An Introduction to Ecological Economics. – Review – book reviews

Richard B. Howarth

Costanza, Robert, John Cumberland, Herman Daly, Robert Goodland, and Richard Norgaard. 1997. St. Lucie/CRC Press. Boca Raton, Florida. xii + 275 p. $39.95, ISBN: 1-884015-72-7.

Costanza (1991. Ecological economics: the science of management and sustainability. Columbia University Press, New York) defined ecological economics as “the science and management of sustainability.” The present volume expands and expounds upon this definition to arrive at a broader, more synthetic approach to the diagnosis and resolution of environmental problems. Ecological economics, as the authors interpret it, encompasses a concern for: (1) sustainability, or the maintenance of human well-being and the services rendered by natural systems over intergenerational time scales; (2) economic efficiency, or the satisfaction of human preferences as operationalized through cost-benefit analysis; and (3) distributional equity, or the just sharing of burdens and benefits between social groups. This approach exceeds the traditional scope of environmental economics, which focuses rigorously (and at times rigidly) on questions of efficient resource allocation. It makes room for insights from ecology, politics, philosophy, and a range of other disciplines and yet is narrow enough to fall under the textbook definition of economics as the “allocation of scarce resources between competing ends.” The authors, I believe, provide an approach to their subject that is useful and well connected to the interdisciplinary fields of environmental studies and natural resource management.

Ecological economics was launched in the 1980s as a response to, and critique of, neoclassical environmental economics. The authors of this volume were instrumental in founding this still-evolving community of scholars and practicing professionals. Robert Costanza’s work, for example, has long emphasized the biophysical foundations of economic systems and the need to address flows of matter and energy in economic analysis. Herman Daly has highlighted the insufficiency of monetary valuation as a criterion of social choice, calling for a renewed emphasis on the moral foundations of economic thought with an explicit focus on long-term sustainability. And Richard Norgaard has stressed the interdependencies between natural and social systems, as well as the role of culture in constructing both scientific understandings and the prevailing values that surround economic decisions. The book carefully traces the history of these lines of reasoning and their links to the emergence of ecology and economics as disciplinary fields, advocating a return to the cross-cutting intellectualism that characterized pre-20th century thought. Interdisciplinary synthesis, the book asserts, will prove essential to overcoming the intellectual fragmentation that typically surrounds environmental problems.

Although this claim is generally well-founded, the book’s breadth and diversity of views presents certain difficulties in advancing its objectives. Both students and practitioners require parsimonious conceptual models that allow them to approach their work with clarity and confidence. To construct ecological economics as an all-encompassing corpus of criticism effectively limits the field’s scope for practical implementation. In this sense, the authors’ claim that ecological economics “is not a static set of answers” but rather “a dynamic, constantly changing set of questions” constrains their attempt to define a tractable approach to real-world problem-solving. It is one thing to question the specific normative and factual assumptions that drive neoclassical economics as an approach to policy analysis and management. It is a somewhat different task to construct an alternative that is intellectually grounded, practically operational, and tailored for professionalization.

As I noted above, the book defines sustainability, efficiency, and equity as three linchpins of ecological economics. With this in mind, it is useful to consider the meanings that the authors attach to these labels and their links to the surrounding literature. Sustainability, in the authors’ view, involves limiting the scale of economic activity so that the throughput of matter and energy does not overburden the resource supply and waste assimilative functions of ecological systems. With a sense of neomalthusian urgency, the authors assert that the scale of throughput is directly proportional to economic output so that sustainability requires restrictions on long-run economic growth. Critiques of this position are not seriously entertained, though many ecological economists see shifts in technologies and lifestyles as a way to promote enhanced economic welfare (though not unlimited growth) in a world of resource scarcity. The rationale for ecological conservation to promote intergenerational fairness in a world of scientific uncertainty is more fully developed elsewhere (Barbier, E. B., J. C. Burgess, and C. Folke. 1994. Paradise lost? The ecological economics of biodiversity. Earthscan, London, United Kingdom).

In addition to the need to conserve natural resources and environmental quality, the authors argue that sustainability entails the maintenance of aggregate human well-being as measured through green accounting. Citing the theoretical literature on natural resources and economic growth, the authors claim that an economy will be sustainable if net national product, measured as gross output minus the monetary value of resource depletion and environmental degradation, is constant or increasing over time. The discussion does not, however, explicitly note that this theoretical result holds only under specialized conditions: It assumes a world of constant population and technologies with no international trade in which all sources of market failure have been corrected so that prevailing prices reflect the true costs and benefits of resource allocation.

The book points to the importance of economic efficiency – the pursuit of outcomes that enhance the well-being of at least some people while leaving no one else worse off as a foundational goal of social choices and an important dimension of ecological economics. The implementation of this criterion through cost-benefit analysis is not discussed in detail, though treatments of this subject are readily available in textbooks on environmental economics and policy analysis. The concept of efficiency is most thoroughly explored in the book’s extensive, and quite interesting, discussion of policies, institutions, and instruments to achieve a sustainable society. This portion of the book examines cost-effective policy tools such as environmental taxes, the creation and extension of property rights, and conservation easements in the management of problems ranging from habitat preservation to greenhouse gas emissions abatement. There is an ample emphasis on real-world examples that should prove useful to both students and practitioners.

Finally, the book calls attention to the importance of achieving distributional fairness in economic and environmental planning but avoids the trap of reducing this objective to technocratic terms. Fairness, the authors point out, is properly understood in terms of ethical and political values. As such, analysts should appropriately identify the distributional consequences of alternative policies or resource management regimes while leaving the resolution of moral conflicts to the workings of deliberative democracy. The problem of fairness, then, both expands the scope of economic analysis and undercuts claims that economics offers unique criteria for “optimal” resource allocation.

It is perhaps this perspective on the heterogeneity of values and the necessity of interdisciplinary engagement that best distinguishes ecological economics as an emerging field of inquiry and practice. The authors are to be commended for their important contributions to this field even if their work leaves room for future elaboration and enrichment.


Dartmouth College Environmental Studies Program Hanover, New Hampshire 03755

COPYRIGHT 1998 Ecological Society of America

COPYRIGHT 2000 Gale Group

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