Page 240 - Sustainable Cities and Communities Design Handbook

214 Sustainable Cities and Communities Design Handbook

2002, as simply downward revisions of company financials, when in fact these
crises represent only the beginning of corporate illegal misbehavior. The issue
of validation and verification of economic data is simply not statistics and
numbers (quantitative) versus fieldwork and observation (qualitative) data to
prove points or hypothesis but a combination of both (Casson, 1996).
Implementation of energy economics today has been traditionally done
(prior to deregulation, privatization, or liberalization) through a variety of
“mechanisms” by energy experts. HarvardWatch (2002) looked behind the
scenes of public policy and discovered, however, questionable direct links
between the objective experts at some universities and the energy private
sector. The “links” between scholars and experts and the companies violate
the credibility of economics as being either objective or scientific. Far more
important are the “networks” of people who develop and implement govern-
ment policies that impact the public through the private sector. As will be
described in the following sections, government policies do not just mean
regulations, tax, and incentive programs. They should also include, as Cali-
fornia has championed, economic accounting for projects/programs (Schultz,
2001) and the creation of market demand.
At this point, it is important to make note of how California government
found itself in the middle of redefining energy economics. The energy crisis
can never be fully explained (CEC, 2002), but one basic economic issue is
clear: the state government had to play an active role in solving the crisis. For
California, this meant that a number of measures and legal steps had to be
taken from long-term energy supply contracts, to emergency funds for con-
servation and efficiency programs, to incentives such as buy-down and rebate
programs, to expedited siting of new power plants.
As discussed earlier in some detail, other economists such as Borenstein
et al. (2002), Woo and Sachs (2001), and Nobel Laureates (2001) all agreed
that the energy crisis could be averted and changed if the government simply
took off all the price caps on energy. What is ignored traditionally by econ-
omists is a focus on the firm itself (Teece, 1998). Energy economics, however,
only discusses the companies as end users of energy such that energy flow, and
hence costs, should be controlled by the consumer’s awareness of “real-time
prices” (Borenstein et al., 2002).
Elsewhere (Clark, 2004a,b) argues that “qualitative economics” is a new
area of economics, within the interactionism economic paradigm. The purpose
of qualitative economics is to understand how companies work. Much of the
field is concerned with case studies as well as corporate descriptions of op-
erations and people. However, the most significant concern of qualitative
economics is to gather data to understand what the numbers mean. For
companies when they add, as Enron allegedly did, 2 plus 2 and got 5, the
meaning of those numbers is critical. The issue is that economics must