Chapter 23: Ecological Economics

23.1 Economic Worldviews

• Can development be sustainable?• Our definitions of resources shape how we use

them • Classical economics examines supply and demand • Neoclassical economics emphasizes growth• Ecological economics incorporates principles of

ecology• Communal property resources are a classic

problem in ecological economics

Freedom and Growth

• 1200-1500 Growth in European internal markets

• 1500-1900 Territorial Expansion• 1700-2000 Scientific and Technological

Expansion• Everyone gets a Bigger Slice• Can Freedom Exist in a Zero-Sum World?

The Laffer Curve

23.2 Population, Technology, And Scarcity

• Scarcity can lead to innovation• Carrying capacity is not necessarily fixed• Economic models compare growth scenarios• Why not conserve resources?

23.3 Natural Resource Accounting• Gross National (Domestic) product is our

dominant growth measure • Alternate measures account for well-being• New approaches incorporate nonmarket

values– Nonmarket values can’t be spent in the

marketplace• Cost-benefit analysis aims to optimize

resource use

23.4 Market Mechanisms Can Reduce Pollution

• Using market forces • Is emissions trading the answer? • Sulfur trading offers a good model • Carbon trading is already at work

23.5 Trade, Development, and Jobs• International trade brings benefits but also

intensifies inequities– NAFTA

• Aid often doesn’t help the people who need it– Theft, Misappropriation– Inefficiency and Bureaucracy– Ethnic, Religious and Class Rivalry

• Microlending helps the poorest of the poor

23.6 Green Business

• New business models follow concepts of ecology

• Efficiency starts with design of products and processes

• Green consumerism gives the public a voice • Environmental protection creates jobs • Personally Responsible Consumerism