Ecological Economics and
Biodiversity Conservation
Saroj Upadhyay
What is Economy?• An economy is a system of production, distribution and
consumption of goods and services that satisfies people’s wants or needs.
Economic resources: 4 kinds• Natural resources/capital• Human resources• Financial resources• Manufactured resources
Types of Economic systems
Economic
system
Market
Pure Free
Market
Capitalist
Market
Command
What Causes Environmental Impacts
Types of Economic System
Cause of Environmental pollution and Degradation
Command Economic activities (flow of matter and energy resources)
Market Too little economic incentives to care for the environment
Environmental Decline
• Conventional economics underlies the assumption that an economy is a system that is essentially isolated form the natural world and only involves a circular exchange of goods and services between businesses and households.
• Ignores the origin of natural resources flowing into the system and the fate of the wastes flowing out of the system
Environmental Decline
• Biodiversity is under serious threat from human activities that lead to land use, fragmentation, harvesting, hunting, pollution and climate change
• With continued economic growth, it is likely that the pressure on current biodiversity will increase
• Depletion of resources and discharge of waste into the biosphere
GNI and GDP1. GNI and GDP hide the harmful environmental
and social effects of producing goods and services
2. GNI and GDP does not include the depletion and degradation of natural resources
3. GNI and GDP hide the enormous waste of natural and human resources because they measure only money spent
4. GNI and GDP does not tell anything about income distribution and economic justice
Environmental Kuznets Curve (EKC)
The EKC hypothesis suggests that environmental effects are initially low at low levels of economic growth. However, as development proceeds, the rate of pollution increases. At higher levels of economic development, countries are able through structural change to substitute towards industrial and agricultural technologies that are less harmful to the environment.
Ecological Economics
• Ecological economics is a transdisciplinary field that aims to improve and expand economic theory to integrate the earth’s natural systems, human values and human health and well-being.
• Consider the earth’s natural resources vital because they support all life and economic systems
• Believe conventional economic growth as unsustainable• Integrates Ecology with Economics
Capitals in Ecological Economics
Built: Buildings, cars, infrastructure created by human industry.
Social: Interactions with others (friends, family) and structure of society (language, institution, laws)
Natural: Goods and services provided by nature Human: Sum of our own health, personal experiences, education, talents, skills and interests
Paradiam Shift
• The Industrial Age view
11
• The Sustainability Age view
Economy
Society Environment
Environment
Society
Economy
Comparison: Conventional unsustainable and Environmentally sustainable economic growth
Characteristics Unsustainable Economic Growth
Sustainable Economic Growth
Production emphasis
Quantity Quality
Natural Resources Not very Important Very Important Resource productivity
Inefficient (high waste) Efficient (low waste)
Resource input High Low Emphasized resource type
Non-renewable Renewable
Resource fate Matter discarded 3RPollution control Cleanup (output
reduction)Prevention (input
reduction)Guiding principles Risk benefit analysis Prevention and
precaution
Ecological Economics And Biodiversity Conservation
• Biodiversity as the underpinning foundation of ecological economics as it provides the ecosystem services and resources upon which economic activity depends
• Biodiversity can provide economic benefits and conservation should be viewed as an area of economic opportunity, and not as a constraint
Fiber
Food
Spiritual & religious
Freshwater
Genetic resources
Climate regulation
Water purification
Disease regulation
Flood/Fire regulation
Recreation & tourism
Aesthetic
Economic Value ($)
Economic
Valuation
Difficult or
impossible
Easy?
?
?
?
?
?
?
?
?
?
?
Economics of Ecosystem and Biodiversity
Monetary: e.g. avoided water purification costs, avoided flood damage, tourist value, value of medicines / pharmaceuticals from natural products
Qualitative: e.g. health benefits from clean air, social benefits from recreation, income from products, security, wellbeing.
Ecological Economics And Biodiversity Conservation
Ecological economics doesn't sees biodiversity conservation as a cost but rather as an opportunity • to increase the profits from various economic activities,• to mitigate risks and decrease costs due to degraded
ecosystems• as well as to develop new products taking advantage of
the benefits provided by nature in a sustainable manner.
Conclusion