Ecological Economics

Ecological Economics: A Short Description
Richard B. Norgaard
University of California, Berkeley


Economists, ecologists, and scholars from a variety of other disciplines have organized an intellectual community known as “ecological economics.” The International Society for Ecological Economics (ISEE) was established in 1989 in response to a concern that the dominant ways of economic thinking have fostered particular forms of global change with detrimental social and environmental impacts. The constitution of the Society states:

The purpose of the Society is the advancement of our understanding of the relationships among ecological, social, and economic systems and the application of this understanding to the mutual well-being of nature and people, especially that of the most vulnerable including future generations.

Note that ecological economists broadly stress the interaction of multiple systems and the “mutual well-being of nature and people.” The concern is also focused on the “most vulnerable,” whether people or other species.

Expanding on this general statement, ecological economists share three general concerns that are neither adequately recognized in dominant academic and professional economic circles nor appropriately considered in political economic discourse. These include:

  1. That economies must be understood as operating within the larger biogeochemical earth systems that receive energy from the sun.
  2. That environmental sustainability depends on viable social systems.
  3. That progress toward the mutual well-being of nature and people is being thwarted by excessive material consumption on the one hand and excessive material inequality on the other.

Ecological economists are methodologically eclectic, using ecological reasoning and both dominant and alternative economics in their search for a better understanding of the interrelations between people and their environment, for indicators of sustainability, and for ways of bringing individual human behavior into conformity with collective human goals. While the concern with excessive consumption and equity clearly makes ecological economics an alternative community for economists and ecologists in rich countries, these same concerns make ecological economics a very comfortable community for scholars addressing sustainable development in poor countries.

Definitional Statements
Many have tried to define ecological economics, few have reached the same explication.1 This difficulty, of some concern both within and beyond the field, arises for at least four reasons.

  1. Many researchers who self-identify as ecological economists use the models and methods of more conventional environmental economists. This has led some environmental economists to argue that there is nothing new in ecological economics. The difference, however, is clear. Ecological economists as a whole also use other models and methods and actively discuss the strengths and weaknesses of environmental economic models in the contexts of the others.
  2. Since its modern beginnings, ecological economists have been searching for effective ways to understand and convey the importance of justice in the context of environmental sustainability and human dignity.
  3. Ecological economists have been grappling with how environmental problems require both new ways of understanding science and new ways of joining knowledge distributed among scientists, practitioners, and lay people to effect collective action. For example, the Constitution of ISEE specifically mentions the need to work with religious and other communities.
  4. Stemming from the first three, there is also mild disagreement over two issues in particular:

    a. Should ecological economics strive for a new paradigm (e.g., a new set of integrative models, systems assumptions, and empirical methods)?


    b. Should, or must, ecological economics remain a large umbrella under which economists, ecologists, and others scholars compare and contrast different models and learn together?

Working Assumptions
While the scope and direction of ecological economics are actively discussed, there is considerable agreement among ecological economists with respect to their working assumptions. Each research community focuses on a portion of reality and makes assumptions about larger systems or takes a very broad view and makes assumptions about the details. No discipline understands the whole of reality, so assumptions about the relations between the parts studied and the whole are a necessity. Economist Karl Schumpeter referred to the combination of assumptions and choice of model as a scholar’s “preanalytic vision.”2

The following working assumptions are broad and highly generalized in nature.

  1. Economies and the global economy overall require energy, materials, diverse genetic/species/ecosystem patterns, and diverse reproductive capacities that are provided by healthy natural systems.
  2. Current levels of energy use, material flows, and genetic/species/ecosystem loss are both unnecessary to a good life and a threat to the health of natural systems.
  3. Economies, and the overall global economy, require healthy social systems.
  4. Current levels of material inequity are immoral, do not support human dignity, and are a threat to healthy social systems.
  5. Current rates of economic change, especially the drive for “globalization,” are outpacing our abilities to adapt and maintain the health of social systems.

Few ecological economists work from all of these assumptions, yet most acknowledge the importance of each and their interconnections with each other.

Threats to natural and social systems are a threat to people overall but they are especially a threat to today’s poor and to future generations. Ecological economists put social and natural systems, rather than individuals, at the center of their thinking. The term “social systems” encompasses all forms of economic and social organization, the legal and informal institutions that set the rules and the knowledge and shared beliefs that allow people to understand each other. The metaphor of “health” helps elaborate the meaning of the “mutual well-being of nature and people,” yet desirable properties of these systems remain vague. When empirical research is conducted, specific favorable qualities of social and environmental systems are adopted. Some ecological economists argue that energy use, material flows, or biodiversity are sufficient indicators of healthy biogeochemical systems. These effectively serve as the working assumptions of ecological economists when conducting specific analyses. With respect to social systems, justice, participation, shared-learning, human dignity, and other terms are often invoked.

Ecologists and natural scientists generally assume that the economy works within a larger biogeochemical system. Hence the appropriateness of “ecological” as a modifier to “economics.” The concern with human communities, and how these communities are threatened by inequity as well as the speed and character of current economic change, however, are nurtured by ecological economists’ broader roots in the social sciences and in applied work being conducted in developing countries. By identifying environmental and social systems as central to their thinking, ecological economists are explicitly arguing that they are important (e.g., that they have value in themselves).

The sub-points in the working assumptions with respect to materialism, growth, and inequity are even more clearly value judgments. There are corresponding values integral to the working assumptions of mainstream economists. The values, however, remain implicit, rather than explicit. By assuming, for example, that science allows us to “rise above” nature and that material progress helps everyone live a better life, conventional economists are implicitly valuing these approaches. Whether one a priori presents people as located in nature or rising above nature is not simply an issue of fact but is a goal or a statement of a preference. Similarly, ecological economists’ moral concern with the distribution of happiness and their strategic concern that inequity threatens the health of social and natural systems are difficult to separate. Such value judgments help ecological economists select and frame their research just as surely as historic beliefs about progress affects the research and literature of mainstream economists.

While this short description has emphasized an “intellectual community” engaged in ecological economics, the values and working assumptions attributed to ecological economists are also shared with development practitioners and people engaged in everyday life.



1 For definitional examples of ecological economics, see: Juan Martinez-Alier, Ecological Economics: Energy, Environment, and Society (Oxford: Basil Blackwell, 1987); Costanza, Robert, John Cumberland, Herman Daly, Robert Goodland, and Richard B. Norgaard. An Introduction to Ecological Economics. International Society for Ecological Economics; Boca, Fla.: St. Lucie Press, 1997; Peter Soderbaum, Ecological Economics: A Political Economics Approach to Environment and Development (London: Earthscan, 2000).

2 Herman E. Daly, Beyond Growth: The Economics of Sustainable Development (Boston, Mass.: Beacon Press, 1996).


Copyright © 2000 Richard B. Norgaard.
Reprinted with permission.