...a dwarf green macroecomy.

Dear Artiom, your comment/answer in my view is correct.

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Once we correct the traditional marcro-economy to reflect climate change and climate change-economy friendly innovations we shift to a new higher level macroeconomy, in this case a dwarf green macro-economy, the world of dwarf green economies, dwarf green growth, and dwarf green trickledown effects.

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Dwarf green markets are not cleared neither by a green market price nor a tradional market prices as the price structure, the choice structure and the model structure shifts when corrections are made to the traditional model, whether they are cost internalization corrections or environmental externality management impired corrections.

I asked the question simple because despite the 2012 shift to perfect green market system to fully correct business as usual and make it environmentally friendly once and for all(e.g climate change friendly) we have moved, perhaps knowingly to a world of dwarf green markets and away from perfect green market theory

Thank you Artion for taking the time

Lucio

Climate change and innovation are two different matters. This note deals with climate change.

The market which results from adjusting the economy is simply the traditional one, but in which some of the environmental externalities are properly incorporated into prices.

As we all know from standard welfare economics, the polluter should pay the agreed costs of pollution (the polluter-pays principle), but the amount is not necessarily paid to the victims as compensation; that depends on broader policy objectives as well as the microeconomic efficiency of different payments in promoting measures to mitigate climate change.

In short, integrating environmental externalities into the market economy (i.e. the price system) is essential to a fairer market system which reflects costs more accurately. It does not disturb the overall functioning of the economy, i.e. the macroeconomy. No dwarfs of any colour, no monsters either..

Good day Edouard, thanks for your comment.

If you look at the situation from a system point of view, you can have a four components one, innovations, macroeconomy, pollutions(CO2), climate change, and link them a) if in the traditional model as you think you link them with a traditional market price, pollutiing here is free; b) if in the dwarf green market world you link them with dwarf green markte price, polluting here cost you some, but if the benefit of polluting more are higher that the cost, you will continue polluting; and c) if in the perfect green market world you link them with the green market price, which fully reflect the environmental cost of doing business.

Because Adam Smith assumption of environmental externality neutrality was wrong economists are fine now with letting the macroeconomy be adjusted to reflect environmental concerns(eg. climate change)......in 2012 RIO PLUS 20 we supposedly shifted to perfect green market theory, green economies, green growth to accomplish that but this requires the internalization of the environmental cost of doing business in the pricing mechanism of the tradtional market making the Green price higher than the traditional market price....but as you know, and you indicate in your comment, instead of doing environmental cost internalization the world has gone the way of environmental externality management creating dwarf green markets, " a market not cleared by green consumers or green market prices", ...

The point is that if we make the traditional market environmentally friendly because we accept that the environmental cost of doing business is real and must be internalized, then we shift from an economy only model to an eco-economy only model, and when you do this the prices structure, the choice structure, and the model structure shift creating paradigm shift knowledge gaps in the process....traditional micro economics and traditional macroeconomics no longer work....you need now green microeconomics and green macro economics to properly deal with the eco-economy or green economy issues....

Thanks again and have a nice day.

Dear Lucio Muñoz, Thank you very much for making very important inquiries on the Research Gate portal and inspiring important discussions on particularly important issues.

In my opinion, it is good that there was a discussion in the question of this query.

This is a very interesting and scientifically important topic.

Because the topic is very important so I still read the answers, I follow the interesting discussion.

Question:

What market comes out from adjusting traditional macroeconomics to reflect climate change and innovation concerns?

this is a very important issue that requires scientific research.

It seems to me that it is good that there was a discussion in the question of this question.

The answers given are very inspiring. Therefore, I am still reading the answers, following the interesting discussion.

I invite you to further considerations, to continue the interesting discussion.

I wish you all good and best regards

The above discussion inspired me to the following considerations:

Is sustainable development possible taking into account the full harmony of economic development with ecology?

Even if it is unrealistic, what are the reasons for building a theoretical model that would present such a fully balanced development?

