Ecological Economics

Definition

Ecological economics is an interdisciplinary field that merges ecological and economic principles to address the relationships between ecosystems and human economies. This approach emphasizes the importance of sustainability and the intrinsic value of natural resources, recognizing that economic activities must operate within the limits of the Earth's ecosystems to ensure long-term viability. The aim is to create economic systems that promote environmental health, social equity, and economic stability.

5 Must Know Facts For Your Next Test

1. Ecological economics emerged in the 1970s as a response to traditional economic models that often ignored environmental limits and ecological relationships.
2. This field seeks to redefine wealth by including natural capital and ecosystem services in economic assessments.
3. Ecological economists advocate for policy changes that reflect the true cost of resource use, promoting practices like carbon pricing to internalize environmental impacts.
4. The discipline emphasizes a systems approach, integrating various scientific fields such as ecology, economics, and sociology to inform decision-making.
5. Ecological economics aims for a just transition towards sustainability, recognizing the need for social equity in environmental policies and economic practices.

Review Questions

• How does ecological economics redefine traditional notions of wealth and value in relation to natural resources?
  • Ecological economics challenges conventional definitions of wealth by incorporating the value of natural resources and ecosystem services into economic assessments. Traditional economics often views wealth solely in terms of financial capital, neglecting the vital role that healthy ecosystems play in supporting human life. By recognizing natural capital as an essential component of wealth, ecological economics promotes a more holistic understanding that includes environmental health as a key indicator of economic success.
• Discuss how ecological economics influences policy-making related to resource management and environmental protection.
  • Ecological economics informs policy-making by advocating for approaches that consider both ecological integrity and economic sustainability. It encourages policies that reflect the true cost of resource extraction and environmental degradation, such as implementing carbon pricing or establishing sustainable resource quotas. By integrating ecological principles into economic policies, it seeks to create regulations that protect ecosystems while promoting responsible resource use, thereby fostering long-term sustainability.
• Evaluate the role of natural capital in ecological economics and how its recognition can lead to more sustainable economic practices.
  • Natural capital plays a crucial role in ecological economics as it represents the essential resources and ecosystem services upon which economies depend. Recognizing natural capital allows economists and policymakers to account for the benefits provided by nature, leading to more informed decision-making regarding resource use and conservation. By integrating natural capital into economic models, businesses can be encouraged to adopt sustainable practices that balance economic growth with ecological health, ultimately creating a more resilient and sustainable economy.

Related terms

Sustainable Development: A development approach that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Natural Capital: The world's stocks of natural assets, including geology, soil, air, water, and all living things, which provide ecosystem services that are essential for human survival.

Carrying Capacity: The maximum number of individuals or species that an environment can sustainably support without degrading the ecosystem.