The Role of Ecological Economics in Providing a New Outlook on Achieving Sustainable

Development

By: Arunan Sivalingam

ID: 309422
 In recent decades, protection of the environment has been prioritized higher and higher

in international, regional and municipal agendas. The advent of the term sustainable

development in the Brundtland report (1987) has created increasing calls for societies,

companies and governments to incorporate protection of the environment into their economic

planning. This has become more relevant as modern society comes to face the dilemma in

reconciling traditional economic worldviews and current environmental phenomenon. It has

been argued; current assumptions used by economists and modern market based societies in

delineating the idea of infinite growth has been a major factor in stimulating the current

ecological crisis. Such observations have led to the re-examination of the fundamental

subsets under which modern society functions in relation to the physical environment. New

outlooks have begun to emerge, which challenge the grounded notion that economic growth

has freed ‘developed societies’ from their dependence on the environment.

Consensus is building across disciplines, that it is the environment which is the

essential input, rather then a mere substitute in industrial production; as defined in Neo-

classical economic theory (Krishnan 1995, 10). It is for this reason many are looking for

ways in which to reconcile traditionally held assumptions and methodologies in

environmental cost-benefit analysis. This has created the need to move toward a more holistic

approach in utilizing demonstrated capacities from broad disciplines and various conceptual

outlooks.

Ecological economics has revealed its ability to utilize various knowledge capacities,

worldviews and observations by cross-cutting various disciplines. This has enabled a more

holistic and grounded approach to sustainable development. It is only through such openness,

that sustainable development can be achieved, as the reluctance to take into account local

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community knowledge, metaphysics and environmental phenomenon has proven the

drawback of the traditional economic approach.

Conceptualizations are changing in the way the environment, in its multi-varied

nature, functions in relation to society. It is coming to be seen more as the critical factor in

examining societal outlooks, rather then simply a mere part. The increased attention and

debate that sustainable development is and will take up in public discourse, makes it very

relevant to examine the contribution of various disciplines and value systems. Debate is

currently unfolding challenging the traditional subsets of neo-classical economic theory,

which has devalued the environment as just another resource to be utilized for production

(Nadeau 2003, 58). Although there is still ambiguity in some circles about the so called

‘science’ of climate change, it can be accurately assumed that consensus has been reached on

the impending effects of climate change, as outlined by the Intergovernmental Panal on

Climate Change and others.

The primary criticisms levelled against fundamental neo-classical economic theory are

in responding to the issue of the public commons. Neo-Classical theory translated in practice

has stipulated the idea of infinite growth, without understanding the reality of finite resources

(Schumacher, 1973). The contemporary beginning of the belief in the idea of such a model

can be traced back to the opening session of the Bretton Woods meeting in 1947. Chaired by

then U.S. Secretary of the treasury Henry Morgenthau, whose opening remarks envisioned the

planet where “...peoples of every nation [would] be able to realize their potentialities and

enjoy the fruits of material progress on an earth infinitely blessed with natural riches.”

Morgenthau called on all participants to embrace the notion that “...prosperity [had] no limits”

(Nadeau 2003, 78). These remarks provide a context around the idea postulated by

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economics: that the market system exists in a closed sphere, benevolently working to

determine the efficient allocation of goods, independent from all else. Yet it is this focus of

economics on the whole and not on the individual micro-mechanisms that affect long-term

changes within society that have exposed the limitations within economic models (Nadeau

2003, 52). As what is clearly viable in preserving the ecosphere and society in the long-run is

perceived to be uneconomic (Schumacher 1973, 106).

Finally the last major flaw pointed out in neo-classical economic theory is the idea that

“growth” in itself as being the primary requisite in dealing with sustainability and issues of

the environment. The argument is that if the poor in the developing world can share in the

benefits of material growth, they can focus on the issues of the environment. Yet current data

from the United Nations Conference on Trade and Development tells otherwise. The number

of people living on less than $1/per day is projected to rise from the current figure of 307

million to 420 million by 2015. This does not include global dynamics such as rising food

prices, which could reverse decades of progress in decreasing malnutrition and hunger.

Furthermore, observable evidence has demonstrated that higher levels in real income growth

have not demonstrated a higher propensity to deal with such issues, as demonstrated in OECD

countries, or newly industrializing countries (NIC’s) such as China (Rajaram 1995, 7). One

of the key examples to demonstrate the drawback in economic models to provide viable

solutions to ensure long-term sustainability is in schemes such as carbon trading. Carbon

trading has been a mechanism which policy makers have embraced as a tool to allow for

society to “have its cake and eat it too.” Yet upon closer analysis, various issues present

themselves in utilizing a market based approach to dealing with a public common. The basic

idea behind a carbon trading market is to offset ones’ detrimental environmental impact, by

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investing in projects that make up for such Carbon emitting projects (Smith, 2007).

