NURC: Project ID - 1239/2007
Title: INVESTMENT PROJECT MANAGEMENT DEVELOPMENT FOR ACHIEVING A DINAMIC BALANCE BETWEEN ECONOMY AND ECOLOGY
Director: Prof. Dr. SZENTESI SILVIU GABRIEL
"AUREL VLAICU" UNIVERSITY OF ARAD,
FACULTY OF ECONOMICS
ARAD, Bd. REVOLUŢIEI, Nr. 77
Email: szentesiges@ rdslink. ro
- Prof. Dr. SZENTESI SILVIU GABRIEL
- Prof. Dr. Cristescu Gabriela
- Assist. Dr. Crişan Simona
- Assist. Dr. Franţescu Marius
- Assist. Drd. Vizental Mihaela
Abstract. The achievement of an economic-ecological equilibrium on national, regional (European) and global level has become necessary. The economic activity has to be reconsidered on ecological criteria, without, however, neglecting a scientific approach of this issue. An economically and ecologically well balanced society is able to provide maximum welfare, under the restrictive existing circumstances, ensuring, at the same time, a sustainable development. One of the ways through which the economic-ecological equilibrium can be achieved, is the grounding, from a new perspective, of the investment projects in fix assets and the elaboration of a model that should correspond to a dynamic economic-ecological equilibrium. In the future, the implementation of management models, that should ensure such an equilibrium, will result in increasing the society's welfare. The achievement of this equilibrium, at macro level, presupposes the initiation of environment rehabilitation projects and programs or enviromental preservation projects which are costly and limited as far as their financing is concerned. The solution, by our research project, is based on the experience of the research team and consists in the elaboration of a management model for the investment projects, so as to ensure the achievement of an economic-ecological equilibrium, first at microeconomic level. This equilibrium can be obtained starting from the individual investment projects, that have an impact upon the environment and which have to ensure it based on some criteria and on a management model. The economic-ecological equilibrium, at macro level, is a consequence of the partial equilibriums, generated by each project of fixed assets. The fundamental criterion for the optimization of this equilibriums is the welfare. The path, we plan to follow, consists in the economic evaluation of the natural environment and the beneficial ratio of the projects accomplishment versus that of the environment preservation.
Reasons and international research background
The achievement of the economic-ecological balance has become, at the beginning of the XXI- st century, in Europe and worldwide one of the issues of utmost importance for the smooth development of regional economies and for man's welfare. What in the past was looked upon as a somewhat frivolous concern for birds and rabbits, has been considered nowadays by the great majority of scientists as a question of survival both form mankind and for the planet. The cumulative effect of the mankind activity threatens ecological systems on which the entire mankind depends. Many political leaders worldwide have demanded the establishment of new ways of international cooperation meant to ensure environmental security at planetary level.
A good example in this respect is the Kyoto Protocol which is an international agreement concerning the environment. 160 countries negotiated the Protocol in December 1997. The agreement stipulates, for the industrialized countries, a 5.2% cut in pollutant emissions between 2008 and 2012, as compared to the quantity of gas emissions released in the atmosphere in 1990. Romania is a party in this agreement and as such, it is going to take a series of measures concerning the observance of the provisions stipulated in the agreement. Although as far as the chapter on climate changes is concerned, Romania has obtained a green flag in the last Country Report of The European Commission, The Ministry of the Environment and Water Management continues to make efforts to meet the EU requirements and has elaborated a National Plan of Allocation, which is currently under public debate. The National Plan of Allocation represents a very important step forward towards the creation of the conditions necessary for the implementation of The Trading Scheme of Greenhouse Gas Emission Certificates- a European regulation concerning environmental protection, compulsory for all EU member states. 222 installations are included in the National Plan of Allocation, while the number of certificates for the year 2007 has been established at 81.317.000. 457.391.000 certificates will be allocated between 2008 and 2012. Several scientists, such as Ronald Coarse in his book Issues of Social Costs, J. H.Dales in Pollution, Property and Prices, Brown Lester in Building a Sustainable Society, Constanza Robert in Ecological Economics, Perce David W. R. Turner Kerry in Economics of Natural Resources and Environment, Pigou A. C. I in The Economics of Welfare and many others have presented highly important concepts regarding the scientific research, the relevance of the thematic field to which the proposed theme belongs.
In 2003, T. Maine (CSIRO Publishing) highlighted the lack of sustainability quantitative indicators. Ravi Jain (Clean Techn Environ Policy 7: 71-72), in 2005, showed that a successful sustainable development depends on the determination of a measurable entity used for sustainability.
At the initiative of Yale Centre for Environmental Law and Policy (YCELP) and of the Center for International Earth Science Information Network (CIESIN) from Columbia University, in collaboration with World Economic Forum and Joint Research Centre of the European Commission, an Index of Ecological Sustainability (ESI) was established. It launched at Davos, Switzerland, at the annual meeting of the World Economic Forum (WEF) on January 28, 2005.
