Ecological Economics: Principles and Applications / Edition 1

Ecological Economics: Principles and Applications / Edition 1

by Herman E. Daly, Joshua Farley

ISBN-10: 1559633123

ISBN-13: 9781559633123

Pub. Date: 10/28/2003

Publisher: Island Press

<p>Conventional economics is increasingly criticized for failing to reflect the value of clean air and water, species diversity, and social and generational equity. By excluding biophysical and social reality from its analyses and equations, conventional economics seems ill-suited to address problems in a world characterized by increasing human impacts and


<p>Conventional economics is increasingly criticized for failing to reflect the value of clean air and water, species diversity, and social and generational equity. By excluding biophysical and social reality from its analyses and equations, conventional economics seems ill-suited to address problems in a world characterized by increasing human impacts and decreasing natural resources.<p>Ecological Economics is an introductory-level textbook for an emerging paradigm that addresses this fundamental flaw in conventional economics. The book defines a revolutionary "transdiscipline" that incorporates insights from the biological, physical, and social sciences, and it offers a pedagogically complete examination of this exciting new field. The book provides students with a foundation in traditional neoclassical economic thought, but places that foundation within a new interdisciplinary framework that embraces the linkages among economic growth, environmental degradation, and social inequity.<p>Introducing the three core issues that are the focus of the new transdiscipline -- scale, distribution, and efficiency -- the book is guided by the fundamental question, often assumed but rarely spoken in traditional texts: What is really important to us? After explaining the key roles played by the earth’s biotic and abiotic resources in sustaining life, the text is then organized around the main fields in traditional economics: microeconomics, macroeconomics, and international economics. The book also takes an additional step of considering the policy implications of this line of thinking.<p>Ecological Economics includes numerous features that make it accessible to a wide range of students:<ul><li> more than thirty text boxes that highlight issues of special importance to students<li> lists of key terms that help students organize the main points in each chapter<li> concise definitions of new terms that are highlighted in the text for easy reference<li> study questions that encourage student exploration beyond the text<li> glossary and list of further readings</ul><p>An accompanying workbook presents an innovative, applied problem-based learning approach to teaching economics.<p>While many books have been written on ecological economics, and several textbooks describe basic concepts of the field, this is the only stand-alone textbook that offers a complete explanation of both theory and practice. It will serve an important role in educating a new generation of economists and is an invaluable new text for undergraduate and graduate courses in ecological economics, environmental economics, development economics, human ecology, environmental studies, sustainability science, and community development."

Product Details

Island Press
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7.00(w) x 9.00(h) x 1.40(d)

