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problem of resource depletion. Yet there is no direct link made which is indicative of
the relationship between the use of resources (minerals, energy, ecosystem services,
etc) and the associated environmental costs. There is no true objective desire to
seriously look at the consequences of production and whether it is sustainable in
the long term. Environmental deterioration due to production is simply treated as
a fact to be accounted. This is for the authors a major shortcoming, since it is not
enough to simply put some money aside in the hope that this may cover some of
the cost of natural capital.
2.5.3 The Hueting approach: environmental functions
In any production process, environment deteriorates at the expense of some eco-
nomic gain. For the sake of repairing the damaged caused, van Dieren (1995)
proposes that countries and companies should fork out for Environmental Defense
Expenditures (EDE), to remediate, mitigate, restore or avoid socially unacceptable
environmental degradation. These expenditures can be assimilated to replacement
investments that compensate the depreciation of Nature's machinery in manmade
capital. According to van Dieren (1995), these induced environmental costs are
the counterparts of economic growth and should be deducted in the national ac-
counts rather than added. Furthermore as Hueting (1980) states, there exists a
direct relationship between welfare as measured in the national accounts, environ-
mental defense expenditures and sustainability. This is because whilst some of the
present-day economy is needed to sustain welfare, some is also required to maintain
the environment. This environment, if su
ciently preserved, will then continue to
support current and generate future welfare. At the forefront of development there
should always be an assumed responsibility, fairness and a tradeoff between current
enjoyed and future non-enjoyed welfare.
Ecosystems, land, climate, renewable and non-renewable resources are environ-
mental functions that provide value to society. The cost of restoring, replacing
or repairing the depletion or degradation of these environmental functions should
be charged against income (Hueting, 1980; Hueting et al., 1992; Goodland, 1999).
Accordingly, in the case of renewable resources, the way to reach sustainability is
by maintaining, restoring and protecting those environmental conditions that allow
their regenerative capacity. For the case of non-renewable resources, the key idea
is “indefinitely” extending reserves. This could be achieved with a set of measures
which include increasing process e
ciency and the rate of recycling and substitu-
tion or eventually via the decreasing of consumption (as will be seen in Chap. 15
and Chap. 16). Such measures must above all compensate depletion insofar as the
annual consumption of the resource does not exceed the overall amount that can
be supplied indefinitely, either from its extraction as a raw material or from its
recycling and/or substitution.
The correlation between investments and their corresponding reduced environ-
mental impact is what Hueting calls the supply curve. The greater the investment
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