Sustainability Home > Ecological Economics

Ecological Economics

The economy is one of the pillars of sustainability. It must function to prevent pollution by providing incentives that promote efficient resource use and eliminate waste. The economy must also support healthy ecosystems, the source of our natural resources. Preventing pollution and protecting ecosystems preserves Washington's environment, allowing Washington communities to develop sustainably.

Ecological economics applies the scientific principles of physics, ecology, economics, and sociology towards research, design, and development of policies and practices needed to implement a sustainable economy.

The basic goals of a sustainable economy are:

• An efficient allocation of resources
• A just distribution of wealth
• An ecologically sustainable scale¹

Comparing Conventional Economics and Ecological Economics

A major goal of current economic systems has been to maximize gross domestic product (GDP) or the total value of goods & services produced.

GDP does not accurately measure human welfare or the health of the planet, in part because it does not distinguish between "good" and "bad" production. For example, natural resource depletion including unsustainable timber harvesting, soil erosion, pollution, and petroleum use are costs, not benefits, to human society. Yet, goods & services associated with them are added to GDP.

Ecological economics differs fundamentally from classical (current) economics in its view of the world. Classical economics assumes that economic growth can continue indefinitely, that the planet is relatively “empty” (of people and human infrastructure), that resources are abundant, and therefore, that there is unlimited growth potential.

Ecological economics asserts that the world is relatively “full”, at or beyond ecological carrying capacity. According to ecological economists, there are natural constraints to further growth in the “full” world and exceeding these constraints results in uneconomic growth and negative consequences for the living Earth. Ecological economics provides some of the tools Ecology needs to quantify the carrying capacity of our state's natural resources.

Ecological economists examine diverse issues:

• Ecosystem functions, service capacity, and allocation
• Income & wealth distribution, maximum & minimum income, tax incentive policy
• Economic scale (size of economy) relative to the ecosystem
• Common, public, and private property rights
• Economic welfare and genuine progress indicators (GPI)
• Quality of life as individual and community well-being

For further information:

Gund Institute for Ecological Economics

Australia New Zealand Society for Ecological Economics

The International Society for Ecological Economics

¹ Scale is defined as the physical size of the economy relative to the containing and sustaining ecosystems.