Admitting the fact that the Earth is definitely FINITE, the conclusion drawn was that human activities have to be limited if we want an unlimited survival on our planet. A series of models for the utilization of resources are in use, in order to be able to distinguish between the destructive and non-destructive or beneficial activities. Some models include an evaluation of the life cycle and the analysis of the ecological footprint. (S. Zhao, Z. Li and W. Li in Ecological Modelling, 2005). There is at present such a sustainability index, based on this technique - Ecological Footprint Index.
The Global Reporting Initiative is an independent institution that develops and disseminates instructions and practices concerning the reporting of sustainability. The Group uses the analysis of the ecological footprint and cooperates officially with the United Nations on ecological issues.
The concepts of the sustainable development may act jointly if used wisely, due to six factors identified by Hargroves and Smith in 2005:
- The research At present, the multiple benefits of the human and natural capital evaluation are taken into account, both from moral and economic viewpoint. These considerations are included in the measures taken for people's welfare.
- In various economies, there is a wide range of unexploited potential resources that may improve productivity, if efficiently and adequately planned.
- After three decades, it has finally been understood what is that creates long term competitiveness for a company
- There is at present a significant set of new eco-innovations that allow for integrated approaches for a sustainable development
- As many of the costs incurred by ecological externalities are borne by governments, on long term, sustainable development strategies may bring multiple benefits to the tax payers.
- There are clear proofs that the transition towards a sustainable economy, if carried out wisely, will not affect significantly economic growth. completed by Joachim Spangenberg shows that this transition, if focused towards the optimization of resource productivity will lead to an economic growth, for the businesses, reducing at the same time the pressures upon the natural environment.
The proposed research theme brings an important contribution to the development of science field due to its novelty and highly interdisciplinary character. Its novelty resides in the fact that, at the time being, there is no management model at micro economic level providing the scientific grounding for the decision to carry out an investment project of fix assets that should ensure both an economic-ecological equilibrium and efficiency as far as individual and social welfare are concerned. The interdisciplinary character is also an essential element opening new horizons of utmost importance for the current scientific research as it brings together aspects such as the evaluation of the natural environment from economic and monetary perspectives, an issue, which has not been solved by contemporary economic discipline so far, as well as mathematical model concepts and IT technologies. The elaboration of an economic-ecological model based on a welfare optimum is a great challenge for contemporary science. The quantification of certain global effects concerning welfare by setting up correlations between the level of economic activity and that of pollution also represents an important issue of contemporary scientific research in the field.
Sustainability is a systemic concept, related to the continuity of economic, social, institutional and environmental aspects of human society and of non-human environment. The configuration of civilization and human activities should develop in such a manner as to allow the members of the society to meet their needs and freely express their potential without affecting biodiversity and natural ecosystems. At the same time, these sustainable development ideals should maintain on long term. Sustainability affects all organizational levels, from that of the local communities to the entire planet. Commonly, sustainable development is the "development that meets the needs of the present without compromising the ability of future generations to meet their own needs. " Sustainability in engineering incorporates ethical and social issues into the design of products and processes that have to use to benefit society as a whole.
The International Sustainability Indicators Network (ISIN) were established in 2001 to connect people who work on or are interested in using sustainability indicators to measure progress toward sustainability in their communities, companies, countries, and the world. The Network has two primary objectives:
- to coordinate communication among practitioners of sustainability indicators,
- to increase the visibility and understanding of best practices related to sustainability measurement and indicators.
The mission of the Business, Markets and Sustainability Indicators Work Group is to examine how businesses can better measure and assess their triple-bottom-line sustainability performance and how the sustainability practices of business can contribute to improved quality of life and sustainability at the community, state and national levels. We examine best corporate practices in economic, social and environmental reporting with an eye for model sustainable business.
John Hopkins created in 2001 the concept of Creative economy - Thomson scientific. Each country draws up its own 'property contract' to balance the need for private property against the need for a sustainable 'public domain'. Countries fall into four main camps. The US and Japanese take a 'utilitarian' approach, preferring commercial exploitation at all costs. Most of Asia's newly-industrial economies that take their business models from America follow its lead in these matters. Second, European countries, notably the French and other Continental countries whose legal systems are based on the Napoleonic Code, put a greater emphasis on protecting a creator 's ' natural' rights. Third, the UK stands somewhat awkwardly between the utilitarian and natural law approaches. It favors America 's commercial approach but, as a member of the European Union, it is obliged to keep in harmony its laws with its neighbors.
There is an even greater disparity between these Western camps and the fourth camp, which is composed of all rural, developing and still-emerging economies.
Evaluation of the impact of the expected results
Recommendations to various institutions:
- The model will be available, for practical applications, to the local environment agencies, being an useful instrument in the social, financial and even political decision making foundation.
- At the scientific level, the research project will open new horizons in today's economic research and in adaptive management.
- At the level of the European integration, the project will help the easier accomplishment of environmental standard asked within UE.
- Socially, the project will have an impact on the increase of the social efficiency and of individual, community and whole human collective welfare.
- Ecologically, the research will have an impact on the increase of the quality of the environment and on the ecologic equilibrium.
Collaboration: Agenţia de Protecţia Mediului Arad
Duration: 2007 October 1-2010 September 30
Remark. Information referring to the development of the project and its results will be published on this site at each stage.
