Lecture Changing perspectives on the environment

ECONOMIC APPROACHES TO THE ENVIRONMENT

While economists have thought about various natural resource issues for hundreds of years, the existence of environmental economics as a specific field of economics dates back only to the 1960s, concurrent with the growing awareness of environmental issues discussed above. Environmental economists apply mainstream economic principles to environmental and natural resource issues.

Even more recently (dating back to the 1980s), ecological economics has emerged as a field which brings together viewpoints from different academic disciplines to study the interactions between economic and ecological systems. Unlike environmental economics, ecological economics is defined not so much by the application of a particular set of economic principles, but by analyzing economic activity in the context of the biological and physical systems that support life, including all human activities.

We will draw upon both approaches in this book. For most of the remainder of this chapter we will discuss the main differences between the two approaches. However, we should first emphasize that the boundary between environmental and ecological economics is a blurred one, with considerable overlap. A 2014 review of journal articles published in both fields finds that they have grown closer over time. Some economists consider the two fields to have essentially merged into “environmental and ecological economics.” Others call for a new term, such as “sustainability economics” which “lies at the intersection of the two and uses concepts and methods of both.”

The economic and ecological analyses that we will review offer a spectrum of viewpoints which can all contribute to solving myriad environmental challenges. But enough differences still exist so that one can differentiate between environmental economics and ecological economics in several respects. We now try to do that in more detail.