Thursday, February 18, 2010

Ecological Economics - Revaluing the Environment

Growth for growth’s sake is no longer an option. Ecological economists are calling for a ‘green’ revision of incentives and investments, as the starting point for achieving societies that are sustainable in environmental, social as well as economic terms.

Peter May, past president of the International Society for Ecological Economics, has written an excellent summary of the role of ecological economics in the transition to a sustainable economy (appearing in the current issue of The Broker). He contrasts the principles of ecological economics (EE) with those of mainstream economics and points out the key fundamental difference — EE practitioners recognize that the economy is a subsystem of the biosphere, while mainstream economists tend to view the economy as the whole and the environment as the subsystem.

Principles of ecological economics

EE takes as its starting point the notion that the economy is situated within the biosphere (in contrast with mainstream economic theory in which environmental problems are considered only as external reflections of the larger economic system). Resources such as air, water, food, wood, fibre, minerals and energy sources are the foundation of the economy. The economy also draws on the Earth as a sink for its wastes, such as carbon dioxide, toxic chemicals and chloro-fluorocarbons.

Facing reality

What does all this imply for the green economy? From an EE perspective, business as usual is no longer an option. A return to the expectation that a bull market will allow us to ‘grow our way out’ of crisis would mean we have learned nothing.

Rather, it is time to face the reality of biophysical limits and to find institutional and behavioural responses to the underlying contradictions that have brought the global economy to its knees, and that have degraded biodiversity and overheated the planet.


1 comment:

  1. I wonder what the nature of these biophysical limits are. Absolute? Relative? Local? Global? Laws of thermodynamics might give a sense. Energy and matter is not destroyed - it takes on different forms. And, although entropy increases it is not happening in an isolated system, We have enormous amounts of energy entering the systems all the time and lots of waste heat escaping into space all the time. I think ecological economics can easily fall into the trap of absolute interpretation of closed system entropy. What's your thoughts?