Ecology, environment, economics

Lawrence Surendra

Teachers will agree with me that the first requirement to grasp and communicate any subject is clarity in understanding of the concepts involved and nesting them within sound conceptual perspectives that address both individual as well as wider system contexts. Here I share some thoughts on ecology and economy. I will be using both the terms environmental and ecological economics interchangeably well aware that the two are distinct disciplines and fields founded on different principles.

With regard to concepts such as ‘environment’, ‘ecology’ ‘sustainable development’, often, in the minds of young learners, there is bound to be a confusion given the overlapping nature of these concepts and at times their lack of preciseness. Many of these concepts are derived from both natural sciences and social sciences. Their inter-disciplinarity creates possibilities of pursuing knowledge, involvement, and even a career in any of the fields connected with either environment or ecology; but it also demands of young learners to acquire clarity of concepts, perspectives, and the ability to take stances based on the knowledge that they have acquired and internalized.

water However the ‘noise’ about the environment does not make it easy to acquire clarity around the terms and concepts of ecology and environment; the ‘noise’ often muffles the signals from nature and the environment. Physics defines ‘noise’ as being made of unwanted extraneous information which degrades the analysis of a problem and its precision and accuracy. While a signal carries useful information that is of value, it also alerts us to the potential threats or dangers that we may face. The ‘noise’ tends to drown out the signals that the environment is sending us, be it about air or water pollution or the loss of biodiversity; this makes it difficult for a young person leaving school to comprehend the enormity of the crisis facing our environment and the threats to the future of the human species and planet earth.

It is in the above context, at least at the school level, that I recommend adopting a knowledge approach that is open to both ecological economics and environmental economics. It is in this perspective that I use both disciplines within economics that deal with environment – ecology, and the natural resources. What however distinguishes both these related fields?

Environmental economics, originally started by dealing with what economics refers to as ‘externalities’. When the costs of damage caused by air or water pollution are externalized and become the burden of the society and not of those who cause such damage, it is termed as ‘externalities’. In the development of the discipline, methods, tools, and policy approaches were crafted to assist in the internalization of these costs. Gradually environmental economics took into consideration the valuation of natural resources, since the systems and methods adopted for accounting for economic growth such as GDP, in conventional economics, do not take into account the value of natural resources or the costs associated with their destruction. Environmental economics is seen as ‘anthropocentric’ or human centred and part of a paradigm that values economic growth as paramount.

Ecological economics is seen as being both anthropocentric and eco-centric and is considered to be more interdisciplinary drawing from both natural sciences such as biology and ecology as also wider social science disciplines such as ethics. Ecological Economics the transdisciplinary journal of the International Society for Ecological Economics (ISEE), describes the focus of the journal and consequently of ecological economics as dealing with “extending and integrating the study and management of nature’s household (ecology) and humankind’s household (economics).” (http://www.journals.elsevier.com/ecological-economics).

The Internet now makes it easy for both student and teacher to look for resources with regard to ecological economics and environmental economics and acquire knowledge of these two sub-disciplines of economics. Conceptual perspectives to internalize concepts central to the utilization and advance of these two sub-disciplines must go hand in hand with the knowledge, cognitive skills, and attitudes. Key concepts, such as ‘sustainable development’, ‘inter-generational equity’, trade-offs and ‘multiple capitals approach’ are integral to a good understanding of environmental and ecological economics. These concepts may be seen as unconnected and the interconnections may be missed. Such a situation arises because of a lack of an integrative view of the three interrelated dimensions of ‘economy’, ‘society’, and ‘environment’. The objective of ecological and environmental economics is to work towards an integration of these three dimensions.

The Brundtland Report defines ‘sustainable development’ as “development that meets the needs and aspirations of the present without compromising the ability of future generations to meet their own needs.” In-built in this definition is the notion of ‘inter-generational equity’, i.e., equity across generations and not only within one generation referred to as ‘intra-generational equity’. To achieve ‘inter-generational equity’, one of the central problems is that of ‘tradeoffs’, for example, between the short-term time horizons of markets and economies and the long-term requirements of ‘sustainable development’. This is a result of the unintended outcomes of policy that do not recognize the various forms of capital (what has been referred to as the multiple capitals approach later in the article) and the inter-linked nature of each of these forms of capital.

