Ecological economics
Ecological economics is an interdisciplinary field that focuses on the relationship between human economies and the planet's ecological systems, emphasizing sustainable well-being for both people and the environment. Unlike mainstream economics, which often prioritizes continuous monetary growth and economic welfare, ecological economics seeks to create a holistic model of well-being that accounts for the interdependence of society and ecology. It recognizes that human economic activities are a subsystem within the greater ecological framework and that both require a balanced approach for sustainable development.
This field integrates insights from various disciplines, including philosophy, sociology, and environmental science, to address the complexities of resource use and environmental impacts. It highlights the dangers of overpopulation, unsustainable resource exploitation, and pollution, urging policymakers to adopt principles that ensure long-term ecological health. Key concepts include the internalization of external costs, ecological taxation, and the promotion of practices that align economic activities with ecological integrity. By advocating for equity and sustainability, ecological economics aims to foster a future where both human societies and natural ecosystems can thrive together.
Ecological economics
DEFINITION: Interdisciplinary research field pursuing human and environmental well-being under the premise of recognizing the human economy as a subsystem that functions within the planet’s ecological system
Ecological economics seeks to replace the mainstream economics paradigm of economic welfare and continuous monetary growth with a model of intra- and intergenerational, holistic, sustainable well-being for both humankind and the environment.
By utilizing transdisciplinary approaches, ecological economics investigates and tries to understand the complex interdependence of society, human economy, and ecological environment. Ecological economics acknowledges the fact that the interdependence of these systems is structured in such a way that the economic sector is part of the human society, which itself is embedded in the planet’s ecosystem. The existence of both, the economic sector and the society, are impossible without the ecological system.
In the Western context, precursors of ecological economics can be traced to ancient Greece: Plato drafted a model of a fairly sustainable economy in his dialogue Nomoi (Laws); also, according to Stoic philosophy, men should live according to nature. Kenneth E. Boulding’s seminal essay “The Economics of the Coming Spaceship Earth” (1966) cleared the ground for ecological economics, employing the concept of Spaceship Earth, which emphasizes that the planet—like a spaceship—is an (almost) closed system (insolation, the reception of solar energy by the earth, is an exception, along with other examples of that reach the planet or are emitted by it). Herman E. Daly and Robert Costanza, among others, are considered the main initiators of both the International Society for Ecological Economics (founded in 1989) and the society’s journal, Ecological Economics, which began publishing in 1989.
Transdisciplinary Approaches to Sustainable Well-Being
Although having its point of departure at the intersection of economics and natural (especially ecological) sciences, ecological economics’ transdisciplinary approach utilizes research findings from various other academic fields, such as philosophy—especially (environmental) ethics—history, political science, sociology, psychology, anthropology, biology, chemistry, geology, climatology, and physics. This approach is deemed essential, since mainstream economics has various epistemic shortcomings owing to its lack of multidisciplinarity and its instrumental view of the (in mainstream economics, ecosystemic goods and services are considered economic resources). In addition, such an approach is vital for addressing the well-being of individuals, the human society as a whole, and the planet’s ecological systems in a sustainable way, which, in turn, means that well-being is important not only for the present time but also for future generations and future ecosystems.
Ecosystemic Dimensions and Policy Instruments
Ecological economics observes that continuing overpopulation beyond the earth’s carrying capacity, unsustainable resource exploitation, overconsumption, and contamination beyond the function (the environment’s assimilative ability to absorb pollutants) will increase entropy (ecosystemic disorganization) and reduce as well as the aggregated quality of life on the planet. Particularly irreversible actions—such as the extinction of species and the overexploitation of nonrenewable resources—have to be avoided. Therefore, the principle of uncertainty and the precautionary principle play important roles in the planning of economic actions and the implementation of policy instruments; it is, for example, extremely difficult to predict very accurately the long-term impacts of nuclear on the ecosystem. Hence, to facilitate intra- and intergenerational justice or equity and individual, social, and ecological sustainable well-being (instead of short-term economic welfare for a few), particular policy instruments are recommended.
Mainstream economics is associated with certain market failures—for example, inefficient allocation of services and goods such as clean water and air in some locations. In ecological economics, the prices of resources, products, and services have to speak the ecological truth. The price of an airplane ticket should reflect the monetarized impacts of, for example, air and noise pollution. The approach of calculating and charging ecologically correct prices is also known as the internalization of external effects. To limit emissions, governments, communities, unions of countries, and certain nonstate entities may issue permits that producers can buy and trade. Ecological taxing and incentive systems are other measures that have been discussed.
Such measures are, however, not sufficient to prevent unsustainable external effects on the ecosystem. Concrete suggestions by ecological economists therefore include a decrease in the world growth rate, strong limitations on the exploitation of nonrenewable resources, and sustainable use of renewable resources (that is, use of these resources in such a way that they can regenerate). Other recommendations include, but are not limited to, more extensive as well as stricter and upcycling, a paradigm shift from conventional to farming, and a revaluation of economic mainstream values such as monetary wealth and economic growth.
Bibliography
Boulding, Kenneth E. “The Economics of the Coming Spaceship Earth.” 1966. In Valuing the Earth: Economics, Ecology, Ethics, edited by Herman E. Daly and Kenneth N. Townsend. Cambridge, Mass.: MIT Press, 1993.
Common, Michael S., and Sigrid Stagl. Ecological Economics: An Introduction. New York: Cambridge University Press, 2005.
Costanza, Robert, ed. Ecological Economics: The Science and Management of Sustainability. New York: Columbia University Press, 1991.
‗‗‗‗‗‗‗, et al. An Introduction to Ecological Economics. Boca Raton, Fla.: St. Lucie Press, 1997.
Daly, Herman E. Ecological Economics and Sustainable Development. Cheltenham, England: Edward Elgar, 2008.
Daly, Herman E., and Joshua C. Farley, eds. Ecological Economics: Principles and Applications. 2d ed. Washington, D.C.: Island Press, 2010.
Edwards-Jones, Gareth, Ben Davis, and Salman Hussain. Ecological Economics: An Introduction. Malden, Mass.: Blackwell, 2004.
Eriksson, Ralf, and Jan Otto Andersson. Elements of Ecological Economics. New York: Routledge, 2010.
Haddad, Brent M. and Barry D. Solomon. "Ecological Economics as the Science of Sustainability and Transformation: Integrating Entropy, Sustainable Scale, and Justice." PLOS Sustailability and Transformation, 22 Feb. 2024, doi.org/10.1371/journal.pstr.0000098. Accessed 16 July 2024.
Zografos, Christos, and Richard Howarth, eds. Deliberative Ecological Economics: Ecological Economics and Human Well-Being. New York: Oxford University Press, 2008.