Table Of ContentStudies in Systems, Decision and Control 10
Vladimir N. Burkov
Dmitry A. Novikov
Alexander V. Shchepkin
Control Mechanisms
for Ecological-Economic
Systems
Studies in Systems, Decision and Control
Volume 10
Serieseditor
JanuszKacprzyk,PolishAcademyofSciences,Warsaw,Poland
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·
Vladimir N. Burkov Dmitry A. Novikov
Alexander V. Shchepkin
Control Mechanisms
for Ecological-Economic
Systems
ABC
VladimirN.Burkov AlexanderV.Shchepkin
TrapeznikovInstituteofControlSciences TrapeznikovInstituteofControlSciences
RussianAcademyofSciences RussianAcademyofSciences
Moscow Moscow
Russia Russia
DmitryA.Novikov
TrapeznikovInstituteofControlSciences
RussianAcademyofSciences
Moscow
Russia
ISSN2198-4182 ISSN2198-4190 (electronic)
StudiesinSystems,DecisionandControl
ISBN978-3-319-10914-5 ISBN978-3-319-10915-2 (eBook)
DOI10.1007/978-3-319-10915-2
LibraryofCongressControlNumber:2014949166
SpringerChamHeidelbergNewYorkDordrechtLondon
(cid:2)c SpringerInternationalPublishingSwitzerland2015
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Contents
Introduction .................................................................................................. VII
1 Risk Level Control in Ecological-Economic Systems .......................... 1
1.1 Environmental and Anthropogenic Risks ........................................ 1
1.2 Risk Level Assessment Methods ..................................................... 6
1.3 Optimization Mechanisms for Risk Level Reduction Programs ..... 7
2 Control Mechanisms at the Level of Industrial Enterprises ............... 25
2.1 Penalty Mechanisms ........................................................................ 27
2.2 Risk Payment Mechanisms ............................................................. 37
2.3 Financing Mechanisms for Risk Level Reduction .......................... 43
2.4 Costs Compensation Mechanisms for Risk Level Reduction.......... 44
2.5 Insurance Mechanisms .................................................................... 53
2.6 Audit Mechanisms .......................................................................... 60
2.7 Mechanisms for Expected Losses Reduction .................................. 63
3 Control Mechanisms at the Level of Regional Authorities ................. 71
3.1 Control Model for Regional Environmental Safety Level .............. 71
3.2 Risk Payment Mechanisms ............................................................. 79
3.3 Financing Mechanisms for Risk Level Reduction .......................... 83
3.4 Costs Compensation Mechanisms for Risk Level Reduction.......... 85
3.5 Sales Mechanisms for Risk Level Quotas ....................................... 87
3.6 Insurance Mechanisms .................................................................... 94
3.7 Economic Motivation Mechanisms ................................................. 105
3.8 Mechanisms for Authorities’ Interests Coordination ...................... 111
4 Simulation Models for Control Mechanisms in Ecological-
Economic Systems .................................................................................. 117
4.1 Gaming Simulation of Control Mechanisms ................................... 117
4.2 Risk Payment Mechanisms: A Simulation Game............................ 120
VI Contents
4.3 Incentive Mechanisms for Risk Level Reduction: A Simulation
Game ..................................................................................................... 128
4.4 Financing Mechanisms for Risk Level Reduction: A Simulation
Game ............................................................................................... 132
4.5 Costs Compensation Mechanisms for Risk Level Reduction:
A Simulation Game ......................................................................... 145
4.6 Sales Mechanisms for Risk Level Quotas: A Simulation Game ..... 148
Conclusion ..................................................................................................... 155
Appendix. Basic Symbols and Abbreviations ............................................. 157
References ..................................................................................................... 161
About the Authors ........................................................................................ 165
Introduction
Each inhabitant of the Earth has the right for a healthy environment, the obligation
for preserving nature and the environment, taking good care of mineral wealth. As
a matter of fact, natural resources make the foundation of the sustainable
development, life and activity of all nations.
Sustainable Development. The term of sustainable development appeared in the
1980s. Sustainable development strategy was adopted at the first UN Conference
on Environment and Development (UNCED) held in Rio de Janeiro in 1992. It
was defined as “development that meets the needs of the present without
compromising the ability of future generations to meet their own needs.” In other
words, sustainable development ensures stable economic growth on a long-term
basis without environmental degradation.
Sustainable development strategy proceeds from the idea of a balance between
the environmental, economic and social aspects of development, with attention
also paid to the cultural dimension. Sustainable development strategy aims at
elaborating basic ways and methods of lifestyle adaptation to global changes.
According to this idea, each person possesses the right for a healthy environment
and fruitful existence in harmony with nature (for a detailed treatment of
sustainable development problems, we refer to [10, 13, 41, 57] and other
publications).