Four fundamental reasons for tradeoffs are:

  • Externalization of environmental and social values and the “tragedy of the commons”.
  • ‘Time gaps’, the usually lengthy time between investments in socially and environmentally beneficial actions and returns on those investments.
  • Institutional capacity and governance shortcomings that foster policy conflicts instead of coherence.
  • Complexity, scientific uncertainty and stakeholder perspectives are not factored in time, or capacities do not exist to deal with the complexity and scientific uncertainty.

The teaching and learning of ‘environmental’ or ‘ecological’ economics, can help undersatnd how each of these tradeoffs happen in any local or national context and how a ‘multiple capitals’ approach can avoid or transform the tradeoff into synergies.1 A multiple capitals approach helps frame the thinking around opportunities for integration for sustainable development. In this approach, five forms of capital are defined: manufactured, natural, financial, human, and social capital. An important contribution to the ‘multiple capitals’ approach is the contribution of Herman Daly (considered the prime mover of ‘ecological economics’), who presented what is referred to as the ‘Daly Triangle’. Daly2 refers to the different forms of capital to describe various inputs that contribute to the ultimate objective of increasing human well-being. This recognizes that each form of capital contributes to human well-being in unique ways. In contrast, the understanding that all forms of capital are substitutable (the weak sustainability approach) leads to the widespread acceptance that trade-offs are necessary and inevitable. For instance, if the services provided by the natural environment to the society and to the economy can be considered as substitutable by manufactured capital, the need to conserve natural capital can be considered as non-essential.

This leads to the assumption that the decline in other natural assets can be managed and that the needs of the future generations will be met as long as there is no decline in economic output. Such an approach is referred to as weak sustainability, whereby natural and other assets are declining while manufactured capital is growing. In such a perspective, natural capital and the services provided by nature are seen as substitutable by manufactured capital and are valuable only as long as they contribute to economic growth and welfare. However, it is increasingly evident that below certain stock levels (critical thresholds) particular components of capital are non-substitutable. Neo-classical economic theory has traditionally held that as long as there is no decline in economic growth, substitutes for exhaustible resources can always be found. Thus, there are no resource constraints (resource limits) to economic growth. But human beings have eventually discovered that even if resource limits are relative and can be overcome, the capacity of the planetary ecosystem (sink limits) to absorb the output of economic growth is absolute.

There are absolute limits to the planet’s carrying capacity, as evidenced through planetary disturbances such as global warming, climate change, and biodiversity loss. All this only goes to show that substitution between economic, manufactured, or classic capital and natural resources or natural capital cannot but become unsustainable in the long term and requires an approach where there is no substitution between the capitals. Such a strong sustainability approach provides a more effective basis for both policy formulation and outcomes to achieve integration of the three dimensions of sustainable development. The teaching of ‘environmental and ecological economics’ should be able to transmit and integrate this very important conceptual perspective and provide young learners the cognitive skills, tools and methods, and the attitude and value stances that are required for ensuring their future and that of the generations that come after them.

Environmental and ecological economics should help students critically differentiate between ‘noise’ and ‘signals’. The story of the Titanic sinking on its maiden voyage is not out of place here. Like the passengers on the Titanic we are all passengers on earth. The central message of the Titanic is not the love story that the Hollywood Epic portrayed. The real message is how, in the piles of congratulatory telegrams that arrived, the critical telegram informing the ship’s captain that the ship was heading in the direction of an iceberg and that it had to change course to avoid hitting the iceberg was buried. The message was read too late, as a result course correction would have been of no use and ultimately the Titanic hit the iceberg near New Foundland. We are in a similar situation. We have to make urgent course corrections in the way our economies are run and the lifestyles they engender. Environmental and ecological economics could help the current and future generations, who will bear the consequences of our life and lifestyles, to make such course corrections and avoid a disaster awaiting nature and human kind.

Sources

  1. http://www.unescap.org/sites/default/files/Integrating%20the%20three%20dimensions%20of%20sustainable%20development%20A%20framework.pdf
  2. Daly in Meadows, D. (1998). Indicators and Information Systems for Sustainable Development. Hartland, Vermont, Sustainability Institute.

The author is a chemical engineer and environmental economist. Currently, he is Chairman TSP (www.tspasia.org) of the Institution of Engineers (IEI). He has promoted for UNESCO, Education for Sustainable Development (ESD) among teacher educators and teachers in the Asia-Pacific Region. He is deeply interested in ‘Learning and Happiness’ [http://unesdoc.unesco.org/images/0015/001559/155943eb.pdf], promoting Sustainable Development Goals (SDGs) and the 2030 Road Map. He can be reached at ls@artofhappiness.co.in. You can also visit his website: www.mindfulness.co.in.