Ecological Economics: An Introduction

by Michael Common , Sigrid Stagl

• ISBN13: 9780521016704
• ISBN10: 0521016703
• Format: Paperback
• Copyright: 2005-11-07
• Publisher: Cambridge University Press

Summary

Taking as its starting point the interdependence of the economy and the natural environment, this book provides a comprehensive introduction to the emerging field of ecological economics. The authors, who have written extensively on the economics of sustainability, build on insights from both mainstream economics and ecological sciences. Part I explores the interdependence of the modern economy and its environment, while Part II focuses mainly on the economy and on economics. Part III looks at how national governments set policy targets and the instruments used to pursue those targets. Part IV examines international trade and institutions, and two major global threats to sustainability - climate change and biodiversity loss. Assuming no prior knowledge of economics, this textbook is well suited for use on interdisciplinary environmental science and management courses. It has extensive student-friendly features including discussion questions and exercises, keyword highlighting, real-world illustrations, further reading and website addresses.

Table of Contents

List of figures	xx
List of tables	xxiii
List of boxes	xxv
Preface	xxvii
Introduction	xxix
An introduction to ecological economics	1	(18)
What is ecological economics?	1	(2)
A brief history of the environment in economics	3	(3)
Science and ethics	6	(2)
Sustainability and sustainable development	8	(1)
The relationship between ecological and neoclassical economics	9	(4)
A guided tour	13	(6)
Keywords	15	(1)
Further Reading	16	(1)
Websites	17	(1)
Discussion Questions	17	(2)
PART I INTERDEPENDENT SYSTEMS	19	(104)
The environment	21	(45)
Planet earth	22	(4)
Systems	22	(1)
The lithosphere	23	(1)
The hydrosphere	24	(1)
The atmosphere	25	(1)
The biosphere	25	(1)
Thermodynamics	26	(11)
Energy, heat and work	26	(1)
First law of thermodynamics	26	(3)
Thermodynamic systems classification	29	(1)
Second law of thermodynamics	30	(2)
Plants as open systems	32	(2)
Animals as open systems	34	(3)
Ecosystems	37	(19)
Energy and nutrient flows	37	(6)
Population dynamics	43	(7)
System dynamics	50	(6)
Nutrient cycles	56	(3)
The carbon cycle	56	(3)
Evolution	59	(7)
Biological evolution	59	(2)
Coevolution	61	(1)
Summary	62	(1)
Keywords	62	(1)
Appendix: Doubling times with exponential growth	63	(1)
Further Reading	64	(1)
Websites	65	(1)
Exercises	65	(1)
Humans in the environment - some history	66	(20)
Human evolution	66	(2)
Cultural evolution	67	(1)
The history of human numbers	68	(1)
Hunter-gatherers	69	(3)
The transition to agriculture	72	(2)
The second transition	74	(4)
Energy slaves	76	(1)
Human numbers in the industrial phase of human history	77	(1)
Energy and agriculture	78	(4)
The extent of the human impact on the biosphere	82	(4)
Summary	83	(1)
Keywords	84	(1)
Further Reading	84	(1)
Discussion Questions	85	(1)
The economy in the environment - a conceptual framework	86	(37)
The big picture	86	(2)
Stocks and flows	88	(2)
The economy	90	(4)
Consumption	90	(1)
Production	90	(1)
Investment	91	(1)
The productivity of capital accumulation	92	(1)
Open and closed economies	93	(1)
Resource extraction	94	(4)
Flow resources	94	(1)
Stock resources	95	(3)
Waste insertion	98	(4)
Stocks and flows	98	(2)
Damage relationships	100	(2)
Implications of the laws of thermodynamics	102	(3)
Conservation of mass	102	(1)
Entropy	103	(1)
Energy flow as an approximate measure of environmental impact	104	(1)
Recycling	105	(2)
Amenity services	107	(3)
Sustainable amenity service consumption	108	(1)
Ex situ consumption of amenity services	109	(1)
Life support services	110	(1)
Interactions	111	(3)
A river estuary	111	(1)
Resource quality, energy use and waste generation	112	(1)
The enhanced greenhouse effect	113	(1)
Threats to sustainability	114	(9)
Resource depletion	114	(1)
Waste accumulation	115	(1)
Loss of resilience	115	(1)
Responses	116	(1)
The global perspective	117	(1)
Summary	118	(1)
Keywords	118	(1)
Further Reading	119	(1)
Discussion Questions	120	(1)
Exercises	120	(3)
PART II ECONOMIC ACTIVITY	123	(236)
Economic accounting	125	(42)
Input-output accounting	125	(11)
The basic accounts	125	(3)
Input-output analysis	128	(1)
Accounting for direct and indirect requirements	129	(1)
Input-output accounting and the environment	130	(2)
Input-output structures in history	132	(4)
National income accounting conventions	136	(8)
The basic ideas	136	(2)
Gross and net national product	138	(1)
Investment is necessarily equal to saving	139	(1)
