ECOLOGICAL ECONOMIC THEORY
Wednesdays, 2:35-5:35 PM
Gund Conference Room
Instructor Professor
Joshua Farley
Office
205
B Morrill Hall
Phone 802-656-2989
E-Mail jfarley@uvm.edu
Office Hrs TBA
Economics is frequently defined as the study of the allocation of scarce resources among alternative desirable ends, within and between generations: how we balance what is physically and ecologically possible with what is morally, socially and psychologically desirable. Economics should be based on the best available science from across the disciplines, but must ultimately be driven by normative values.
This course introduces ecological economics as a transdisciplinary field dedicated to solving pressing economic, social, and environmental problems. Ecological economics assesses the desirable ends of economic activity (a normative question), the nature of the available resources required to achieve those ends, existing institutions, and our knowledge of human behavior before deciding how to allocate. The most widely accepted desirable endin conventional economics is the satisfaction of subjective preferences through market allocation[1], which boils down to the maximization of monetary value. The desirable ends in ecological economics emphasize sustainability, justice, and a satisfactory quality of life for this and future generations of humans and other species. Ecological economics also differs from conventional economics in assuming that the economic system is embedded in a social system, which in turn is embedded in a finite global ecosystem. The economy is a physical system subject to the laws of both physics and ecology. The global ecological-economic system is highly complex adaptive system, non-linear and continually evolving. Simple answers to difficult questions rarely exist, and answers that were correct in the past may no longer be correct today.
The scientific method is based on falsification: one can never prove a theory to be true, but if empirical evidence contradicts a theory, then it can be proven false. Many ecological economists adhere to the philosophical tradition of pragmatism, which extends empirical testing to normative values. For example, many economists argue that individual choice (typically as expressed in the market) should drive all economic decisions, but ecological economists assert that this normative value should be tested in light of the results it generates. Pragmatism also holds that the goal of good theory to generate accurate predictions and acceptable solutions to real life problems rather than prioritizing an accurate representation of reality. We will use current events to ÔtestÕ both positive theory and normative values.
1.
Construct the pre-analytic vision of ecological economics
2.
Formulate a whole systems approach to ecosystem structure and
function.
3.
Formulate a whole system approach to the human subsystem
structure and function.
4.
Evaluate and design policy tools based on ecological
economic principles.
5.
Explore possible future paths for ecological economics
6.
Construct a web site to facilitate the teaching and learning of
ecological economics
7.
Develop peer
mentoring relationships and connections to the Gund Institute learning
community.
The class is organized as a
graduate student seminar, with weekly readings and discussion, group and
individual presentations, and work on teaching/learning modules for an
ecological economics website. The class is designed to be very interactive,
with lots of good discussion, and depends entirely on your active engagement. When you fail to do the readings and
come to class unprepared, you let down the entire class.
Each class will focus on a major theme in
ecological economics. For each
theme I have selected at least three articles, book chapters, or other readings with an emphasis on introducing you to
leading ecological economists as well as important topics.
During the portion of each class I will present the overall theme and lead
discussion. During
the second portion
of class, one or two different students will present important
papers on the week's topic (one each, or
two jointly) and lead discussion; alternatively we will break up into
groups by University to discuss the questions you previously provided.
You can find a paper on your own, or present one of the recommended
readings. E4A students should try to present material Two days prior to each class, all students will submit carefully thought out discussion points
based on that weekÕs readings. This means that all readings must be done
in advance. I will select particularly
good discussion points, and those students who submitted them will lead
discussion for the final portion of the class (45 minutes - one hr.). Throughout the semester, I will expect
students to keep up on current events, and integrate those relevant to the
weekÕs material into the discussions. We will treat current events as empirical
tests of the theories presented.
Our major project will be to
develop web based modules based on each class topic. Conventional economics
textbooks typically have accompanying websites that provide professors with all
the material needed to easily deliver a course, but there is little of
this nature available in ecological economics. Student groups will therefore
build detailed modules that provide reading materials, lecture notes and
slide presentations, exercises and assignments, evaluation materials, and
any other material required to effectively deliver a course or facilitate
self-learning. Among other options,
we could ask ecological economists from around the world to develop teaching
modules based on their own work, perhaps a specific paper. We could design the site to allow
users to review the modules and creators to modify the modules in response in
an interactive peer review process.