Risks Control. Sustainable development problems are closely connected with
safety control and risks control. A key role in the solution of safety problems
belongs to the economic component. No doubt, it is important to evaluate or
forecast correctly possible losses from environmental disasters and anthropogenic
accidents. However, a lot more attention should be focused on the following
challenge: design and implement efficient organizational and economic
stimulation mechanisms for practical activity on prevention of emergency
situations (ESs) and attraction of necessary investments. The efficiency of
economic mechanisms directly depends on the price the mankind is willing to pay
for its safety. For instance, the higher are all possible losses due to an ES, the
greater is the economic effect from its prevention.
Decision support systems at different levels (federal, regional or municipal
authorities, industrial enterprises) include economic models, methods and software
tools for the survivability and safe operability of complex technical systems and
VIII Introduction
extremely dangerous production processes, stable functioning of industries and
administration systems.
In practice, the matter concerns elaboration of strategic development plans of
industrial enterprises with proper consideration of environmental safety
requirements. This work includes economic justification of technical reequipment
and perfection of industrial processes, as well as possible compensating measures
in the case of emergency situations.
We emphasize the following economic mechanisms in the field of
environmental safety of industrial enterprises: risk payment mechanisms, sales
mechanisms for risk level quotas, risk redistribution mechanisms, and incentive
mechanisms for risk level reduction.
Economic mechanisms adopted by federal or regional authorities to protect
resident population and territories against emergency situations presuppose
planning, normalizing and financing of different safety measures. In particular,
such measures define compensatory payments for placing potentially dangerous
objects (in the sense of health and property of resident population) on certain
territories and for possible environmental damage. A common practice in some
countries is to provide tax and credit privileges, etc., to industrial enterprises,
organizations and individuals for their measures on reduction of emergency
situation risks and the effect of possible consequences. An efficient form of
governmental regulation of environmental safety consists in various agreements
(leasing or license contracts, and so on) on utilization, construction and
reequipment of potentially dangerous objects. Such agreements are concluded
between the investor or user of an object and appropriate-level authorities.
Limits make a system of socioeconomic restrictions for a potentially dangerous
activity. They represent maximum permissible amounts (costs estimates) of
possible socioeconomic losses from an emergency situation on a given territory,
which are established to industrial enterprises for certain periods. Generally, limits
are defined depending on the necessity of stage-by-stage risk level reduction to
maximum admissible levels, on environmental conditions in a given territory and
the level of its economic development.
Payments for possible socioeconomic consequences of emergency situations
comprise the cost of possible damages to an economy, the environment, life support
systems and resident population health, as well as payments for the right of conducting
potentially dangerous, inadmissible and unreasonable dangerous activities.
An appreciable role in solution of safety regulation problems belongs to
insurance funds accumulating the financial resources of industrial enterprises and
organizations, domestic and foreign legal and natural entities, namely, payments
for the consequences of emergency situations; compensations according to claims
for recovery and penalties for law-breaking; revenues from seized goods produced
on potentially dangerous objects; allocations in the form of dividends, interests on
deposits, appropriations from joint funding of the activity of industrial enterprises
and other legal entities.
Introduction IX
The financial resources of governmental insurance funds serve for elaboration
and implementation of risk level reduction measures for environmental disasters
and environmental damage, compensation of material losses in an economy, social
guarantee payments to aggrieved persons (loss of property, undermining of
health), stimulation of scientific research, education and other activities connected
with safety problems.
Economic and Financial Mechanisms. An important task is economic regulation
of market relations for rational nondepleting nature management, reduction of
environmental load, environmental control, attraction of budgetary and extra-
budgetary funds for nature-conservative activities. This calls for the following
initiatives [9]:
♦ performing transition to renting schemes in the field of nature management;
applying economic indicators with the overall cost of natural objects
(including their environment-forming function and the cost of ecological
services);
♦ creating a full-fledged payment mechanism for economic agents exploiting
natural resources, and allocating these financial resources to environment
conservation and restoration including biodiversity; implementing the “polluter
pays” principle;
♦ making payments for emissions dependent on the volumes of such emissions
and the level of danger to the environment and health;
♦ designing a science-based procedure to evaluate compensations for
environmental damage and health hazard during economic activity, in the case
of anthropogenic accidents and environmental disasters, as well as the result of
ecologically dangerous activities (including military activity), guaranteeing the
obligatory compensation for environmental damage and health hazard;
♦ stipulating for adequate budgetary financing of environmental protection and
control as priority directions in governmental policy;
♦ creating a funding system for environmental measures on a competitive basis
using all-level budgets and extrabudgetary sources;
♦ elaborating and applying a tax-tariff policy which stimulates export
reorientation from raw materials to deep processing products; creating and
applying a taxation system which stimulates adoption of ecologically pure
technologies, products and services regardless of a source country;
♦ improving modification mechanisms for patterns of ownership and purchase
mechanisms for natural resources and economic agents with proper focus on
environment conservation and restoration (including assessment of past
environmental damage, obligations for rehabilitation measures, etc.);
♦ establishing a mechanism of financial guarantees (including ecological
insurance) for possible negative impact on the environment;
♦ facilitating further development of ecological audit of industrial enterprises,
cooperation in the field of nature protection and facultative certification;
