.

"Controlling" goes beyond "mitigation" and is a standard principle that proactively regulates production activities both quantitatively and qualitatively in order to maintain balance in the ecosystem. In light of the five stages of the "mitigation" principle mentioned above, the three stages of avoidance, minimization, and correction are implemented in a planned manner, while the neutralizing stages of alleviation and compensation are excluded.

This "controlling" principle is just one broad framework, and to apply it to a planned economy, it is necessary to devise and apply precise mathematical models that enable balance calculations to objectively measure the environmental load caused by production activities. This is the next challenge.

👉The papers published on this blog are meant to expand upon my On Communism.