Principles of Environmental Economics: Economics, Ecology and Public Policy

learning objectivesAfter reading this chapter you will be familiar with the following:

• ecological economics and its distinguishing features;

• the historical development of ecological economics;

• the argument for ecological limits to economic growth;

• energy as a limiting factor to economic growth;

• biophysical and moral/ethical arguments for why the neoclassical economic growth paradigm is untenable;

• the steady-state economy (SSE);

• the biophysical, economics and ethical dimensions of the SSE;

• the qualitative difference between economic growth and economic development;

• the SSE and its policy implications;

• the practical problems of operationalizing the SSE.

The environmental resource base upon which all economic activity ultimately depends includes ecological systems that produce a wide variety of services. This resource base is finite. Furthermore, imprudent use of the environmental resource base may irreversibly reduce the capacity for regenerating material production in the future. All of this implies that there are limits to the carrying capacity of the planet.

(Arrow et al. 1995)

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