Ecological Economics

Economics has been described as a ‘dismal science’, dismal because its driving force of self-interest often produces unjust results. The utilitarian view of the world, inherent in the very nature of economics, ensures that it will sit uncomfortably with ecological concepts in which interlinkages among populations remain the focus of analysis. Not surprisingly, therefore, one of the strongest critiques of the conventional wisdom of economic development has emerged from ecology-based environmentalism. A response to such criticism has been to merge the two disciplines in recent years and, instead of studying the differences, to look at the common ground for a methodological convergence. In a broad sweep, ecology and economics are now seen as two related parts of a whole. The interlinkages are obvious indeed; every economic activity has some effect on ecology, whereas every environmental change can have an impact on the economy. The higher the level of material culture, the greater is the ability of human beings to transform the resources of nature into products according to the value system of the society. The linkages are so explicit that one may wonder why until the last quarter of the 20th century economic thought completely ignored the limitations on economic functions set by ecology, giving rise to what is known as ‘unsustainable economies’.

The important challenge of the disciplinary merger facing ecology and economics has now shifted from the ideological realm to the practical world. Decision-makers are increasingly confronted with the pressure to put economic values on environmental intangibles such as wildlife and recreation experiences, or even on the aesthetic beauty of wilderness. These values have to be understood by them in monetary terms. At the same time, there is now a greater understanding that investing in natural capital is an essential prerequisite for sustainability. What decision-makers need now is more and detailed information about ecology-economics linkages so that they can reconcile the long-term goal of sustainability with near-term economic needs. They also need tools to measure and prognosticate; how much nature do we consume? What are the implications of more intensive resource use with rising standards of living of large populations of developing countries? Now that significant increases in the material wealth have been achieved, a fear has arisen about the ‘future’ in economic thought. The question is, will the future be treated any differently than the past or will it be viewed ‘from within the framework of the present’? The concern about ‘future’ in economic thought is growing directly out of the present degraded ecological situation and the present, unsatisfactory, ways of resource utilisation. A disjunction from the past will ensure that the future cannot be projected from the present situations, and new formulations will have to come into force. Decision-makers, therefore, will have to be equipped to be able to identify and choose preferred economic paths that are not destructive of ecological balance.