Ecological economists see the economy as an open system. In thermodynamics, systems are classified as open to the entry and exit of energy and materials; closed to the entry and exit of materials though open to the entry and exit of energy, such as the Earth; and isolated systems (without the entry or exit of energy and materials). The availability of free energy and the cycling of materials allows life forms to become increasingly highly organized and complex. The same thing applies to the economy. Dissipated energy and waste are produced in the process. At least part of the waste can be recycled or, if not, the economy takes in new resources. However, if the scale of the economy is too large and its speed is too rapid, then natural cycles cannot produce the resources or absorb or assimilate the residues such as, for instance, heavy metals or carbon dioxide. In ecological economics, the economy is seen as embedded in the ecosystem (or, more accurately, in the historically changing, social perception of the ecosystem). The economy is also embedded in a structure of property rights to environmental resources and services, in a social distribution of power and income, and in social structures of gender, social class, or caste.

In contrast, in conventional economics the economy is seen as a self-sufficient system where prices for consumer goods and services and prices for the services of production factors, are formed. This preanalytic stand is reflected in the category of ‘externalities.’ Ecological economists (Norgaard, 1990) have disputed the view expressed in the 1960s by Barnett, Krutilla and many other resource economists that, since natural resources are cheap, they must be abundant. Markets are myopic, they discount the future; they cannot see future uncertain scarcities of sources or sinks. Ecological economists sympathize with attempts at ‘internalizing’ externalities into the price system, and they readily concur with proposals to correct prices by taxes such as ‘natural capital depletion taxes’ or taxes on pollution. But they deny that there exists a set of ‘ecologically correct prices.’

In summary, ecological economics is a new transdisciplinary field which develops or introduces topics and methods such as:

(a) new indicators and indices of (un)sustainability of the economy;

(b) the application of ecological notions of carrying capacity and resilience to human ecosystems;

(c) the valuation of environmental services in money terms, but also discussion on the incommensurability of values and the application of multicriteria evaluation methods;

(d) risk assessment, uncertainty, complexity, and ‘postnormal’ science;

(e) integrated environmental assessment, including the building of scenarios, dynamic modeling, participatory methods of decision making;

(f) ecological macroeconomics, the measurement of ‘natural capital,’ the debate between ‘weak’ and ‘strong’ notions of sustainability;

(g) relations between ecological and feminist economics;

(h) ecological distribution conflicts;

(i) relations between the allocation of property rights and resource management, and old and new communal institutions for environmental management;

(j) international trade and the environment, the ‘ecological debt’;

(k) environmental causes and consequences of technological change, relations between ecological economics and evolutionary economics;

(l) theories of consumption (needs, satisfactors) as they relate to environmental impacts;

(m) the ‘dematerialization’ debate; relations with industrial ecology;

(n) applications in business administration; and

(o) instruments of environmental policy, often centered on the ‘precautionary principle’ (or on ‘safe minimum standards,’ as developed by Ciriacy-Wantrup).

Only some of these points can be developed in the remaining space, doing some injustice by this choice to other work by ecological economists.

1. Origins

2. Scope

3. Disputes on Value Standards

4. Environmental Indexes of (Un)sustainability

5. The ‘Dematerialization’ of Consumption?

6. Carrying Capacity and Neo-Malthusianism

7. Final Remarks on Transdisciplinarity

References