Please, answer, comments. I invite you to the discussion

In addition, I note the interesting discussion inspired me to the following considerations:

It is very difficult to establish precise measures for the sustainable development process. Sustainable economic development in correlation with ecology should be measured to determine if it is being implemented. It is necessary to define precise determinants that on one hand will determine the pace of economic development and on the other hand will take into account specific issues of ecology. It should be a set of quantified indicators based on selected measurable and quantitative data, so that the whole analytical process can be considered as a research objective method. The best solution will therefore be to develop an analytical scoring method, for which the basic components of this method will be defined economic and ecological quantitative indicators.

In view of the above, the current question is: How to define precise measurable factors for the process of sustainable economic and ecological development?

Please, answer, comments. I invite you to the discussion.

Dear Dariusz, good day. I try to keep the discussion within each question's domain. Your recent comment goes a little bit outside of this question, but I have shared comments before related to your area of interest around sustainable development/Sustainability and measuring and monitoring....

You may find some good food for thoughts here in these papers:

Introducing a Simple Qualitative Comparative Dichotomy Approach to State and Clarify Sustainable Development and Sustainability Related Concepts and Issues

https://www.researchgate.net/publication/281244558_Introducing_a_Simple_Qualitative_Comparative_Dichotomy_Approach_to_State_and_Clarify_Sustainable_Development_and_Sustainability_Related_Concepts_and_Issues

Beyond traditional sustainable development: Stating specific and general sustainability theory and sustainability indices using ideal present-absent qualitative comparative conditions

https://www.researchgate.net/publication/281276522_Beyond_traditional_sustainable_development_Stating_specific_and_general_sustainability_theory_and_sustainability_indices_using_ideal_present-absent_qualitative_comparative_conditions

Linking Sustainable Development Indicators by Means of Present/Absent Sustainability Theory and Indices: The Case of Agenda 21

https://www.researchgate.net/publication/281276222_Linking_Sustainable_Development_Indicators_by_Means_of_PresentAbsent_Sustainability_Theory_and_Indices_The_Case_of_Agenda_21

Respectfully yours;

I see that environmental concern is part of the business world. That is, it is no longer questionable - keeping the proportions, is like the need to treat Human Resources as important talents of any company. In this sense, I see that the macroeconomic view should consider Ecology as an inalienable assumption, not as a cost.

Dear Roberto, thanks for your comments.

When you internalized the ecology/environment in the microeconomic model, you shift the model from a traditional economy to a green economy, and then you need to think in terms of perfect green market equilibrium/competition.....

As that has not happen yet since 2012 Rio plus 20, there is a green paradigm shift knowledge gap right now, and the reason I asked the question is: if someone linked climate change to the macroeconomy, what type of economy is that?....It can not be a green economy.....

I intend to help closing that green paradigm knowlege gap this year. You can find some food for thoughts here:

From Traditional Markets to Green Markets: A Look at Markets Under Perfect Green Market Competition

https://www.researchgate.net/project/From-Traditional-Markets-to-Green-Markets-A-Look-at-Markets-Under-Perfect-Green-Market-Competition

Those interested in green market thinking may find the following article full of food for thoughts

From Traditional Markets to Green Markets: A Look at Markets Under Perfect Green Market Competition

https://www.researchgate.net/publication/330617155_From_Traditional_Markets_to_Green_Markets_A_Look_at_Markets_Under_Perfect_Green_Market_Competition

https://www.researchgate.net/publication/330701187_From_Traditional_Markets_to_Green_Markets_A_Look_at_Markets_Under_Perfect_Green_Market_Competition

Article Global Warming Mitigation Through Carbon Sequestrations in t...

Bharath, good day. Do you have a view on this question?

In my opinion, these processes mostly concern or rather concern the energy market, the energy raw materials market, the market of eco-innovations, for example concerning renewable energy sources, the smart technology market, etc.

Best wishes

Good day Dariusz, it can sefely be said that climate change affects all markets, including the energy market.

The reason I asked the question is that even nobel prize winners appear not to be clear on what market results when you internalize climate change and climate change innovations into the traditional macroeconomy model....into the traditional market pricing mechanism model....

When you internalize concerns you create market shifts and if you are not aware of that then policies are conceived and implemented under a paradigm shift knowledge gap,,,,,Traditional economic thinking, micro and macro, no longer holds in a higher level market, such as a green market or red market or sustainability market.....

Just food for thoughts Dariusz

Thank you for your comment

Lucio