Introduction
The study of human behaviour with respect to how human beings produce, distribute, and consume goods and services, commonly known as economics, is a wide and an engrossing field of study. Economics inquires about how economies work and how economic units interact. From Marx, through Smith to Schumpeter, the discipline has developed significantly in terms of its nature, scope, and theoretical frameworks used by economists to approach a given phenomenon of interest.
Contemporary economic theories emerged from the field of political economy towards the end of the nineteenth century. Notably, a fundamental motivation for the growth of contemporary economics has been the need to apply empirical approaches. Economic knowledge plays a critical role in the process of a country’s growth and development.
In fact, books authored by the distinguished economic philosophers as Karl Marx and Adam Smith like “Das Capital” and “The Wealth of Nations: An Inquiry into the Nature” respectively, have been termed to as books that changed the world together with Sir. Charles Darwin’s infamous book titled “The Origin of Species.” This task is an exploration of the ecological approach to economics.
Key features
Ecological economics (EE) refers to a trans-disciplinary field of economic studies that deal with the interdependence and co-evolution of world economies, and the natural ecosystems over space and time (So¨derbaum1998, p.1). Ecological economics encompasses the study of a society’s metabolism or energy flows and materials that get into and out of a typical economic system (Daly, & Farley 2010, p.4).
In this sense, it has been seen and referred to as bio-economics or biophysical economics with connections to industrial symbiosis (Daly, & Farley 2010, p.4). In other words, EE is premised on a theoretical model that sees the economy as linked to, and sustained by, a flow of energy, ecosystem services and materials (Daly, & Farley 2010, p.4).
In fact, scholars from various disciplines of study have attempted to study the relationship between an economy and the environment, with emphasis on energy, environmental quality, material flows, sustainability and economic development. In its modern version, EE is a relatively new field of study. However, this does not necessarily imply that it does not have historical roots that can be traced.
For instance, according to Hussen (2004, p.246), EE traces its roots to as far as the pre-classical Physiocrats. Hussen points out that, the essential foundations “…of the Physiocratic school of thought was that all economic surplus was derived from the productive power of land, or its modern equivalent, natural resources” (p.246).
In other words, the Physiocrats believed that land was the fundamental source of economic or material prosperity. So¨derbaum (1998, p.1) argues that, ecological economics is based on a value-commitment to explore environmental matters and add value to the highly sought sustainable development.
Ecological economics has key features that differentiate it from other mainstream economics sub disciplines. The first significant feature of EE is its apparent commitment to push for sustainable development ecologically (So¨derbaum 1998, p.2). Ecological economics sees the economy as a subsystem of the wider ecosystem and puts a lot of emphasis upon the preservation of the natural capital (Daly, & Farley 2010, p.4).
The discipline emphasizes strong sustainability and denounces the notion that natural capital can be replaced by artificial capital (So¨derbaum 1998, p.2). Ecological economics is also strongly characterized by its readiness to deal with the basic issues of theoretical values and framework. This feature derives from the first characteristic.
For ecological economists, it is more critical to protect the environment than the neoclassical paradigm (So¨derbaum 1998, p.2). Ecological economists maintain that if an economy’s likelihood of attaining sustainability gets higher by reconsidering concepts, values and paradigms, then it should go ahead and do so without delay.
Another outstanding feature that is related to the above mentioned characteristics is the belief in the value of interacting with academics from other disciplines (So¨derbaum 1998, p.2). Ecological economists believe that economists can co-operate with ecologists in their learning processes. There are various disciplines that can add value to EE apart from ecology.
Furthermore, ecological economists emphasize the importance of going beyond the university frontiers to learn from and have a dialogue with various stakeholders such as business leaders, members of civil society organizations, and political leaders (So¨derbaum 1998, p.2).
The fourth fundamental characteristic of ecological economics is the emphasis on the importance of observing and upholding tenets of democracy. This feature in a given way summarizes what ecological economics stands for as a discipline in relation to development needs of a society. Ecological economics negates the idea that science should be separated from the society (So¨derbaum 1998, p.2).
Ecological economists hold that principles of democracy are essential for all academic work. Their belief is founded on the premise that it is unethical and wrong for scholars to propose methods that are not compatible with imperatives of democracy (So¨derbaum 1998, p.2). For example, ecological economists hold highly the importance of learning from and listening to stakeholders outside university walls. So¨derbaum (1998) observes that, “In many cases, new thinking and new visions emerge from such sources.” (p.2)
As the world has gradually transformed from being an arguably ‘empty’ world in to a relatively ‘full’ world, the importance of EE in dealing with global resource and environmental issues has been extensively acknowledged (Hussen 2004, p.248; Daly 2008, p.87). During the last three decades, a revival of interest in EE has been principally remarkable (Hussen 2004, p.248).
For example, in 1988, the International Society for Ecological Economics (ISEE) was formally launched. Hussen (2004, p.248) points out that currently its membership surpasses 15, 000 and that the society is indeed international in terms of its membership and missions. However, the influence of ecological economics up on the mainstream economic profession has been considerably trivial despite an evident renewal of interest in ecological economics over the course of the last three decades.
According to Hussen (2004, p.248), traditional economists oppose demands by ecological economists for a change in the neoclassical growth theoretical approach. Therefore, even though many mainstream economists find the work of distinguished ecological economists like Boulding and Daly fascinating, they do not see anything new other than a new turn on the outdated neo-Malthusian manner of thinking.
Strengths and weaknesses
Critics have described the identity of ecological economics as weak and one that lacks the generally accepted conceptual framework (Dovers, & Stern 2003, p.5). It has also been dismissed as having a knowledge structure that is not clearly defined (Dovers, & Stern 2003, p.5).