The International Society for Ecological Economics will host the
website, which will likely be mirrored on the Gund site as well. I have draft modules for many topics
that you can improve upon. There
will be due dates for different components of the modules over the course of
the semester. In lieu of any exams,
you will be required to write an editorial relating course topics to current
events, and submit it for publication.
Those students who are published will receive an automatic 100%.
UVM Students will be evaluated based on:
Overall class participation: Coming to class having done the readings and carefully thought about their implications for an ecological economy (10%)
Paper presentations: You will prepare a 15 minute presentation of a paper related to your module topic followed by an additional 15 minutes to discuss the reading (10%)
Discussion points submitted every class : Every week students will submit carefully thought out questions or comments designed to provoke discussion (15%)
Leading class discussion: A couple of times during the semester I will ask you to lead a discussion based on your discussion points (10%)
Editorials: You
will write and submit a 700 word editorial relating course topics to
important real world events
(15%)
Final modules: Following a template that I will provide in by the 3rd week, you will produce a teaching module on one of the course topics (40%)
The courses will be listed separately at
McGill and York, and the professors of record will likely do the grading. I will provide my comments on
participation and presentations, but the McGill and York professors may grade
somewhat differently.
Any breach of the Code of
Academic Integrity will be considered grounds for failure in the course. See:
http://www.uvm.edu/~uvmppg/ppg/student/acadintegrity.pdf. Collaboration on
homework and course projects is required; however everyone is expected to be an
equal partner. Copying or
free-riding on the sweat of others will be considered grounds for individually
failing assignments and/or the class.
Jan. 20 |
Course intro |
Daly, H. E. (1968). On Economics as a Life Science. Journal of Political Economy, 76(3), 392-406 Costanza, R., 1989. What is ecological economics? Ecological Economics 1, 1-7. Faber, M., 2008. How to be an ecological economist. Ecological Economics 66, 1-7. Recommended: Ropke, I.,
2004. The early history of modem ecological economics. Ecological Economics 50, 293-314. | |
Jan. 27 |
Pre-analytic vision and goals |
Costanza, R., Daly, H.E., Bartholomew, J.A., 1991. Goals, agenda, and
policy recommendations for ecological economics, in: Costanza, R.
(Ed.), Ecological Economics: The Science And Management Of
Sustainability. Columbia University Press, New York, pp. 1-20 Daly, H.E., 1992. Allocation, distribution, and scale: towards an economics that is efficient, just, and sustainable. Ecological Economics 6, 185-193. Gowdy, J., & Erickson, J. (2005). The approach of ecological economics. Cambridge Journal of Economics, 29(2), 207-222. Recommended: | |
Feb. 3 |
Resource base and Thermodynamics |
Georgescu-Roegen, N., 1975. Energy and Economic Myths. Southern Economic Journal 41, 347-381 Norgaard, R.B., 2010. Ecosystem services: From eye-opening metaphor to complexity blinder. Ecological Economics 69, 1219-1227. Steffen, W., Grinevald, J., Crutzen, P., McNeill, J., 2011. The Anthropocene: conceptual and historical perspectives. Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences 369, 842-867 Recommended: Hubbert, M.K., 1993. Exponential Growth as a Transient Phenomena in Human History, in: Daly, H., Townsend, K. (Eds.), Valuing the Earth: Economics, Ecology, Ethics. MIT Press, Cambridge, pp. 113-125. Rockstrom, J., et al. 2009. A safe operating space for humanity. Nature 461, 472-475. | |
Feb. 10 |
Human nature |
Rees, W., 2016. Denying Herman Daly: Why Conventional Economics Will
not Embrace the Daly Vision, in: Farley, J., Malghan, D. (Eds.), Beyond
uneconomic growth. Edward Elgar Gintis, H., 2000. Beyond Homo economicus: evidence from experimental economics. Ecological Economics 35, 311-322.
Recommended: Bauman Y, Rose E. Selection or indoctrination: Why do economics students donate less than the rest? Journal of Economic Behavior & Organization. 2011;79(3):318-327 Frank RH, Gilovich T, Regan DT. Does Studying Economics Inhibit Cooperation? Journal of Economic Perspectives. 1993;7(2):159-171 Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E., Gintis, H., McElreath, R., Alvard, M., Barr, A., Ensminger, J., Henrich, N.S., Hill, K., Gil-White, F., Gurven, M., Marlowe, F.W., Patton, J.Q., Tracer, D., 2005. "Economic man" in cross-cultural perspective: Behavioral experiments in 15 small-scale societies. Behavioral and Brain Sciences 28, 795-855. Gowdy, J.M., 2004. Altruism, evolution, and welfare economics. Journal of Economic Behavior & Organization 53, 69-73.
| |
Feb. 17 |
Microeconomics: What is efficiency? |
Stigler, G.J., Becker, G.S., 1977. De Gustibus Non Est Disputandum. The American Economic Review 67, 76-90. (Requires access to JSTOR; also in Dropbox). Farley, J., Schmitt Filho, A., Burke, M.,
Farr, M., 2015. Extending market allocation to ecosystem services:
Moral and practical implications on a full and unequal planet.
