The Case for Ecological Economics
Read a summary or generate practice questions using the INOMICS AI tool
In 2018, the World Meteorological Organization published its statement on the State of the Climate. The report showed that the 20 warmest years on record have occurred in the last 22 years. In the same year, the State of Californiaâs Energy Commission published a report linking changing atmospheric conditions due to global warming as a direct cause of the devastating forest fires that swept through California, burning nearly 1.9 million acresâ of land and costing more than US$3.5 billion of damages.
In 2017, the Lancet Countdown on Health and Climate Change found that 153 billion working hours had been lost worldwide due to high temperatures, predominantly on farms, and that high temperatures were simultaneously affecting the ability of crops to grow. And Professor Paul Elkins of University College London argued in response to these findings that tackling climate change âis going to be a net benefit to humanity in monetary terms.â
But economics hasnât cottoned on. Most dominant economic theories work on the assumption that technology and progress can overcome any biological/ biophysical limitations the earth may have. This, of course, isnât true; we are beginning to see some of the limitations of our unsustainable existence, the above being just a few examples. In 1966 economist Kenneth Boulding called this economic conception of the world the âcowboyâ, that being a metaphor of the noble wanderer who roams the âillimitable plainsâ of endless discoverable resources with no thought that they might, at some point, come to an end. Boulding said all the way back then that the problems our planet is facing are ânot all in the future by any meansâ. Indeed, they are currently more visible than ever.
But this apathy or disinterest with dealing with the problem of climate change isnât limited to economics. A 2018 Gallup poll revealed that only 64% of Americans think climate change is caused by human activities, and of those only 45% believe it will be a serious threat in their lifetimes. In the Pacific countries and east Asia, only 37% believe climate change will harm them personally, and just 26% of people in the Middle East believe climate change is a problem that is harming people right now. Multiple techniques have been used to change attitudes, including showing the connections between climate change and air pollution and health problems, or to things like the aforementioned forest fires in the USA.
Multiple techniques have been used to change attitudes, including showing the connections between climate change and air pollution and health problems, or to things like the aforementioned forest fires in the USA. A common tactic is to show people how important it is to take a personal responsibility for the problem. Unfortunately, this often causes a phenomenon called cognitive dissonance, which is a feeling of discomfort when a personâs beliefs are challenged by new evidence given to them. In the case of climate change, this actually causes people to turn away from the issue due to feelings of guilt, rather than work to combat it. Instead of giving people personal responsibility, a better method is to get people to believe climate change is a communal issue that requires action from the whole community, society, and world.
However, a small but growing field of economics wants people to think about the environment in a different sense altogether. If questioned, would you be able to estimate the monetary value of the earthâs ecology? If this figure existed, would it make people stop and think a little harder about exactly what it is weâre destroying? Would it make people care more about the environment if they knew mistreating it would negatively impact the economy? These are questions ecological economics aims to answer.
Cowboys and cosmonauts
Ecological economics is, in part, a reaction to the traditional cowboy conception of the world. Bouldingâs idea was to instead think of the world as a âspaceman economy, in which the earth has become a solitary spaceship, without unlimited reservoirs of anythingâ, and in which human beings must find their natural, sustainable state. In this metaphor, all we have is what is on our spaceship with us â and when that runs out, the money runs out, too.
As Robert Costanza, a leading ecological economist, put it in his 1989 article âWhat is Ecological Economics?â, the discipline aims to âmake economics more cognizant of ecological impactsâ and simultaneously âmake ecology more sensitive to economic forces, incentives, and constraintsâ. Costanza reiterated what Boulding had said over twenty years before: âcurrent economic paradigms⊠are all based on the underlying assumption of continuing and unlimited economic growth.â To combat what Costanza saw as the âignoranceâ humans have of the worldâs environmental and economic interdependence, he explored technologyâs capacity to circumventthe limits of the environment. His conclusion? Technology canât endlessly circumvent the environment. The limits exist, and economics needs to realise this, soon.
