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HeterodoxFrom 1971

Ecological economics

How does an economy work when it sits inside a finite planet?

The 30-second version

The economy sits inside nature, not the other way round. Endless growth on a finite planet is impossible, so wellbeing within limits should replace GDP as the goal. The big argument: can technology decouple growth from emissions fast enough?

Big questions it works on

Go deeperKey ideas, thinkers, evidence and where it stands today

Key ideas

  • The economy is a subsystem of the biosphere, not the other way round.
  • Physical limits and entropy constrain growth (Georgescu-Roegen, 1971).
  • A steady-state economy as a goal (Herman Daly).
  • “Doughnut economics”: meet everyone's needs without overshooting planetary boundaries (Kate Raworth, 2017).

Key thinkers

Nicholas Georgescu-Roegen, Herman Daly, Kate Raworth, Tim Jackson

What it got right

GDP is a poor measure of wellbeing and ignores depletion of nature. Amsterdam adopted the doughnut model as a city strategy in 2020.

Main criticisms

Mainstream environmental economists argue growth and emissions can be decoupled with carbon pricing and technology. William Nordhaus won the 2018 Nobel for integrating climate into growth models.

Evidence worth knowing

UK territorial emissions roughly halved between 1990 and the early 2020s while the economy grew. A 2020 review by Haberl and colleagues found decoupling of that kind rare and too slow for climate targets.

Where it stands today

Its own journals and societies; rising student interest. Several national statistics offices, including the UK's and New Zealand's, now publish well-being measures alongside GDP.

Family line

Reacting against growth as the default goal of mainstream economics.

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