Cross-Disciplinary Analogies between Ecology and Economics

Topic Reference

Ecology Applied to Economics

Winter, 1964

Natural selection Niche

Diversity patterns Resource partitioning

Consumer behavior Cost-benefit analysis

The theory of the firm Input-output analysis

Hardesty, 1975; Lloyd et al., 1975; Mark et al., 1985

Golley, 1966

Kangas and Risser, 1979

Economics Applied to Ecology

Tullock, 1971; Covich, 1972, 1974

Roughgarden, 1975; Orians and Solbrig, 1977; Solbrig and Orians, 1977; Givnish et al., 1984; Riessen, 1992; Matsuda and Shimada, 1993

Bloom et al., 1985

Richey et al., 1978

Equilibrium concepts Tschirhart, 2000

Ecological economics goes beyond analogies in order to remake classical economics with emphasis on philosophy as much as on actual accounting techniques. The field emerged in the 1980s from several starting points. On the one hand there were a number of established economists who began discussing fundamental problems of their field around the time of the first Earth Day in 1970. These included E. F. Schumacher (1968, 1973) with his reference to Buddhist economics, N. Georgescu-Roegen (1971, 1977) with his reference to "the entropy law and the economic process," and K. E. Boulding (1966, 1972, 1973, 1978) who made many connections between ecology and economics. The most influential of these workers trained as classical economists has been Herman Daly (1968, 1973, 1977, 1996; Daly and Towsend, 1993), a student of Georgescu-Roegen, whose early contribution was the idea of an economy based on steady-state rather than growth. Daly is one of the founders of ecological economics, and he continues to add original ideas to the field.

On the other hand founders of ecological economics came from ecology-based training. H. T. Odum was a forerunner in this effort and his emergy analysis will be described in the next section. Perhaps the most influential person in ecological economics has been Robert Costanza, who was a student of H. T. Odum. Starting with the publication of his dissertation research (Costanza, 1980), Costanza has been at the center of developments in the field. For example, he has edited many conference proceedings (Costanza, 1991; Costanza and Daly, 1987; Costanza and O'Neill, 1996) and the new journal called Ecological Economics. He was the first president of the International Society of Ecological Economics and the lead author on the first text on the subject (Costanza et al., 1997a). The agenda Costanza outlined with coworkers (Costanza et al., 1991) continues to identify areas of work in ecological economics: (1) valuation of natural resources and natural capital, (2) ecological economic system accounting, (3) sustainability, (4) developing innovative instruments for environmental management, and (5) ecological modelling at all scales. Several of these areas are discussed in relation to ecological engineering below.

Life-Support Valuation of Ecosystem Services

One of the earliest quantitative measures in ecological economics was the calculation of the value of an ecosystem based on its contribution to the overall life-support system that the biosphere provides to humans. The concept states that ecosystems produce clean water and air through the biogeochemistry of their normal metabolism. These actions collectively constitute a life-support system for humans that is not valued by the economic system. However, it is expensive to reproduce by technological means, as is evidenced for example in the case of a physio-chemical lifesupport system for manned space flight (see the discussion of closed systems in Chapter 4). H. T. Odum (1971) first discussed and quantified the concept of lifesupport valuation by using the gross primary productivity (GPP) of the ecosystem and an energy-to-dollar ratio, which he estimated by dividing the total energy flow of the U.S. by the gross national product (GNP). This was fundamentally an ecological economics calculation because it combined ecology (through the use of GPP) and economics (through the use of an energy-to-dollar ratio) to quantify the value of an ecosystem. GPP is the appropriate measure to use for energy flow in the ecosystem because it integrates the metabolism (photosynthesis and respiration) of all biological populations within most systems. This calculation was a significant breakthrough that allowed for natural ecosystems to be evaluated with dollar values. H. T. Odum (1971) extended the concept by suggesting that humans have a constitutional right to a life-support system, as noted below:

Basic to many of the legal battles underway and developing in the defense of the environment is a long ignored constitutional freedom — the human right to a safe lifesupport system. There can be no more fundamental right to an individual than his opportunity to breathe, drink water, eat, and move about with safety. Long taken for granted, these rights are not free but are paid for daily by the metabolic works of the life-support system processing the wastes and by-products. The water and mineral cycles, the complex of complicated organisms that process varied chemicals, and the panorama of ecological subsystems that organize and manage the earth's surface are not the property of individuals, but are part of the essential basic right, the life-support system. A fundamental flaw in the legal systems allowed owners of land to assume special rights to the public life-support means.

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