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.
