APEC 3611w: Environmental and Natural Resource Economics
  • Course Site
  • Canvas
  1. Appendices
  2. Appendix 03
  • Home
  • Syllabus
  • Assignments
    • Assigment 01
    • Assigment 02
    • Weekly Questions 01
    • Weekly Questions 02
    • Weekly Questions 03
    • Weekly Questions 04
    • Weekly Questions 05
  • Midterm Exam
  • Final Exam
  • 1. Global Context
    • 1. Introduction
    • 2. The Doughnut
  • 2. Micro Foundations
    • 3. The Microfilling
    • 4. Supply and Demand
    • 5. Surplus and Welfare in Equilibrium
    • 6. Optimal Pollution
  • 3. Market Failure
    • 7. Market Failure
    • 8. Externalities
    • 9. Commons
  • 4. Macro Goals
    • 10. The Whole Economy
    • 11. Sustainable Development
    • 12. GDP and Discounting
    • 13. Inclusive Wealth
    • 14. Fisheries
  • 5. Climate Change
    • 15. Climate Change
    • 16. Social Cost of Carbon
    • 17. Climate IAMs
    • 18. Air Pollution
    • 19. Water Pollution
  • 6. Natural Resources
    • 20. Non-renewables
    • 21. Will we run out?
    • 22. Fisheries
    • 23. Forestry
    • 24. Land as a resource
    • 25. Land-use change
  • 7. Natural Capital
    • 26. Ecosystem Services
    • 27. Valuing Nature
    • 28. Biodiversity
    • 29. GIS and Carbon
    • 30. Sediment Retention
    • 31. Ecosystem Tradeoffs
  • 8. Future Scenarios
    • 32. Uncertainty
    • 33. Possible Futures
    • 34. Positive Visions
  • 9. Policy Options
    • 35. Policy Analysis
    • 36. Market Policies
    • 37. Real World Policies
  • 10. Earth Economy Modeling
    • 38. Earth Economy Models
    • 39. Gridded Models
    • 40. EE in Practice
  • 11. Conclusion
    • 41. What Next?
  • Games and Apps
  • Appendices
    • Appendix 01
    • Appendix 02
    • Appendix 03
    • Appendix 04
    • Appendix 05
    • Appendix 06
    • Appendix 07
    • Appendix 08
    • Appendix 09
    • Appendix 10
    • Appendix 11
    • Appendix 12

On this page

  • 1 Purpose of this appendix
  • 2 Every model is a story
  • 3 Five questions to ask of any model
    • 3.1 1) What is inside the system?
    • 3.2 2) What are the stocks?
    • 3.3 3) How do people behave?
    • 3.4 4) Where is uncertainty?
    • 3.5 5) What is the objective?
  • 4 Reading a figure
  • 5 Models as arguments
  • 6 The Doughnut as a critique tool
  • 7 Exercises
  1. Appendices
  2. Appendix 03

Appendix C: Reading Models Critically

1 Purpose of this appendix

By this point in the book, you have learned how Earth–economy models:

  • represent stocks and flows,
  • link ecosystems and economies,
  • explore futures through scenarios,
  • and evaluate policy packages.

This appendix teaches a final, essential skill:

How to read model results without surrendering judgment.

Models are powerful.
They are also fallible.

Your task is not to believe them.

Your task is to interrogate them.


2 Every model is a story

A model output is never just a number.

It is a story of the form:

If the world behaves like this,
and if people respond like that,
and if ecosystems change in these ways,
then these outcomes follow.

Every “result” rests on:

  • assumptions,
  • simplifications,
  • and design choices.

The question is not:

  • “Is this model right?”

It is:

  • “What world does this model assume,
    and what world does it make visible?”

3 Five questions to ask of any model

3.1 1) What is inside the system?

  • Which sectors are represented?
  • Which regions exist?
  • Which ecosystems appear?
  • Which people are visible?

Absence matters.

What is not in the model is treated as:

  • fixed,
  • irrelevant,
  • or exogenous.

That is a value-laden choice.


3.2 2) What are the stocks?

Ask:

  • What accumulates?
  • What depletes?
  • What carries memory across time?

If a system lacks:

  • natural capital,
  • social capacity,
  • or institutional state,

then collapse cannot occur in the model—even if it can in reality.


3.3 3) How do people behave?

Look for:

  • price responsiveness,
  • substitution rules,
  • technology change,
  • adaptation.

Are people:

  • perfectly informed?
  • infinitely flexible?
  • instantly adjusting?

If so, the model may:

  • understate disruption,
  • understate inequality,
  • and overstate smoothness.

3.4 4) Where is uncertainty?

Is uncertainty:

  • explored through scenarios?
  • confined to a few parameters?
  • ignored altogether?

Does the model:

  • allow tipping points?
  • allow irreversible loss?
  • allow surprises?

A world without uncertainty is a world without risk.


3.5 5) What is the objective?

Every model has a hidden goal:

  • maximize GDP,
  • minimize cost,
  • stabilize emissions,
  • maximize welfare,
  • preserve assets.

Ask:

  • What outcome is privileged?
  • What outcome is secondary?
  • What outcome is invisible?

This is where ethics enters.


4 Reading a figure

Suppose you see a chart:

  • emissions over time,
  • under three scenarios.

Do not ask first:

  • “Which line is best?”

Ask:

  • What assumptions separate these lines?
  • What is held fixed?
  • What is allowed to change?
  • Who gains and who loses along each path?
  • What happens to stocks beneath the surface?

The visible curve is the surface.

The system beneath it is the content.


5 Models as arguments

A model result is an argument.

It says:

“Given these beliefs about the world,
this policy leads here.”

Your role is not to accept or reject it.

Your role is to respond:

  • Are these beliefs plausible?
  • Are important mechanisms missing?
  • Does this capture what we care about?
  • What futures does it exclude?

Earth–economy modeling is a dialogue.

Not a verdict.


6 The Doughnut as a critique tool

The Doughnut gives you a powerful lens:

  • Does this model track social shortfall?
  • Does it track ecological overshoot?
  • Does it allow collapse?
  • Does it allow injustice?

A model that cannot represent:

  • poverty,
  • biodiversity loss,
  • or climate thresholds

cannot evaluate whether paths remain inside the safe-and-just space.

That is not a technical oversight.

It is a normative boundary.


7 Exercises

  1. Model autopsy.
    Find a policy report that uses a model.
    Identify:

    • one assumption about behavior,
    • one missing stock,
    • one implicit objective.
  2. Figure interrogation.
    Choose a graph of projected emissions or GDP.
    Write three questions that must be answered before trusting it.

  3. Design critique.
    In one paragraph, explain why “the model says so” is not an argument.


This appendix completes your training as a reader of Earth–economy models.

You now know how to:

  • think in systems,
  • design policies,
  • build futures,
  • and question the machines that claim to describe them.

That combination is rare.

And necessary.