ENERGY AND ENERGY RESOURCES IN NEOCLASSICAL AND ECOLOGICAL ECONOMIC THEORY

Abstract

The paper explains the treatment of energy and energy resources as drivers of economic growth in neoclassical and ecological economics. It was established that the key research interests of neoclassical analysts were focused on the analysis of the importance of physical capital and labor as primary factors of economic growth, it follows that energy and energy resources in the theoretical opus of neoclassicists were not given enough attention. Considering energy as an intermediate good, researchers of neoclassical provenance marginalize the importance of energy and energy resources in the development of the production process. Moreover, the neoclassical mainstream does not even implicitly place energy in its macroeconomic framework. In other words, the role of energy in neoclassical economic theory is absolutely underestimated. Confirmation of such an attitude is the fact that energy is not even mentioned in Robert Solow's model of economic growth, for which the author received the Nobel Prize in 1986. This despite the fact that the production of energy ranks in the same importance as the production of food or the provision of necessary quantities of water. Environmental economists have criticized the neoclassical theory of economic growth, especially from the aspect of the inevitable implications of the first and second laws of thermodynamics on production and long-term economic growth. Ecological economists, among other things, decisively advocated the opinion that energy enables the continuity and long-term sustainability of all economic activity, and that therefore energy resources represent the most important primary driver of economic growth. They rightly point out that ecological systems depend on energy inputs, where it is important to keep in mind the fact that all natural systems rely almost entirely on solar energy. According to ecological economists, energy security, economic growth, development and protection of the ecological environment are central, highly correlated goals and priorities of national economies. Security in meeting the energy needs of producers and consumers. Providing sufficient amounts of energy in an economically rational and ecological way is an important dimension for achieving a compromise between the economy and the environment. The rapid growth of production during the twentieth century required abundant energy inputs. The growth of energy consumption was partly conditioned by the growing activities of people and inefficient use of energy. Energy consumption also grew due to the rapid development of science, technology and industry as the main consumer of energy. At the same time, the dynamic growth of energy consumption has resulted in growing environmental pollution and disruption of the natural balance. The latest projections speak of even greater energy consumption in the coming years. Therefore, it is not surprising that the question of the availability of energy resources and the implications of energy use on the environment has been promoted as one of the key problems in the ecological economy.