PARENT SESSION
Oral Session #73: Applied Ecology and Ecological Economics. Presiding: J. Hof.
Friday, August 10, 2001. 8:00 AM to 12:00 PM. Hall of Ideas P&Q.
The Ecological Structure of Economic Systems.
Koenig, Herman1, Cantlon, John1, 1
ABSTRACT- If ecology is to provide a natural-science foundation for economic theories and policies, it must be rigorous and quantitative as well as descriptive and qualitative. Such a theory has remained illusive to both economists and ecologists, but it is now beginning to emerge. This paper presents the basic elements of this emerging theory as a foundation for more comprehensive economic theories and policies. It begins by showing how the ecological parameters of production economies can be uniquely defined and quantified in terms of their constituent technologies and organization as a network. Their economic parameters are then derived as explicit mathematical functions of a) their ecological parameters, b) their prices as established by markets, and c) their policy parameters as established by their instruments of economic regulation. All instruments of economic regulation are formulated as active institutions of information feedback control on the priced ecology of economies. Given this ecological structure, it is shown that, in principle, market economies can be sustained indefinitely if, and only if, market prices on their defining boundary are strategically amended over time as required to contain technologically-generated risks to their systemic environment as a natural resource base.
KEY WORDS: production economics, input-output representations, environmental regulations, sustainable economies