Interestingly enough, the idea was taken from a practice of selling good deeds to ‘sinners’ by

the Catholic Church in the Middle Ages (Smith 2007, 6). This same premise underlies the

Carbon market: find carbon projects that offset projects that emit pollution into the

atmosphere. Such a methodology demonstrates the current inability for institutional

mechanisms to grasp the idea of global climate change. A response guided on the very

principal that creates the problem in the first place is quite illogical, to say the least.

Mechanisms which still allow for the same amount of carbon to be released into the

environment seem to reveal the inability to understand the issue at hand. The failure of such

approaches to address the underlying issue, which is to change societal practices and outlooks

on the issue of climate change, has brought the functionality of such markets into question.

Due to the inability of economic indices to value the “commons,” many questions have been

raised about regulation: how is one to measure airspace in monetary terms? A report by

Standard Life Investments on ‘Carbon Management & Carbon Neutrality in the FTSE All-

Share’ tellingly warned that such schemes “Have the capacity to disguise the failure to

achieve actual reductions in overall greenhouse gas emissions” (Smith 2007, 7). Such an

example reveals the inability for market mechanisms to fully deal with the issue of

sustainability in a holistic sense; market models demonstrate comparative advantages only in

financially measurable terms. It is important to look at measurement beyond economic terms,

in order to address the more complex issues brought forth in dealing with the complicated

issue of achieving “sustainable development.”

The Brundtland report recognized that in order for larger society to move forward in

trying to achieve sustainability, society would need to learn from groups that had knowledge

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to share based on their own ways of life, as mentioned in the report, “...a great deal could be

learned from [indigenous peoples] traditional skills in sustainabley managing very complex

ecological systems” (World Commission on Environment and Development 1987, 115). Such

statements reveal the greater attention being paid to the area defined as the “traditional

ecological knowledge” (TEK) of Indigenous peoples. Although there are many difficulties in

the term, I would like to use the definition as put forth by Usher (2000), which states: “...TEK

refers specifically to all types of knowledge about the environment derived from experience

and traditions of a particular group of people” (185).

Traditional Ecological Knowledge has been more sought out in recent decades by

practitioners in western science, due to the gaps that exist within set scientific methodologies.

Researchers have found that local people possess a vast knowledge base, due to their long-

standing interaction and residency in specific localities (Boelscher, Ignace & Turner 2000,

1275). Western linear models based on cause and effect relationships have revealed their

drawbacks in understanding small-scale phenomenon. An example can be seen in scientific

research undertaken of Peary Caribou in the high Artic. Local Inuit in the area understood the

social and environmental structures in place, which allowed for long-term viability of the

herds. Whereas scientists believed, selective hunting of males and prohibition of hunting

females would be the best long-term solution. Yet this was in direct conflict with what local

Inuit had gathered over a long period of time; further monitoring proved the validity of local

Inuit knowledge (Freeman, 1992). Various similar examples abound, that demonstrate the

understanding that such communities posses; understandings which are based on differing

philosophical systems for ordering reality apart from traditional western science (Lertzman

2003, 284). This accumulated knowledge base that exists in communities has been the

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primary aspect in which “industrialized society” has seemed to show keen interest in

understanding. Yet such an objective may be seen to reinforce historical objectives of

colonization and cultural appropriation. It is for this reason that relationships of respect and

genuine regard for working with local peoples must be demonstrated. Furthermore, it is

important to understand the value systems, philosophical foundations and worldviews

embedded in such “ecological knowledge”. As these are the underlying values and outlooks

that industrial society needs to examine if it wishes to achieve sustainability. The notion of

respect for nature and ecological value systems are what allow for the “sustainability”

observed in such communities (Boelscher, Ignace & Turner 2000, 1278). It is only through

such acknowledgment of the holistic nature of such a worldview, can modern societies utilize

the knowledge of such perspectives in pursuing a more sustainable society. This cultural

understanding is crucial in a time where individuals, academics, scientists and society at large

are looking for answers to the ecological crisis. The “traditional ecological approach”

provides answers, not only in terms of detailed observations of particular localities and

environments, but also in terms of holistic philosophies and holistic understanding of

ecosystems (Boelscher, Ignace & Turner 2000, 1285). This type of demonstrated broad scale

understanding is what has shown to be lacking in current economic models, which only

analyze the environment, and specific relationships based on quantified measurable indices.

Such analysis has failed to take into account human relationships with natural resources, and

the nature of such resources in meeting human needs. Such failures have revealed the need

for current economic models to re-evaluate how specific systems, namely the environment

interact under human classifications.

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 Ecological economics has been emerging as a new sub-discipline in the field of

economics. It has opened itself to examining the earlier economic assumptions, that some

argue, has been a contributor in the facilitation of modern society’s dilemma with the

environment. Ecological economics has taken into account the value systems based outside

of the “western norm”. These systems have developed mechanisms that have proved to

reveal a demonstrated ability to manage issues of sustainability in various facets of the

environment, including the human environment and community sustenance. It is therefore

important that these various insights and demonstrated methodologies work together.

