Page 161 - Environment: The Science Behind the Stories

market system. By combining aspects of both approaches, continues to drive most policy decisions, implies that inputs
mixed economies encourage stability and prosperity. When such as natural resources are free and limitless and that wastes
things get out of balance—such as when unregulated financial can be endlessly absorbed at no cost. In contrast, modern econ-
practices contributed to the U.S. recession in 2008–2009—then omists belonging to the fast-growing fields of environmental
prosperity may decline, and balance may need to be restored. economics and ecological economics (p. 168) explicitly recog-
nize that economies exist within the environment and depend
Economies rely on goods and services crucially upon it for natural resources and ecosystem services.
from the environment Natural resources (pp. 21–22) are the various substances
and forces that sustain our society and our everyday lives: the
Our societies and our economies exist within the natural fresh water we drink, the trees that provide our lumber, the
environment and depend on it in vital ways. Economies rocks that provide our metals, and the energy from the sun,
receive inputs (such as natural resources and ecosystem ser- wind, water, and fossil fuels. We can think of natural resources
vices) from the environment, process them in various ways, as “goods” produced by nature. Environmental systems also
and discharge outputs (such as waste) into the environment naturally function in a manner that supports our economies.
(FIguRE 6.9). The material inputs and the waste-absorbing Earth’s ecological systems purify air and water, form soil, cycle
capacity that Earth can provide are ultimately finite. nutrients, regulate climate, pollinate plants, and recycle waste.
Although the interactions between economies and the Such essential ecosystem services (pp. 21, 134–135, 170, 308)
environment are readily apparent, traditional economic schools support the very life that makes our economic activity possible.
of thought have long overlooked their importance. Many main- Together, nature’s resources and services make up the natural
stream economists still adhere to a worldview that largely capital (p. 32) on which our economies and societies depend.
ignores the environment (considering only the yellow box While our environment enables economic activity by
in the middle of Figure 6.9). This conventional view, which providing ecosystem goods and services, economic activity

Ecosystem services
(e.g., recreation, pollination of crops, etc.)
ENVIRONMENT

ECONOMY

Agriculture, industry, business

Products Payment
Wages Labor Recycling (goods and for
services) products

Natural resources Waste acceptance
(ecosystem goods) (ecosystem service)
Households

Natural recycling: Climate regulation,
air and water purification,
nutrient cycling, etc.
(ecosystem services)

FIguRE 6.9 Economies exist within the natural environment, receiving resources from it, discharg-
ing waste into it, and benefiting from ecosystem services. Conventional neoclassical economics has
focused only on processes of production and consumption between households and businesses (yellow box
in middle), viewing the environment merely as an external factor that helps enable the production of goods. In
contrast, environmental and ecological economists explicitly recognize that economies exist within the natural
160 environment and depend on all that it offers.

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