Ecological Economics

Humans have an absolute dependence on a continuous flow of natural resources to sustain their economic systems. There are two basic types of natural resources: nonrenewable and renewable. By definition, sustainable economic systems and sustainable human societies cannot be based on the use of nonrenewable resources, because these are always depleted by usage, a process referred to as "mining." Ultimately, sustainable systems can only be supported by the use of renewable resources, which if harvested and managed wisely, can be available forever. Because most renewable resources are the goods and services of ecosystems, economic and ecological systems are highly interdependent.

Potentially, renewable natural resources can sustain harvesting indefinitely. However, to achieve a condition of sustainable usage, the rate of harvesting must be smaller than the rate of renewal of the resource. For example, flowing water can be sustainably used to produce hydroelectricity or for irrigation, as long as the usage does not exceed the capacity of the landscape to yield water. Similarly, biological natural resources such as trees and hunted fish, waterfowl, and deer can be sustainably harvested to yield valuable products, as long as the rate of cropping does not exceed the renewal of the resource. These are familiar examples of renewable resources, partly because they all represent ecological goods and services that are directly important to human welfare, and can be easily valuated in terms of dollars.

Unlike conventional economics, ecological economics also considers other types of ecological resources to be important, even though they may not have direct usefulness to humans, and they are not valuated in dollars. Because the marketplace does not assign value to these resources, they can be degraded without conventional economic cost even though this results in ecological damage and ultimately harms society. Some examples of ecological resources that markets consider to be "free" goods and services include:

1. non-exploited species of plants and animals that are not utilized as an economic resource, but are nevertheless important because they may have undiscovered uses to humans (perhaps as new medicines or foods), or are part of the aesthetic environment, or they have intrinsic value which exists even if they are not useful to humans;
2. ecological services such as control over erosion, provision of water and nutrient cycling, and cleansing of pollutants emitted into the environment by humans, as occurs when growing vegetation removes carbon dioxide from the atmosphere and when microorganisms detoxify chemicals such as pesticides.