Ecological Economics 117, 244-252. Recommended:
Gowdy, J.M., Microeconomic
Theory Old and New: a Student's Guide, Stanford University Press, Stanford,
CA, 2010, Chapters 1-4 | |
Feb. 24 |
Microeconomics: Ômarket failuresÕ |
Farley, J., 2010. Conservation Through the Economics Lens. Environmental Management 45, 26-38. van den Bergh, J.C.J.M., 2010. Externality or sustainability economics? Ecological Economics 69, 2047-2052. Recommended: Farnsworth, E., Tidrick, T.H., Smathers,
W.M., Jorda, C.F., 1983. A synthesis of ecological and economic theory
toward a more complete valuation of tropical moist forests. International Journal of Environmental Studies 21, 11Ð28. (also in Dropbox) Randall, A., 1993. The Problem of Market
Failure, in: Dorfman, R., Dorfman, N. (Eds.), Economics of the
Environment, 3rd ed. . Norton, New York, pp. 144Ð161. | |
Mar. 2 |
Microeconomics: The valuation debate |
Martinez-Alier,
J., Munda, G., O'Neill, J., 1998. Weak comparability of values as a
foundation for ecological economics. Ecological Economics 26, 277-286. Gowdy, J., 1997. The Value of Biodiversity: Markets, Society and Ecosystems. Land Economics, 25-41. Costanza, R., d'Arge, R., Groot, R. d.,
Farber, S., Grasso, M., Hannon, B., . . . Belt, M. v. d. (1997). The
value of the world's ecosystem services and natural capital.
Nature(387), 253-260. Recommended: Spash, C.L., 2008. How much is that ecosystem
in the window? The one with the biodiverse trail. Environmental Values
17, 259-284. Farley, J., 2008. The Role of Prices in Conserving Critical Natural Capital. Conservation Biology 22, 1399-1408. | |
Mar. 16 |
Macroeconomics: goals and measurements; the steady state |
Daly, H.E., "Introduction to the Steady-State Economy," in H.E. Daly (ed.), Economy, Ecology, Ethics: Essays Toward a Steady-State Economy, W.H. Freeman and Co., San Francisco, CA, 1980. Bergh, J. C. J. M. v. d. (2009). "The GDP paradox." Journal of Economic Psychology 30(2): 117-135. Victor, P. (2009). "Living Well: Explorations into the End of Growth." Center for Humans and Nature 5(2). Recommended: Costanza, R., J. Erickson, K. Fligger, A.
Adams, C. Adams, B. Altschuler, S. Balter, B. Fisher, J. Hike, J.
Kelly, T. Kerr, M. McCauley, K. Montone, M. Rauch, K. Schmiedeskamp, D.
