Reassessing the neoclassical substitution model: the increasing flows evidence

Authors

DOI:

https://doi.org/10.5380/dma.v62i0.87977

Keywords:

elasticity of substitution, strong sustainability, weak sustainability, degrowth, economic growth

Abstract

In this article we assess the validity of the elasticity of substitution indicator to evaluate natural resource substitution. After clarifying the importance of the static equilibrium hypothesis for the development of such an indicator, we demonstrate that its application to growth conditions imposes the observation of decreasing inflows of natural resource as a necessary consequence. We derive this result without making any assumptions not recognized by advocates of the neoclassical approach. In addition to refuting the neoclassical substitution model, this result helps clarify the relationship observed since the Industrial Revolution between the physical and economic substitution of natural resources.

   

Author Biographies

Nilton Bispo Amado, Universidade de São Paulo (USP), São Paulo, SP

Graduated in Electrical Engineering from the University of São Paulo (2001). Dr. Amado has a master's degree in energy from PIPGE (Programa Interunits in Energy from University of São Paulo). Dr. Amado has received a CNPq scholarship and holds a doctorate from the USP Energy Program. He is currently the Supervisor of the Technical Service of Planning, Economic and Social Analysis and Assessment and Development of Energy Resources at the Institute of Energy and Environment of the University of São Paulo (IEE-USP). Dr. Amado has worked mainly in the area of energy transition to renewable sources, more particularly in the development and application of figures of merit to investigate the technical and economic feasibility of intermittent sources and associated flexibility solutions, as well as in the study of the Political Economy and Regulatory issues.

   

Ildo Luís Sauer, Universidade de São Paulo (USP), São Paulo, SP

Ildo gained a Bachelor's degree in Civil Engineering from the Federal University of Rio Grande do Sul (1977), a Master's degree in Nuclear Engineering and Energy Planning from the Federal University of Rio de Janeiro (1981), and a doctorate in Nuclear Engineering from the Massachusetts Institute of Technology ( 1985). He has experience in Economics, focusing on industrial organizations and industrial studies, including the following subjects: Petrobras, sectoral model, energy policy, pre-salt, and natural gas.

  

Carlos Germán Meza, Universidade de São Paulo (USP), São Paulo, SP

Carlos holds a master's and doctorate degree in Energy from the Institute of Energy and Environment of the University of São Paulo (IEE-USP). He is currently a postdoctoral researcher at IEE-USP. He has experience in the field of Energy Planning, integration of intermittent sources, electricity storage, economic evaluation of energy projects and energy efficiency. He developed the doctoral project in the area of global and regional energy transition, aiming to understand the difficulties and opportunities to decarbonize the global economy.

 

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Published

2023-12-22

How to Cite

Amado, N. B., Sauer, I. L., & Meza, C. G. (2023). Reassessing the neoclassical substitution model: the increasing flows evidence. Desenvolvimento E Meio Ambiente, 62. https://doi.org/10.5380/dma.v62i0.87977

Issue

Vol. 62 (2023): Psychoanalysis, philosophy and political ecology - Water, Sanitation and SDGs in Brazil: challenges, contradictions and governance

Section

Articles

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