Ecological economics has utilized the importance of such observations and documented

research in the environmental sciences, for example, to delineate more holistic measures when

analyzing the physical environment (Krishnan, 1995). Ecological economists have positioned

natural systems to be primary, with social and economic systems as respondent to this reality,

rather then the other way around (Krishnan 1995, 53). Such re-examinations of excepted

orthodox economic viewpoints reveal the strength of the cross cutting nature in looking at

issues of the environment. Major criticism has been levelled against traditional neo-classical

theory in not adequately measururing the net value of losses accrued to ecosystems (Nadeau

2003, 42). Yet by utilizing physical assessments carried out by ecologists and others, more

comprehensive cost-benefit analyses have been carried out.

Land conversion traditionally has been measured in strict monetary terms, yet by

understanding the complex environmental features that exist within a specific area, reveal the

hidden ecological and social costs which have been overlooked for private benefit (Hackett

2005). Incorporating such analysis into broader based cost-benefit analysis has helped to

reveal the true costs in the utilization of environmental goods. Ironically such analysis have

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helped to cast light on the tremendous monetary costs that ecosystem negligence will have on

societies and economies, thus demonstrating the capacity of such integrated analysis in

addressing the global climate crisis. In addition, ecological economists utilizing of

perspectives outside of the traditional economic norm have helped demonstrate new

convergences in technical sciences, and local values. Such examples include when

economists began analyzing the idea of equable per capita resource use for animals and

humans. The idea was only looked at after understanding Indigenous ideas of environmental

equity. Ecological economists then began to analyze the idea of “uniform standard of living”

in animals, and now new insights are being drawn in looking at human beings as actors in the

environmental cycle (Krishnan 1995, 56). This type of inquiry would never be undertaken in

traditional economics; as such external variables have no place under the classical model.

The utilizing of such external models has helped provide a more holistic understanding for

modern societies, and the planet as a whole in examining the interaction of economies and the

environment (Krishnan 1995, 52).

It is important for modern society to analyze the current assumptions and frameworks

in which industrial society has come to operate. Inquiry into the areas of metaphysics,

economics and human relationships with the natural environment are thoroughly being

examined, as more attention is paid to human interactions with the environment. Individuals

are realizing that current operational methods are contributing to a destructive and

unsustainable way of life for the planet. It is for this reason many have called on developing

new outlooks, and even shifts in current paradigms of interrelations between societies,

economies and the environment. It is important to understand that the broad issues brought

forth through the environmental crisis have been looked at and examined throughout human

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history. All societies have developed understandings of how humans and natural

environments must interact in order to ensure viability of local communities, which for the

most part cannot be achieved in separation from the natural environment (Nadeau 2003, 67).

The inability of modern society to see the fundamental relationship between human beings

and the environment has been levelled as the prime factor in furthering ‘our’ ecological crisis.

It is therefore crucial, that as a common species to move forward, it cannot be with ideologies

alone. Rather it is only through examining other worldviews, understanding local community

knowledge, and examining cross-disciplinary ideas and insights can sustainability be moved

forward. In particular, it is important for society to understand the knowledge possessed by

local indigenous communities, who by the very residency in specific localities for extended

periods of time have developed deep rooted understanding of local contexts (Houde, 2007).

Ecological economics has provided an outlet where the drawbacks of traditional neo-classical

theory have been re-examined, to incorporate various perspectives utilizing ecological

knowledge, metaphysics and scientific understanding. Only through such partnership can

sustainability be achieved, as various actors provide the more holistic basis for how societies

are connected and need to see themselves in the wider context of the planet. This has proven

to demonstrate a much higher ability to address environmental issues then traditional

economics, whose proven advantages do not lie in examining the allocation of natural

resources, other then in a “productive” and monetary capacity (Hackett 2005). Such

drawbacks can only be negated by incorporating various perspectives, in particular, that of

indigenous communities, whose methodologies have shown a comparative advantage in

addressing the question of “sustainable development.”

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 REFERENCES

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Reprinted from Northern Perspectives, 20(1) Summer 1992: 9-12 in Gaffield and
Gaffield, Consuming Canada, Toronto: Copp Clark, 1995.

Hackett, S. (2005). “Environmental and Natural Resources Economics.” New York: M.E.
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Herman, D. (2003). “Ecological Economics: Principles and Applications.” USA: Island

Press.

Houde, N. (2007). “The Six Faces of Traditional Ecological Knowledge: Challenges and
Opportunities for Canadian Co-Management Arrangements.” Ecology & Society, 12, 1-17.
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Krishnan, R. (1995). “Survey of Ecological Economics.” USA: Island Press.

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Smith, K. (2007). “The Limits of Free-Market Logic.” China Dialogue

Turner, Nancy J. and Ignace, Marianne Boelscher and Ignace. Ronald

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