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vironmental impacts, i.e. the loss of biodiversity, caused by the supposedly positive
economic activities such as the manufacture and use of pesticides. The problem with
the now infamous pesticide DDT, first voiced by marine biologist Rachel Carson
(Carson, 1962), ignited the fire and was the catalyst for the socio-political aspects
of the environmental movement.
The environmental economic paradigm still strongly influences environmental
policies. The U.N. statistical framework SEEA (Sec. 2.5.1), the proposed OECD
Accounting Framework or the “genuine savings” concept adopted by the World Bank
are examples of its influence (Pearce and Atkinson, 1993; Hamilton, 1996; Hartwick,
2000). The conceptual revision of the GNP (Gross National Product) to reflect
changes in the net depreciation of manmade, natural, human and social capitals
used to measure sustainability is a contribution from this school of thought. As
Pearce (2002) states, “Two of the triumphs of environmental economics have been
to emphasise the incompleteness of appraisals that omit environmental change and
to develop the means of incorporating environmental values into appraisal”.
Practitioners of this school have also contributed greatly to the introduction
of environmental accounts into policymakers' thinking and planning. Their syste-
matic money solving approach, to any environmental problem, provides practical
solutions to take Nature into account(s). However, this monetary reductionism
yields doubtful results in controversial cases. The Cost-Benefit analysis is their
key tool for exploring optimal decisions among economic-environmental tradeoffs;
for instance, in justifying projects by compensating those set to lose out by the
existence of that same project should benefits exceed costs. Their valuations are
based on revealed preferences and firmly rely on market-based instruments like pol-
lution taxes, deposit-refund schemes and tradable pollution permits grounded on
the Polluter Pays Principle, choices of discount rate and concepts alike.
As can be seen from the above, environmental economists have traditionally
focused on pollution problems rather than on natural resource depletion. However
it is worth highlighting the fact that even with debatable valuation methodologies,
particularly in resources prone to depletion, environmental economists are convert-
ing their social demand for progress towards a sustainability which can be assessed
in quantitative terms.
2.4.4 The ecological economists' approach
The mathematician, statistician and economist Nicholas Georgescu-Roegen can be
considered as the father of the Ecological Economics school. It was however his
student Daly (1968) with his classical topic “Ecological Economics” who fostered
this discipline the most. The first formal efforts to bring ecologists and economists
together occurred in the 1980s, when the International Society for Ecological Eco-
nomics and the Ecological Economics Journal were established (Costanza, 2003).
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