Ecological Economics vs. Environmental Economics
Definition
Ecological economics
Ecological economics is an interdisciplinary field that studies the relationship between economic systems and the environment, recognizing that the economy operates within the Earth's ecological limits.
It emphasizes sustainability, the value of natural capital, and the integration of ecological and social factors into economic decision-making.
Core Principles of Ecological Economics
The Economy as a Subsystem
- The economy is part of the biosphere, meaning economic activity depends on natural capital (ecosystems, biodiversity, and resources).
- Finite planetary boundaries limit how much the economy can grow.
Natural Capital & Sustainability
- Natural capital (e.g., forests, soil, water, air) is just as valuable as financial, human, and physical capital.
- Unlike traditional economics, which treats nature as a resource for exploitation, ecological economics prioritizes conservation.
The Precautionary Principle
If an action might cause harm to the environment, precautionary measures should be taken even if scientific certainty is lacking.Example
Banning pesticides suspected of harming pollinators before conclusive proof emerges.
Emphasis on Circular Economy
- Reducing waste and ensuring resources stay in use for as long as possible.
- Encouraging recycling, reusing, and regenerative design.
The Ecological Economics Model
Biosphere (Natural System)
- Inputs: Solar energy fuels all life processes.
- Provides: Raw materials, ecosystem services, biodiversity.
Economic Subsystem (Human Economy)
- Uses: Natural resources (e.g., fossil fuels, minerals, forests) for economic activity.
- Produces: Waste, pollution, and low-grade thermal energy loss.
Core Idea:
- Traditional economics ignores ecological limits and prioritizes GDP growth.
- Ecological economics advocates for a steady-state economy, where consumption stays within planetary limits.
Economic Valuation of Ecosystem Services: Environmental vs. Ecological Economics
Both environmental and ecological economics deal with valuing ecosystem services, but their approaches differ:
