The proposal of the Ecological Economy

Currently, we live in a society reigned by the market system, in which bases lie many of the causes of the socio-environmental crisis we are going through. Human beings appropriate, produce, circulate, transform, consume and get rid of products, materials, and energy that come from the natural world. The way in which this process takes place, known as social metabolism, is determined by the way in which we organize as a society, which also establishes the way in which we transform nature.

The in effect socio-economic system, based on the neoclassical economy, considers the economic circuit as a continuous system, closed and isolated from the environment, which can create growth without limitations and without taking into account this transformation of the natural world that it provokes. Nevertheless, the current environmental degradation and contamination put in check the fundamentals of this system.

Immersed in this context, by the end of the 1980´s decade, The Ecological Economy surges as a critic of the conventional economy. This new discipline studies the environmental problematics from a systemic vision and describes the economic activity as an open subsystem inside the ecologic system. Understands that this is not an activity that only makes use of the natural resources in an isolated way, but it is centered in the utilization of the ecosystems, their goods, and services.

From this perspective, the economy is a system in which a flow of energy and materials that depend on the environment and at the same time produces wastes that return to this, is provided; so it is limited by the capability that the biosphere has to hold the anthropic activities, as it simultaneously ensures planetary integrity and health.

Which are the key aspects of the Ecological Economy?

  • Transdisciplinarity:

Since its origins, the ecological economy raises the necessity of the disciplinary articulation to achieve a holistic outlook that allows to address and study the relationship between the economy and the environment. The specialization and parcellation of knowledge, a predominant tendency on modern science, results limiting in this sense. Economic aspects must be taken into consideration as well as environmental and social, putting the focus on the sustainability of the global ecosystem, the inter-and intra-generational distributive equity, the ethic, the cultural process, and the economic growth itself.

  • Dialogue with other forms of knowledge:

At the same time, the importance of incorporating in the decision-making process the cultural forms of knowledge that come from non-institutionalized communities in the academic world, such as ancestral communities, is also recognized. In the last years, these forms of knowledge have been recognized and studied as a source of knowledge that helps to comprehend the socio-ecological systems, and that provide alternatives and solutions to answer the changes that appear in these environments.

  • Biophysical limits to economic growth substantiated on thermodynamics' laws:

From this system approach of the economy and based on the laws of thermodynamics, this discipline establishes two fundamental notions:

  1. The impossibility of extracting from ecosystems more than what can be considered as their sustainable or renewable yield.

  2. The impossibility of generating more wastes than what can be tolerated by the assimilatory capability of the ecosystems.

  • The precautionary principle:

This principle raises the need to act with caution in the absence of knowledge or scientific certainty regarding the existence of a danger of serious and/or irreversible damage to public health or the environment. It must be recognized the inherent complexity of the socioecological systems and our limited knowledge about them. And consequently, inside this context of uncertainty, reflect on and discuss the possible consequences that different development projects could cause.

What does the Ecological Economy propose?

  • A politized economy, in which decisions about the biophysical limits of the economical activity are based on scientific-political debates of a democratic nature.

  • Limit the use of renewable resources in a rhythm that doesn’t exceed its renewal rate. Similarly, the use of non-renewable resources at a rate no greater than the rate at which they are replaced by natural resources.

  • Limit waste generation only to an amount that the ecosystem is able to assimilate or recycle.

  • The development and incorporation of biophysical indexes to measure ecological sustainability, instead of the current economic indicators. The techniques of monetary valorization of the environmental goods and services aren´t enough, because many times these are incommensurable, such as the case of health or life itself. In the face of this, one of the tools proposed by the Ecological Economy is the Multicriteria Evaluation, that consists on the evaluation of a series of criteriums beyond the strictly economic.

Finally, and to end with the reflective process about the contributions of the Ecological Economy to think our present, we share with you the invitation to the Series of Conversations Club de Roma, which will start next September 23. We will address in our first encounter, together with Doctor Óscar Carpintero, the importance of ecological economics to rethink the development model, within the framework of the ecosystemic crisis and the approaching of a new Conference of the Parties (COP 26) on Climate Change.