Accounting for government	140	(2)
Foreign trade: national and domestic national income	142	(1)
National income accounting in practice	143	(1)
National income as the measure of economic performance	144	(10)
Income or consumption?	145	(1)
Gross or net income?	145	(2)
Adjustment for population size and growth	147	(1)
What national income does not include	147	(1)
Defensive expenditure	148	(1)
The problem of differing relative prices	148	(6)
National income accounting and the environment	154	(13)
Natural resource balance sheets	155	(1)
Satellite accounting	156	(2)
Summary	158	(1)
Keywords	159	(1)
Appendix: Input--output algebra	160	(3)
Further Reading	163	(1)
Websites	164	(1)
Discussion Questions	165	(1)
Exercises	165	(2)
Economic growth and human well-being	167	(43)
The rich and the poor	167	(4)
International comparisons of per capita national income	167	(2)
Many poor, few rich	169	(1)
Poverty in the world economy	169	(2)
Why are some countries rich and some poor?	171	(2)
What drives economic growth?	173	(16)
The basic growth model	173	(9)
The basic model and the data	182	(2)
Efficiency	184	(1)
Technological change	185	(1)
Endogenous technological progress	186	(2)
Explaining economic growth	188	(1)
The desirability of economic growth	189	(5)
Economists and dentists	190	(1)
Poverty alleviation	191	(2)
Growth and inequality	193	(1)
Ecological economics on the desirability of economic growth	194	(1)
Non-economic indicators of well-being	194	(6)
International comparisons	195	(1)
Are things getting better?	195	(1)
Relationships between GDP per capita and well-being indicators	196	(2)
GDP per capita and happiness	198	(2)
Human needs and desires - what makes people happy?	200	(10)
Measuring and explaining happiness	200	(3)
Relationships between income and happiness	203	(2)
Does inequality matter?	205	(1)
Summary	205	(1)
Keywords	206	(1)
Further Reading	206	(2)
Discussion Questions	208	(1)
Exercises	208	(2)
Economic growth and the environment	210	(51)
The IPAT identity	210	(8)
Scenarios for the near future	212	(4)
The commodity composition of GDP - `consumption technology'	216	(2)
Modelling growth and the environment	218	(18)
On substitution possibilities	219	(2)
Renewable resources	221	(7)
Non-renewable resources	228	(6)
Summary and overview	234	(2)
Limits to Growth?	236	(11)
Growth and the environment in history	236	(1)
The limits to growth	237	(7)
Reactions to The limits to growth	244	(2)
Beyond the limits	246	(1)
Growth as the solution to environmental problems?	247	(7)
The EKC hypothesis	247	(1)
The empirical status of the hypothesis	248	(2)
EKC implications	250	(4)
Sustainable development?	254	(7)
Summary	257	(1)
Keywords	257	(1)
Further Reading	257	(2)
Websites	259	(1)
Discussion questions	259	(1)
Exercises	259	(2)
Exchange and markets	261	(47)
Exchange and specialisation	261	(7)
Exchange	261	(1)
Specialisation in production	262	(4)
Money and prices	266	(2)
How markets work	268	(14)
Demand and supply functions	268	(6)
Non-price influences on demand and supply	274	(1)
Elasticities	275	(7)
Applications of market analysis	282	(7)
Price ceilings	282	(1)
Price floors	283	(3)
Commodity taxation	286	(3)
Lending and borrowing, saving and investing	289	(19)
Compounding and discounting	289	(1)
Saving and lending	290	(2)
Investing and borrowing	292	(7)
Savings, investment and the interest rate	299	(5)
Summary	304	(1)
Keywords	304	(2)
Further Reading	306	(1)
Discussion Questions	306	(1)
Exercises	306	(2)
Limits to markets	308	(51)
Markets and efficiency	308	(12)
The invisible hand - allocative efficiency	309	(1)
What is allocative efficiency?	310	(1)
How markets could achieve allocative efficiency	311	(5)
Intertemporal efficiency	316	(4)
Market failure and its correction	320	(12)
The conditions needed for markets to produce allocative efficiency	320	(2)
Market failure is the norm	322	(2)
Consumer sovereignty	324	(1)
Correcting market failure	325	(6)
Multiple sources of market failure	331	(1)
Markets and equity	332	(5)
Intratemporal equity	333	(3)
Intertemporal efficiency and distribution	336	(1)
Markets and the environment	337	(13)
Property rights	337	(2)
Natural resources	339	(10)
Waste flows and sinks	349	(1)
Amenity and life support services	349	(1)
Markets and sustainability	350	(9)
Non-renewable resource depletion and sustainability	350	(2)
The efficient level of waste emissions	352	(2)
Summary	354	(1)
Keywords	354	(2)
Further Reading	356	(1)
Discussion Questions	357	(1)
Websites	357	(1)
Exercises	357	(2)
PART III GOVERNANCE	359	(84)
Determining policy objectives	361	(41)
The history of the sustainable development principle	362	(10)
