Economists vs. Ecologists: Bridging the Gap

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The gap between economists and ecologists in their perception of the world as the 21st century began could not have been wider. Economists looked at the unprecedented growth of the global economy and of international trade and investment and forecast a promising future with more of the same. They noted with justifiable pride the sevenfold expansion of the economy since 1950, which raised output from $6 trillion of goods and services to $43 trillion in 2000 and boosted living standards to levels not dreamed of before. Ecologists looked at this same growth and realized that it was the product of burning vast quantities of artificially cheap fossil fuels, a process that destabilizes the climate. They looked ahead to see more intense heat waves, more destructive storms, melting ice caps and rising sea levels that would shrink the land area even as population continued to grow. While economists saw booming economic indicators, ecologists saw an economy that is altering the climate with unthinkable consequences.

Economists rely on the market to guide their decision-making. They respect the market because it can allocate resources with an efficiency that a central planner can never match (as the Soviets learned at great expense). Ecologists view the market with less reverence because they see a market that is not telling the truth. For example, when buying a gallon of gasoline, customers in effect pay to get the oil out of the ground, refine it into gasoline, and deliver it to the local service station. But they do not pay the health care costs of treating respiratory illness from air pollution, or the costs of climate disruption.

We have created an economy that is in conflict with its support systems, one that is fast depleting the Earth’s natural capital, moving the global economy onto an environmental path that will inevitably lead to economic decline. This economy cannot sustain economic progress; it cannot take us where we want to go. Just as Copernicus had to formulate a new astronomical worldview after several decades of celestial observations and mathematical calculations, we too must formulate a new economic worldview based on several decades of environmental observations and analyses. A stable relationship between the economy and the Earth’s ecosystem is essential if economic progress is to be sustained.

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