MODULE :ECS2606
,ECS2606 Exam Pack
Contains:
• Exam Questions & Answers
• Exam Study Notes
• Assignment Questions & Solutions
, ECS2606 NOV 18
1. Explain the difference between neoclassical environmental economics,
resource economics and ecological economics. [10]
Environmental economics tends to look at market-based natural resource use, management,
and the impacts of environmental policy on the market with a notion that economic growth
can continue beyond the confines of the physical environment. In other words,
environmental economics operates within a neo-classical economic paradigm that the
economy's growth can operate entirely independent of the limits of the physical
world. Externalities--health, quality of life, education, etc.--are frequently discounted in
assessments of wealth. Well-being tends to be measured and interpreted in terms of GDP.
Ecological economics, as intrinsic to the name, examines the world from a complex systems
perspective and draws interdisciplinarity from principles of biology, ecology, and various
fields of sociology and ethics. Ecological economics approaches economics from a
perspective that places the economy as a subset of the environment.
Resource economics:
Sees nature as a provider of energy and materials. Is an
anthropocentric view. Interdisciplinary. Looks at sustainability and the interdependence of
economic and ecological systems. For this type of economics, natural sciences are needed
to gain an understanding of economic/environmental problems.
Primary problem: limited stocks and the cake-eating problem.
Resources in conventional economics are thought to be Labour, Capital, Land and energy.
Environmental economics typically operates within a neo-classical economic paradigm that
assumes no limits to economic growth. It tends to rely on the notion that innovation and the
market can continue to meet the needs of demand. The discipline draws many of its
governing principles from reductive mathematic models via physics. It also relies upon the
notion of wealth via abstract and essentially arbitrary interest rates in money typically
determined by the banking system. The systems and its core assumptions typically are not
conceived as beholden to the rules of thermodynamics and our relationship with the
1
, environment (money, unlimited economic growth, etc.).
Ecological economics invites a more anthropocentric and ecocentric perspective for the
world's systems. It assumes the capacity of our ability to exist, and in turn the economy's
ability to function, depend upon the quality of the environment and the relationships or
processes that happen within it. The economy is accountable to the physical constraints of
the planet.
- Guided by natural laws such as Thermodynamics
- Matter evolves through adaptation and learning, evolution, or positive feedback loops,
occur
- Steady state – resources for production and pollutants are kept steady
- Distribution of rights is important for sustainability as whoever owns the right controls
how that good is used, the type of products produced, and who consumes the goods
- Economy is a subset of the environment.
- Externalities needs to be incorporated into the market through more extensive valuation
Techniques
- Uses a transdisciplinary approach – necessary for construction and analysis of wicked
problems
For ecological economics there are two kinds of capital: Natural and manmade.
Consequently, there are two sources for our welfare: Services of natural capital (ecological
services) and manmade capital. And that’s the main biggest difference between the
conventional (neoclassical) and ecological economics. Conventional economists have a
narrow minded focus on manmade capital and services. They usually ignore that an intact
ecology provides us with the most essential products and services like clean air and water,
mild climate, food, medical plants, erosion prevention, recreation, meaning and enjoyment
in life.
2
,ECS2606 Exam Pack
Contains:
• Exam Questions & Answers
• Exam Study Notes
• Assignment Questions & Solutions
, ECS2606 NOV 18
1. Explain the difference between neoclassical environmental economics,
resource economics and ecological economics. [10]
Environmental economics tends to look at market-based natural resource use, management,
and the impacts of environmental policy on the market with a notion that economic growth
can continue beyond the confines of the physical environment. In other words,
environmental economics operates within a neo-classical economic paradigm that the
economy's growth can operate entirely independent of the limits of the physical
world. Externalities--health, quality of life, education, etc.--are frequently discounted in
assessments of wealth. Well-being tends to be measured and interpreted in terms of GDP.
Ecological economics, as intrinsic to the name, examines the world from a complex systems
perspective and draws interdisciplinarity from principles of biology, ecology, and various
fields of sociology and ethics. Ecological economics approaches economics from a
perspective that places the economy as a subset of the environment.
Resource economics:
Sees nature as a provider of energy and materials. Is an
anthropocentric view. Interdisciplinary. Looks at sustainability and the interdependence of
economic and ecological systems. For this type of economics, natural sciences are needed
to gain an understanding of economic/environmental problems.
Primary problem: limited stocks and the cake-eating problem.
Resources in conventional economics are thought to be Labour, Capital, Land and energy.
Environmental economics typically operates within a neo-classical economic paradigm that
assumes no limits to economic growth. It tends to rely on the notion that innovation and the
market can continue to meet the needs of demand. The discipline draws many of its
governing principles from reductive mathematic models via physics. It also relies upon the
notion of wealth via abstract and essentially arbitrary interest rates in money typically
determined by the banking system. The systems and its core assumptions typically are not
conceived as beholden to the rules of thermodynamics and our relationship with the
1
, environment (money, unlimited economic growth, etc.).
Ecological economics invites a more anthropocentric and ecocentric perspective for the
world's systems. It assumes the capacity of our ability to exist, and in turn the economy's
ability to function, depend upon the quality of the environment and the relationships or
processes that happen within it. The economy is accountable to the physical constraints of
the planet.
- Guided by natural laws such as Thermodynamics
- Matter evolves through adaptation and learning, evolution, or positive feedback loops,
occur
- Steady state – resources for production and pollutants are kept steady
- Distribution of rights is important for sustainability as whoever owns the right controls
how that good is used, the type of products produced, and who consumes the goods
- Economy is a subset of the environment.
- Externalities needs to be incorporated into the market through more extensive valuation
Techniques
- Uses a transdisciplinary approach – necessary for construction and analysis of wicked
problems
For ecological economics there are two kinds of capital: Natural and manmade.
Consequently, there are two sources for our welfare: Services of natural capital (ecological
services) and manmade capital. And that’s the main biggest difference between the
conventional (neoclassical) and ecological economics. Conventional economists have a
narrow minded focus on manmade capital and services. They usually ignore that an intact
ecology provides us with the most essential products and services like clean air and water,
mild climate, food, medical plants, erosion prevention, recreation, meaning and enjoyment
in life.
2
