Biodiversity and Conservation 11: 1505–1507, 2002.
Book review
The Economics of Nature and the Nature of Economics
Edited by C. Cleveland, D. Stern and R. Costanza, Edward Elgar, Cheltenham, 2001,
293 pp, ISBN 1 85898 980 9 (hardback), £59.95.
For non-economists working on environmental issues, there will be an understandable
confusion over the terms ‘ecological economics’ and ‘environmental economics’. En-
vironmental economics has been a rigorous sub-discipline of economics since the
1960s and perhaps dates from the establishment of the independent research institu-
tion, Resources for the Future in Washington, DC in 1952. As such there is around
a half century of theory and empirical application which has clearly shown that en-
vironmental problems often have their origins in the mis-workings of the economic
system, and that solutions therefore also lie in making some adjustment to those eco-
nomic systems. A formidable body of analysis devoted to finding the economic value
of natural resources and to designing incentive systems, such as environmental tax-
es and tradable permit schemes, has evolved. ‘Ecological’ economics, on the other
hand, claims to be something new and different, although even the most ardent ad-
vocate of ecological economics would accept that he or she borrows heavily from
environmental economics.
But is ‘ecological’ economics new and different? The contributors to this volume
appear to think so and the editors assert that it is so. Unfortunately, they do a dis-
service by seeking to differentiate the subject with the use of obscure and unhelpful
language. The first step towards ecological economics, we are told, consists of ‘a sci-
entifically informed characterization of production inputs and processes. This would
be based on ecological characterization of flows of materials, energy and informa-
tion, and the technologies, organization and learned skills that transform and convert
materials, energy and information’ (p. 2). Obscurantism is usually a signal that there
is little of real worth in what is being said. But what this seems to say is that outputs
come from materials, energy, technology, and what today would be called human
capital. If so, it is difficult to fathom why this is any different to the way econom-
ics has classified inputs in the last century or so. The second feature of ecological
economics is more comprehensible – activities should be described according to the
biophysical limits which may constrain their increase. But the notion of biophysical
limits is not new either. The notion of ‘spaceship’ earth, for example, dates back four
decades before anyone dreamed of an ‘ecological’ economics.
Another theme relates to substitution. Here it is possible to find some differences.
In environmental economics there usually is (but there does not have to be) an as-