Ecological economics argues that using only GDP as a metric (as many economic fields currently do) is unreliable because it doesnât take into account the costs of things like pollution and deforestation; in its place, it argues for GPI, Genuine Progress Indicator. GPI uses the same data as GDP, but adds things like income gaps, poverty rates and environmental damage. By this judgment economic worth peaked per person in 1978 and we have actually become poorer due to our destruction of the environment.
In this sense, the discipline bears similarities to the green and environmental movements that began gaining ground in the 1970s. Ecological economists recognise â and they argue that âstandardâ economists often donât realise this, or at least choose to ignore it â that growth cannot be endless. In an interview from 2010, Costanza noted that âin nature, things donât grow foreverâ. Instead, organisms reach their natural adult size, and then they stop. But this doesnât mean they stop improving. Organisms continue to develop even after they stop getting physically bigger â like an adult human that isnât getting any taller, but continues to read books and go to the gym to get smarter and fitter. Constanza admits that the thought of the economy no longer growing is a terrifying one for regular economists, but argues that the economy stalling isnât a bad thing. Rather, what is needed now is progression to a âsteady stateâ, in which our society still improves, but our economy doesnât get bigger.
The revolution will be green
In a nutshell, ecological economics attempts to show how human economies and natural ecologies are intrinsically linked and have evolved together through time. The field bridges the gap between economics and several other disciplines, including archaeology, history and anthropology. It wants to change the common understanding that human technology can overcome any boundaries the world throws at us by showing that this judgment is unsustainable and, essentially, wrong.
But ecological economics is more than a call to action for economists to change the way they think about the world: it also tries to talk about the natural world in a way people can understand. In 1997, a paper came out that estimated the value of âecosystem servicesâ â that is,the monetary value of the ecological systems that contribute to human civilisation â at $33 trillion per year. The GNP of the entire world at the time was around $18 trillion. Talking to people in terms of monetary figures helps them comprehend the worth of the environment and the scale of the problem. Money talks. Ecological economists have grasped that.
Whatâs the solution to the forthcoming environmental disaster, then? Sustainable development and green policies, according to ecological economists. The International Society for Ecological Economics, for example, states its purpose as âdeveloping a sustainable world.â Its solutions to the current problems include research into environmental tax reform, how equity relates to sustainability, and how ecological and economic models can be integrated to protect biodiversity and the earthâs atmosphere. To this end, it publishes the latest cutting-edge research on topics such as clean development, transnational conservation projects, and the effects of deforestation in its journal. And itâs not the only one: thereâs also the International Journal of Ecological Economics and Statistics, founded in India, which aims to link the discipline to a closer study of ecological statistics. But this isnât just research for the sake of research â the field wants to change peopleâs attitude towards ecology, and genuinely influence policy.
The International Society and these two journals have developed against the backdrop of a rapidly deteriorating environmental situation and a political sphere that doesnât seem to care about the crisis weâre facing; yet at the same time, the green and environmental movements have never had more public support. With natural disasters abounding, Western countries dropping out of climate agreements, and nonsensical debates over the actual existence of climate change still being held, the field has an essential role in showing that the economy is fundamentally linked to the natural world we are rapidly destroying. As it becomes increasingly clear that environmental catastrophe is just round the corner, itâs time for economists â and politicians, and everyone else â to finally start paying attention.
-
- Assistant Professor / Lecturer Job
- Posted 1 day ago
Two full-time Assistant Professor positions (research-focused)
At Faculty of Law, Charles University in Prague, Czechia -
- Postdoc Job
- Posted 10 hours ago
Post-doctoral position on âPolitical Economy of Climate Policyâ (m/f/d)
At Potsdam Institute for Climate Impact Research (PIK) in Potsdam, Germany -
- Conference
- Posted 2 weeks ago
39th RSEP International Conference on Economics, Finance and Business
Between 18 Apr and 19 Apr in Barcelona, Spain