Ecological Economics at Rensselaer
A Systems Approach to Sustainability
One of the two focal areas for Rensselaer's department of economics is ecological economics. The central insight of ecological economics is that the human economy is part of the global environmental system. Economic activity is invariably dependent on natural resources, generates material wastes, and is governed by the same biophysical laws as the rest of the physical environment. The name ecological economics reflects concern with extending and integrating the study and management of nature's household (ecology) and humankind's household (economics). When ecological economists study human activity, they situate this activity within the environment, and when they study the natural environment, they take account of human interests and activities. Ecological economics is a systems approach with a global perspective on human resource use, economic development, and the environment. Ecological economists are concerned not only, like other economists, with efficiency and equity, but also with environmental and social sustainability.
Ecological economics has been called the "science of sustainability." It includes a theoretical framework and empirical explorations coupled with strong policy motives and relevance. The key research focus is on understanding the working of the human-environment system using an integrated, interdisciplinary approach. Some studies are mainly problem- and policy- driven, with the question of how to achieve sustainability as the primary objective.
Concepts and Methods from Economics -- and from Environmental and Social Sciences
Ecological economics is methodologically pluralistic, meaning that ecological economists have a variety of views about what ecological economics is and what its primary focus should be. Clearly ecological economics reaches beyond the scope of traditional economics, and the profession includes people with diverse training and interests. Ecological economics broadens the classical economist's concerns with the origin of wealth and the development of the economic system.
Methodological pluralism means that researchers do not subscribe to a single unified theory or methodology. It is a strength of the field that economic, social and natural science concepts and methods can be brought together, reflecting new perspectives on complex problems. However, all ecological economic analysis must be grounded in solid biophysical and psychosocial foundations. Thus economic production possibilities are explicitly constrained by physical laws, at the limit those of thermodynamics, and models of human behavior reflect psychological and social realities. Testing and validating theory with empirical analysis is central to ecological economics and reflects the rigor expected of any scientific enterprise but with less reliance on maintained assumptions than in long-established fields.
Mainstream economics focuses primarily on the goal of efficiency. Social concerns take the form of the relative equality of the distribution of income or wealth, which are considered but often regarded as being beyond the realm of economics. In fact, economics is often defined as the allocation of scarce resources among competing uses. For ecological economists, international and intergenerational equity and sustainable development including environmental sustainability are goals that are at least as important as mere efficiency. This conviction leads to distinctive approaches to policy analysis and advice including reliance on stakeholder input, multicriteria analysis, and alternative methods of evaluating impacts of actual projects or hypothetical scenarios about the future. Increasingly, ecological economists are investigating the roles that a fuller set of stakeholders, including not only business firms and government policy-makers but also households and NGOs, can play in helping achieve environmental, economic and social sustainability.