Table of Contents

A Note to Instructorsxvii
Part IAn Introduction to Ecological Economics1
Chapter 1Why Study Economics?3
What Is Economics?3
The Purpose of This Textbook5
Coevolutionary Economics7
The Era of Ecological Constraints10
Big Ideas to Remember13
Chapter 2The Fundamental Vision15
The Whole and the Part15
Optimal Scale16
Diminishing Marginal Returns and Uneconomic Growth19
A Paradigm Shift23
Say's Law: Supply Creates Its Own Demand26
Leakages and Injections26
Linear Throughput and Thermodynamics29
Big Ideas to Remember35
Chapter 3Ends, Means, and Policy37
Ends and Means--A Practical Dualism37
The Presuppositions of Policy43
Determinism and Relativism44
The Ends-Means Spectrum48
Three Strategies for Integrating Ecology and Economics50
Big Ideas to Remember56
Conclusions to Part I57
Part IIThe Containing and Sustaining Ecosystem: the Whole59
Chapter 4The Nature of Resources and the Resources of Nature61
A Finite Planet62
The Laws of Thermodynamics64
Stock-Flow Resources and Fund-Service Resources70
Excludability and Rivalness72
Goods and Services Provided by the Sustaining System74
Big Ideas to Remember76
Chapter 5Abiotic Resources77
Fossil Fuels78
Mineral Resources83
Ricardian Land88
Solar Energy89
Summary Points91
Big Ideas to Remember92
Chapter 6Biotic Resources93
Ecosystem Structure and Function93
Renewable Resources98
Ecosystem Services103
Waste Absorption Capacity107
Big Ideas to Remember110
Chapter 7From Empty World to Full World111
Fossil Fuels113
Mineral Resources116
Renewable Resources118
Waste Absorption Capacity119
Big Ideas to Remember121
Conclusions to Part II122
Part IIIMicroeconomics123
Chapter 8The Basic Market Equation125
Components of the Equation126
What Does the Market Equation Mean?131
Monopoly and the Basic Market Equation133
Non-Price Adjustments134
Supply and Demand136
Big Ideas to Remember140
Chapter 9Supply and Demand141
A Shift in the Curve Versus Movement Along the Curve141
Equilibrium P and Q, Shortage and Surplus143
Elasticity of Demand and Supply146
The Production Function148
The Utility Function152
Big Ideas to Remember155
Chapter 10Market Failures157
Characteristics of Market Goods157
Open Access Regimes161
Excludable and Nonrival Goods164
Pure Public Goods168
Missing Markets180
Summary Points182
Big Ideas to Remember183
Chapter 11Market Failures and Abiotic Resources185
Fossil Fuels186
Mineral Resources192
Ricardian Land198
Solar Energy200
Big Ideas to Remember200
Chapter 12Market Failures and Biotic Resources201
Renewable Resource Stocks and Flows201
Renewable Resource Funds and Services211
Waste Absorption Capacity215
Biotic and Abiotic Resources: The Whole System218
Big Ideas to Remember219
Conclusions to Part III220
Part IVMacroeconomics221
Chapter 13Macroeconomic Concepts: GNP and Welfare223
A Troubled Marriage224
Gross National Product228
Sustainable Income232
Alternative Measures of Welfare: MEW and ISEW233
Beyond Consumption-Based Indicators of Welfare237
Big Ideas to Remember244
Chapter 14Money245
Virtual Wealth248
The Fractional Reserve System252
Money as a Public Good253
Money and Thermodynamics255
Big Ideas to Remember258
Chapter 15Distribution259
Pareto Optimality259
The Distribution of Income and Wealth262
The Functional and Personal Distribution of Income263
Measuring Distribution264
Consequences of Distribution for Community and Health267
Intertemporal Distribution of Wealth268
Big Ideas to Remember276
Chapter 16The IS-LM Model277
IS: The Real Sector279
LM: The Monetary Sector282
Combining IS and LM285
Exogenous Changes in IS and LM286
IS-LM and Monetary and Fiscal Policy289
IS-LM in the Real World299
Adapting IS-LM to Ecological Economics302
Big Ideas to Remember304
Conclusions to Part IV305
Part VInternational Trade307
Chapter 17International Trade309
The Classical Theory: Comparative Advantage309
Kinks in the Theory312
Capital Mobility and Comparative Advantage314
Absolute Advantage316
Globalization vs. Internationalization317
The Bretton Woods Institutions318
The World Trade Organization319
Summary Points321
Big Ideas to Remember321
Chapter 18Globalization323
Efficient Allocation323
Sustainable Scale331
Just Distribution333
Summary Points340
Big Ideas to Remember341
Chapter 19International Flows and Macroeconomic Policy343
Balance of Payments344
Exchange Rate Regimes344
Capital Mobility and National Policy Levers346
Economic Stability348
Big Ideas to Remember355
Conclusions to Part V356
Part VIPolicy357
Chapter 20General Policy Design Principles359
The Six Design Principles360
Which Policy Comes First?363
Controlling Throughput365
Price vs. Quantity as the Policy Variable366
Source vs. Sink368
Policy and Property Rights369
Big Ideas to Remember372
Chapter 21Sustainable Scale373
Direct Regulation373
Pigouvian Taxes376
Pigouvian Subsidies378
Tradeable Permits379
Policy in Practice385
Big Ideas to Remember387
Chapter 22Just Distribution389
Caps on Income and Wealth390
Minimum Income393
Distributing Returns from the Factors of Production395
Additional Policies404
Big Ideas to Remember404
Chapter 23Efficient Allocation405
Pricing and Valuing Nonmarket Goods and Services405
Spatial Aspects of Nonmarket Goods415
Redefining Efficiency422
Big Ideas to Remember424
Looking Ahead425
Suggested Readings443
About the Authors447

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