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