The early days of sustainable development	362	(1)
The `Brundtland Report' -- our common future	362	(2)
The United Nations Conference on Environment and Development (UNCED)	364	(5)
The World Summit on Sustainable Development (WSSD)	369	(3)
Operationalising the principle	372	(7)
What is the principle meant to deliver?	372	(2)
Sustainability in neoclassical economics	374	(2)
Sustainability in ecology	376	(1)
Sustainability in ecological economics	377	(2)
Decision making under imperfect knowledge	379	(10)
Project appraisal with imperfect information	380	(5)
Imperfect information and the environment	385	(4)
The Precautionary Principle and safe minimum standards	389	(6)
The Precautionary Principle	389	(3)
Safe minimum standards	392	(2)
The Precautionary Principle in the EU	394	(1)
The Precautionary Principle in the US	394	(1)
Science and precaution	395	(1)
From policy principles to policy objectives	396	(6)
Summary	397	(1)
Keywords	397	(1)
Further Reading	398	(1)
Websites	399	(1)
Discussion Questions	400	(1)
Exercises	400	(2)
Environmental policy instruments	402	(41)
Choice of environmental policy instruments	403	(3)
Moral suasion	406	(4)
Changing preferences	407	(1)
Varieties of preferences	407	(2)
Innovations in measuring and reporting economic and environmental performance	409	(1)
Command-and-control instruments	410	(3)
Non-transferable emissions licences	411	(1)
Minimum technology requirements	412	(1)
Regulation of location of polluting activities	412	(1)
Creation of property rights	413	(2)
Taxation	415	(10)
Taxation for allocative efficiency	415	(2)
Taxation for an arbitrary standard	417	(1)
Taxation and the goods market	418	(4)
Environmental taxes raise revenue	422	(3)
Tradable permits	425	(2)
The least cost theorem	427	(4)
Environmental performance bonds	431	(3)
Interdependence of policy goals	434	(9)
Summary	434	(1)
Keywords	435	(1)
Further Reading	436	(1)
Websites	437	(1)
Discussion Questions	437	(1)
Exercises	438	(1)
Appendix Input-output analysis of carbon taxation	438	(5)
PART IV THE INTERNATIONAL DIMENSION	443	(97)
A world of nation states	445	(37)
The case for international trade	445	(7)
The principle of comparative advantage	445	(2)
Domestic winners and losers	447	(2)
Some qualifications to the principle of comparative adavantage	449	(2)
Trade and the environment - a first look	451	(1)
Patterns of international trade	452	(2)
International trade and sustainable development	454	(10)
Positive consequences of international trade	455	(5)
Negative consequences of international trade	460	(4)
Institutions regulating international trade	464	(4)
Trade measures - WTO rules	464	(3)
Multilateral Environmental Agreements	467	(1)
Towards trade rules for sustainability	468	(3)
Globalisation	471	(11)
Role of transnational and multinational corporations	472	(4)
Summary	476	(1)
Keywords	476	(2)
Further Reading	478	(1)
Websites	479	(1)
Discussion Questions	480	(1)
Exercises	480	(2)
Climate change	482	(39)
The nature and extent of the problem	482	(16)
The greenhouse effect	483	(1)
The enhanced greenhouse effect	484	(1)
The Intergovernmental Panel on Climate Change	485	(1)
The greenhouse gases	486	(7)
The enhanced greenhouse effect - impacts of climate change	493	(2)
Responding to the enhanced greenhouse effect	495	(3)
Why the problem is difficult	498	(8)
A global public bad	498	(1)
Equity issues	499	(5)
Complexity and ignorance	504	(2)
Energy use and supply	506	(1)
Mitigation targets and instruments	506	(4)
Setting a global target	506	(2)
Instrument regimes	508	(1)
National sovereignty and mitigation	509	(1)
What is being done about the problem?	510	(11)
The United Nations Framework Convention on Climate Change	510	(1)
The Kyoto Protocol	511	(3)
What would Kyoto's impact be?	514	(2)
Assessment	516	(1)
Summary	517	(1)
Keywords	517	(1)
Further Reading	518	(1)
Websites	519	(1)
Discussion Questions	519	(1)
Exercises	519	(2)
Biodiversity loss	521	(19)
The biodiversity-loss problem	521	(6)
What is biodiversity?	521	(2)
How fast is biodiversity being lost?	523	(2)
Why is it being lost so fast?	525	(1)
Why does biodiversity loss matter?	526	(1)
Why it is a difficult problem	527	(2)
Publicness	527	(1)
Equity	528	(1)
Uncertainty	529	(1)
Conservation policy	529	(5)
Ex situ versus in situ conservation	529	(1)
Which species to preserve?	530	(2)
Habitat preservation and protected areas	532	(2)
The Convention on Biological Diversity	534	(6)
Objectives and principles	534	(1)
Instruments	535	(2)
Assessment	537	(1)
Summary	537	(1)
Keywords	537	(1)
Further Reading	538	(1)
Websites	539	(1)
Discussion Questions	539	(1)
References	540	(12)
Index	552