The sorts of related economic activities that could be put into the Bounded Efficiency Space would include things like car insurance. Because the number of vehicles would be at or near the equilibrium level (subject to minor variations from one year to the next as explained above) insuring the drivers of those vehicles would not be an endeavour likely to cause environmental or sustainability problems, since it would have little effect on the numbers of vehicles on the roads. If anything, it could lead to fewer vehicles if premiums became unaffordable. If premiums became cheap, the constraints on numbers of vehicles would still be in operation and so the insurance pricing would not lead to significant growth in numbers of drivers/vehicles. It would be useful to enable market forces and competition to operate on the car insurance services, thereby providing a means by which customers could get the best deal by shopping around. The price would generally be determined, in the long run, by the numbers of insurers active in the marketplace and the efficiency of the market.
Using an example of my thinking might be helpful. The manufacture, sale and use of all road vehicles which burn fossil fuels for at least part of their propulsion would be outside the Bounded Efficiency Space, and this supply chain would therefore be expected to be sustainably managed in equilibrium. This doesn't mean that there could only ever be the same number of such vehicles on the roads once the equilibrium point had been reached. Increases in fuel efficiency from year E (the year Equlibrium had been reached) to year E + 1 could mean that more vehicles could be operated on the roads in year E + 1 (eg because they emitted the same volume of greenhouse gases in total as all the vehicles in year E did in total). Note that by being outside the Bounded Efficiency Space, this supply chain would have to be constrained through rules to ensure equlibrium with the environment and ecosystems was maintained.
The sorts of related economic activities that could be put into the Bounded Efficiency Space would include things like car insurance. Because the number of vehicles would be at or near the equilibrium level (subject to minor variations from one year to the next as explained above) insuring the drivers of those vehicles would not be an endeavour likely to cause environmental or sustainability problems, since it would have little effect on the numbers of vehicles on the roads. If anything, it could lead to fewer vehicles if premiums became unaffordable. If premiums became cheap, the constraints on numbers of vehicles would still be in operation and so the insurance pricing would not lead to significant growth in numbers of drivers/vehicles. It would be useful to enable market forces and competition to operate on the car insurance services, thereby providing a means by which customers could get the best deal by shopping around. The price would generally be determined, in the long run, by the numbers of insurers active in the marketplace and the efficiency of the market.
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About the BloggerI'm David Calver - an Accountant with a passion for sustainability. Categories
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