1. Facoltà di Economia “G. Fuà” Università Politecnica delle Marche Facoltà di Economia “G. Fuà” Università Politecnica delle Marche 1 Ecological Economics (outline)  History and key concepts  Entropy and throughput  Ecological Economics and sustainability: the ecological footprint Topics

2. 2 Sustainability from ecological perspective  According to several economists (and not only economists) environmental sustainability can not be viewed from a so reductive and reductionist perspective:  A complete substitutability between artificial (K) and natural (E) capital does not exist (sustainability can only by “strong” not “weak”)  Sustainability is a property of the whole ecological system, can not be defined and pursued case-by-case (resource-by-resource)  The key-argument of this criticism is that environmental sustainability is a eco-system requisite concerning at once all natural resources and ecological processes  Eco-systems, by definition, are extremely complex systems based on multiple physical and biological equilibria. The only acceptable idea of sustainability must to take into account such complexity and, thus, must be mostly grounded in such physical-biological (namely, thermodynamic) foundations.

3. 3 Ecological Economics - 1 SOME DEFINITIONS: Ecological Economics is the union of Economics and Ecology, with the economy conceived as a subsystem of the Earth ecosystem. http://www.sustainableeconomics.org/Vo cabulary.htm Ecological Economics is conceptually pluralistic utilizing all the available links within economics and ecology and related studies to both understand and emphasize producing policy (normative & positive). Asks for a paradigm shift from current economic thinking. (R. Costanza and other sources)

4. 4 Ecological Economics - 2

5. 5 Ecological vs. Neo-Classical Economics  Ecological Economics (bio-economic approach)  Growth – increase in throughput or flow of natural resources from the environment, through the economy, and back as waste to the environment.  Development – increase in quality of goods or services, measured as increasing human welfare, with a constant amount of resources.  Capital – both man-made (artificial) and ecosystem (natural) capital – the latter not required to be in economic use.  Sink – part of the environment that receives waste and may be able to regenerate waste into usable form.  Neo-Classical Economics (mechanistic approach)  Growth - increase in the productive capacity of the economy as measured by market values.  Development – increase in GNP or GDP resulting from improvement in quality that increases utility.  Capital - Money or assets put to economic use. A factor of production such as land or labour. Natural Resources are not considered as capital (stocks) but only as resources (flows) that can be used in production such as minerals, fossil energy or timbers.  Sink – none

6. 6 The Laws of Thermodynamics I) Conservation of matter and energy in an isolated system, meaning:  Neither matter nor energy can be either created or destroyed II) Law of Entropy:  Entropy is a measure of depletion of energy capable to do work (free energy). In a isolated system Entropy spontaneously increases

7. 7 Economics, ecology and thermodynamics Entropy In an isolated system, the degree of “disorder”  while the quantity of usable (free) energy . An open (or non-isolated) system, on the contrary, may dynamically express forces (negentropic) that make entropy  From the ecological point of view, the key-idea behind sustainability must refer to the inherently physical nature of economic processes: they not only transform inputs into outputs as, in doing this, also spontaneously and irreversibly generate throughput, that is waste as well as energy dissipation, thus loss of energy capable of producing work (free energy)

8. 8 Throughput Neo-classical Economics Ecological Economics

9. 9 Indicators of ecological sustainability (just sketched): a. Exergy Though in an isolated system any process (economic or not) is by definition irreversible and unsustainable, it remains true that in the real world even economic processes can be energetically sustainable. To express this property a new concept has been introduced reconciling sustainability and thermodynamic equilibrium: EXERGY: It is the maximum quantity of excess free energy that a productive system (even economic) can release in the environment when it tends to its own thermodynamic equilibrium (i.e., it releases its negentropy, or negative entropy). A sustainable economic process or system thus implies positive Exergy, that is, it releases free energy.

10. 10 Indicators of ecological sustainability: b. Carrying capacity and ecological footprint A combination of strictly thermodynamic concepts of sustainability with socio-economic requisites of a system generates the carrying capacity of the system itself as a whole (ecosystem + society + economy). The carrying capacity of a system is: The maximum pressure it is able to sustain without loosing its stability and maintaining its fundamental structure and behavioural attitudes despite external changes (resilience) (ecological perspective) ….and without suffering either social negative feedbacks, in terms of congestion or externalities, or saturation of economics spaces with consequent loss of welfare (socio-economic perspective) A complementary concept with respect to carrying capacity is the ecological footprint: the size of terrestrial or water ecosystems demanded by a (human) population to satisfy its needs and assimilate its waste and by-products without destroying them (i.e respecting their capacity).

11. 11 Ecological Footprint (EF) by W.E. Rees and M. Wackernagel (1990) The Ecological Footprint measures the amount of biologically productive land (cropland, grazing land, forest, built up) and water (fishing ground) area required to produce all the resources an individual, population or activity consumed and to absorb the wastes they generated, given prevailing technology and resources management practices. EF unit: global hectare A global hectare represents a hectare with world average productivity

12. 12 Footprint (EF): How much of the regenerative capacity of the biosphere is used by human activities? Biocapacity (BC): How much is available within a region? Eco-Footprint Balance

13. 13 Earth’s Ecological Budget (~ 5 months) (National Footprint Account, 2009)

14. 14 EF vs BC - Time Series Number of Earths EF classical approach (OVERSHOOT) (SURPLUS)

15. 15 […] Ecological Footprint Analysis tracks the regenerative capacity of an ecosystem in terms of historical flows of natural resources. […] EF capture flows rather than stocks, and thus do not specify when overshoot will result in the total depletion of accumulated resources in an ecosystem. Global Footprint Network, 2009 National Footprint Atlas

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17. 17 EF size EF depth EF classic BC EO EF 3D EF approach area-based (space model) EF = BC + EO Footprint Approaches volume-based (space-time model) EF = BC x h where h is the depth Depth can be natural (h=1) additional (h>1)