However, ecological economists rebut this criticism by pointing out that ecological economics is distinguished by its distinct focus on time, nature, and justice (Daly, & Farley 2010, p.4). Unlike other mainstream economic schools of thought, ecological economists point out that, “the issues of sustainable development, irreversibility of environmental change, intergenerational equity, and uncertainty of the long-term outcomes inform and guide ecological economics research, analysis and valuation” (Daly & Farley 2010, p.7).
Ecological economists question the “basic mainstream economic models like cost-benefit analysis, and the separation of economic values from scientific inquiry” (Daly, & Farley 2010, p.4). Here, ecological economists argue that economics as a study is inevitably normative and less empirical or positive. For this reason, ecological economists see strength in their positional analysis which seeks to integrate time and justice issues as the most productive and effective approach to economics.
Daly, a veritable ecological economist of repute who is, in fact, associated with the founding of this field argues that a major strength of ecological economics is its seeing of the natural and man made capital as fundamentally complements replaceable only over a truly insignificant margin (Daly 2008, p.88).
Seeing capital from this perspective will enable an economy to appreciate the fact that if they are complements then the one in short supply will be limiting and if they are substitutes then there is no limitation.
Daly (2008, p.88) elucidates that, the fact of limiting factor largely increases the force of scarcity. In short, ecological economics challenges the mainstream approach towards natural resources, contending that it underestimates natural capital by regarding it as substitutable with man made capital, that is, with labour and technology.
Difference with standard environmental/neoclassical economics
Essentially, economics refers to study of the allocation or distribution of scarce, or limited, natural, socio-economic and political resources among alternative, competing needs and interests (Daly, & Farley 2010, p.3). In fact, the major bone of contention between mainstream economists and ecological economists revolves around availability of natural resources, its scarcity and sustainability of an economy. Allocation is a process of distributing resources to the production of different goods and services.
On one hand, neoclassical economists regard the market as the suitable mechanism of allocation (Daly, & Farley 2010, p.3). Neoclassical economists contend that the market discloses the most desired ends and that the majority of scarce resources within an economy are fundamentally market goods.
As a result, they devote much of their attention to that mechanism for apportioning resources. Neoclassical economists argue that, the market is the appropriate mechanism for allocation because under some limiting assumptions, it is efficient (Daly, & Farley 2010, p.3). They consider efficiency to be value-free criteria of what is acceptable.
Efficient allocation in this case refers to a circumstance where “no other apportioning of resources can make at least one person better off without making another person worse off” (Daly, & Farley 2010, p.4). Daly & Farley (2010, p.4) point out that, efficiency is so critical to a neoclassical economist that it is sometimes considered an end itself.
However, it is pertinent to remember that if a person’s end is evil, efficiency will automatically make things worse. Therefore, efficiency can only be termed to as worthy if the end is truly magnanimous and orderly. After all, it is worthless to do a job well, a job that is not worthy.
On the other hand, ecological economics assumes a different approach to economics. For ecological economists, even though efficient allocation is necessary, it is not an end in itself. EE is differentiated from environmental economics, which is the conventional analysis of the environment by its tendency to see the economy as a subsystem of the wider ecosystem and emphasizing on the importance of preserving natural capital (Daly, & Farley 2010, p.4).
Even though environmental economics acknowledges that welfare depends largely on ecosystem services, which suffer from pollution, it is still, to a large extent, dedicated to efficiency (Daly, & Farley 2010, p.4). Additionally, since markets are non existent in ecosystem services or pollution, environmental economists apply a variety of techniques to assign market values to them in order to integrate them in to their market model.
In ecological economics, “natural capital is combined with the ordinary capital asset analysis of labour, financial capital and land” (Daly, & Farley 2010, p.4). Conventional economists are “optimistic with regard to technology; ecological economists are regarded technological pessimists” (Daly, & Farley 2010, p.5).
Ecological economists argue that the world is like a ship which has limited carrying capability and it is possible its resources can run out (Daly, & Farley 2010, p.5). For this reason, just like ship owners and crews must remain within the carrying capacity of their vessel in order to ensure that it does not sink, economic policy makers and governments should be mindful of the carrying capacity of their economy and the world by extension.
The world, just like to a vessel, is sailing in waters that can, at times, be turbulent and increasingly risky to sail. Thus, for purposes of ensuring a safe voyage for every passenger irrespective of his/her class within the vessel, the crew puts into place safety measures the main one being sticking within the weight limits of its vessel.
Ecological economists hold that destruction of critical environmental resources could be in reality irreversible and disastrous (Daly, & Farley 2010, p.5; Gurjar et al 2010, p.353). Therefore, they have a tendency to call for and justify cautionary measures premised on a precautionary attitude.
Conclusion
Economics is certainly one of the well established and the most dominant human or social sciences. Like other fully established disciplines, it has numerous approaches to its subject matter.
Despite its theoretical weaknesses, Ecological economics have emerged as an important approach to economics particularly at a time of increased resource and environmental concerns. Its strong emphasis on preservation of nature and consideration for imperatives of democracy makes it a viable alternative approach to economics for all economies.
Reference List
Daly, H., 2008. Ecological Economics and Sustainable Development, Selected Essays of Herman Daly. New York, NY: Edward Elgar Publishing.
Daly, H., & Farley, J., 2010. Ecological Economics: Principles and Applications. Washington, DC: Island Press.
Dovers, S., & Stern, D., 2003. New dimensions in ecological economics: integrated approaches to people and nature. New York, NY: Edward Elgar Publishing.
Gurjar, B. R., Molina, T., & Ojha, S. P., 2010. Air Pollution: Health and Environmental Impacts. New York, NY: CRC Press.
Hussen, A. M., 2004. Principles of environmental economics. New York, NY: Routledge.
So¨derbaum, P., 1998. Values, ideology and politics in ecological economics. Web.