- 2007 - Team building, logistics.
- 2008 - The results obtained by the project team during 2008 are in published papers and 2 papers submitted for publication:
 Cristescu, G., Extra-financial multiple criteria optimization model for assessing the ecologic-economic efficiency of an environment policy, Annals of the Oradea University, Fascicle of Management and Technological Engineering, VII (XVII), 2067-2072, 2008.
Szentesi, S.G. , Cristescu, G., Environmental Valuation Techniques, Annals of the Oradea University, Fascicle of Management and Technological Engineering, VII (XVII), 2782-2789, 2008.
 Cristescu, G., Neamţiu, L., Szentesi, S.G. , Multiple Criteria Optimization Models for solving Contemporary Issues in Decision Making, Proceedings of the Workshop on OR and Ethics, Third Human Centered Processes Conference (HCP - 2008), Delft University of Technology, June 8-12 2008, Delft, 121-131, 2008.
 Jitaru, L., Cristescu, G., Proiecte de îmbunătăţire a condiţiilor de muncă ale mecanicului de locomotivă, Proceedings of the International Symposium "Research and Education in an Innovation Era", Engineering Sciences, Universitatea "Aurel Vlaicu" din Arad, 20-21 Noiembrie 2008, 183-190, 2008.
 Crişan, S., Hălmăgean, L., Bociort, D., Possibilities of elimination the arsenic from underground waters in the western part of Romania, Proceedings of the First Conference with International Participation "Modern Technologies and Biotechnologies for Environmental Protection", 2008 June 5-7, Sibiu, Romania, 8-11, 2008.
 Hălmăgean, L., Crişan, S., Bio-fertilizers - nitorgen source in ecological vegetable gardening, Proceedingsof the First Conference with International Participation "Modern Technologies and Biotechnologies for Environmental Protection", 2008 June 5-7, Sibiu, Romania, 29-32, 2008.
2009 - The results obtained by the project team during the first 5 months of 2009 are in 4 published papers and a paper submitted for publication:
 Cristescu, G., Szentesi, S.G. , Ecologic-economic efficiency by non-numerical multiple criteria decision methods, Annals of the Oradea University, Fascicle of Management and Technological Engineering, VIII (XVIII), 1098-2006, 2009.
 Szentesi, S.G. , Cristescu, G., Modern numerical approach to economic-environmental balance for investment projects, Annals of the Oradea University, Fascicle of Management and Technological Engineering, VIII (XVIII), 2976-2982, 2009.
 Jitaru, L., Cristescu, G., Sagging and induced stress of the light-gauge sheer submitted to the expansion process, AFASES 2009 - The International Session of XI-th Scientific Papers "Scientific Research and Education in the Air Force", 20-22 May 2009, Braşov, Management, 203-207, 2009.
 Cristescu, G., Jitaru, L., The regulation of the power for the modernized electrical railway-engine BO-BO of 3400KW, AFASES 2009 - The International Session of XI-th Scientific Papers "Scientific Research and Education in the Air Force", 20-22 May 2009, Braşov, Electrical and Electronical Engineering, 687-690, 2009
 Szentesi, S.G. , Franţescu, m. Fundamenting the Enviromental Economical Balance Modelling for Investment Projects having a major impact on Environment (case study CET Arad), 16th International Economic Conference "Industrial Revolutions from the Globalization and post-Globalization Perspective", Facultatea de Ştiinţe Economice a Universităţii "Lucian Blaga" Sibiu, May 2009, Sibiu.
On 4 and 5 November 2010, the city of Békéscsaba held a symposium on issue civil society and the environment organized by MTESZ (Union of Professional Associations in Hungary), Szent István University, Faculty of Economics and the City Hall of Békéscsaba. At this symposium were disseminated parts of research results achieved in the project Idei 1239/2007.
It was emphasized the importance of achieving balance between economy, society and the natural environment and effectiveness of the implementation of models to be an instrument for achieving this desiderat. It was discussed the possibility for future collaboration in projects, scientific research and higher education.
Between 22-24 of November professor Szentesi Silviu-Gabriel, director of project Ideas 1239/2007 visited Madrid Complutense University from Spain, the Economic Science and Business Administration Faculty, a state and prestige university for partner dissemination related on scientific results of the project. Partner dissemination is an efficient practice for open up new outlook for cooperation between universities and research team from different countries. Spanish part was represented by the Head of Economic Analysis Department professor dr. Emilio Cerda Tena and professor David Martin.
Dissemination of results through comprehensive reference papers
In Project IDEI 1239/2007 were published two important works, in order to disseminate the most effective results.
The first paper "Modeling economic - ecologic equilibrium for investment projects" is in Romanian and is useful for environmental agencies in Romania, universities and research centers.
A second paper, in English, is actually the number 2/2010 of "Journal of Economics and Business Research" of Centre for Economic Research and Consulting, financially supported from the project, which has as objective the dissemination of results achieved internationally. There have already been sent copies of these papers at universities and research centers in Germany and Spain to collaborators of the Centre for Economic Research and Consulting.