Saxton, L. Sparacino, W. Tusinski and L. Williams (2004). "Estimates of
the Genuine Progress Indicator (GPI) for Vermont, Chittenden County and
Burlington, from 1950 to 2000." Ecological Economics 51(1-2): 139-155. Center for the Advancement of the Steady State Economy (CASSE). See articles by Brian Czech, among others. Stiglitz, J. E., A. Sen, J.-P. Fitoussi and et al. (2009). Full report "Report by the Commission on the Measurement of Economic Performance and Social Progress." or Summary Daly, H., 2013. A further critique of growth economics. Ecological Economics 88, 20-24. | |
Mar. 23 |
Macroeconomics: Money, finance and speculation |
Farley, J., Burke, M., Flomenhoft, G., Kelly, B., Murray, D.F., Posner, S., Putnam, M., Scanlan, A., Witham, A., 2013. Monetary and Fiscal Policies for a Finite Planet. Sustainability 5, 2802-2826. Real Economic Review issue 64 - 2 July 2013 4 short articles Lawn, P., 2010. Facilitating the transition to a steady-state economy: Some macroeconomic fundamentals. Ecological Economics 69, 931-936. Recommended:Lietaer, B., Arnsperger, C., Goerner, S., Brunnhuber, S., 2012. Money and Sustainability ÐThe Missing Link. Triarchy Press, Axminster. (executive summary) | |
Mar. 30 |
Macroeconomics: Distribution |
OXFAM, 2016. AN ECONOMY FOR THE 1%: How privilege and power in the economy drive extreme inequality and how this can be stopped, Briefing papers. OXFAM. Piketty, T., 2014. Capital in the 21st century, Harvard University Press. Chapter 16: The Public Debt & Conclusions Recommended: Howarth, R.B. 2011. ÒIntergenerational Justice.Ó In the Oxford Handbook on Climate Change and Society (John S. Dryzek, Richard B. Norgaard, and D. Schlosberg, editors). Oxford: Oxford University Press. CLASS, 2010? Why Inequality Matters, http://classonline.org.uk/docs/Why_Inequality_Matters.pdf. Saez, E., 2013. Striking it Richer: The
Evolution of Top Incomes in the United States (Updated with 2011
estimates), University of California-Berkley working Paper, University
of California, Berkley. Available on-line:
http://emlab.berkeley.edu/~saez/saez-UStopincomes-2011.pdf.
Accessed July 27, 2013. Wilkinson, R., Pickett, K., 2009. The Spirit Level: Why Greater Equality Makes Societies Stronger. Bloomsbury Press, New York. | |
April 6 |
Macroeconomics: International trade and financial contagion |
Minsky, H. P. (1992, May). The financial instability hypothesis. The Jerome Levy Economics Institute of Bard College (Working Paper 74). Pesenti, P. A., & Tille, C. (2000,
September). The economics of currency crises and contagion: An
introduction. Economic Policy Review, 6, (3). Daly, H., Goodland, R., 1994. An ecological-economic assessment of deregulation of international commerce under GATT. Ecological Economics 9, 73-92. Recommended Muradian, R., Martinez-Alier, J., 2001. Trade and the environment: from a ÔSouthernÕ perspective. Ecological Economics 36, 281-297. | |
April 13 |
Policy design |
Chapter 21 in Daly, H. E. and J. Farley (2010). Ecological Economics: Principles and Applications. Washington, DC, Island Press. Fisher, B., Turner, K., Zylstra, M., Brouwer, R., Groot, R.d., Farber, S., Ferraro, P., Green, R., Hadley, D., Harlow, J., Jefferiss, P., Kirkby, C., Morling, P., Mowatt, S., Naidoo, R., Paavola, J., Strassburg, B., Yu, D., Balmford, A., 2008. Ecosystem Services and Economic Theory: Integration for Policy-Relevant Research. Ecological Applications 18, 2050Ð2067. Vatn, A. (2010). "An institutional analysis of payments for environmental services." Ecological Economics 69(6): 1245-1252. Recommended: Costanza, R., F. Andrade, P. Antunes, M. v. d. Belt, D. Boersma, D. F. Boesch, F. Catarino, S. Hanna, K. Limburg, B. Low, M. Molitor, G. Pereira, S. Rayner, R. Santos, J. Wilson and M. Young (1998). "Principles for sustainable governance of the oceans." Science 281(198-199). | |
April 20 |
Policy applications |
| |
April 27 | Future of EE |
Brown, P., 2016. The Unfinished Journey of Ecological
Economics: Toward an Ethic of Ecological Citizenship, in: Farley, J.,
Malghan, D. (Eds.), Beyond uneconomic growth. Edward Elgar, London Spash, C.L., 2013. The shallow or the deep ecological economics movement? Ecological Economics 93, 351-362. Recommended: Spash, C.L., 2012. New foundations for ecological economics. Ecological Economics 77, 36-47. | |
May 4 |
Future of the Planet + Summary and conclusions | I
was originally planning to have people brieflly present their modules,
but on consideration, I thought there may be inadequate time. Instead,
I thought it would be interesting to discuss the biggest threats
currently faced by society, and the potential for ecological economics
to help address them. Costanza, R. 2000. Visions of alternative (unpredictable) futures and their use in policy analysis. Conservation Ecology 4(1): 5. [online] URL: http://www.consecol.org/vol4/iss1/art5/ Randle, M., Eckersley, R., 2015. Public perceptions of future threats to humanity and different societal responses: A cross-national study. Futures 72, 4-16. Recommended: Executive summary of Stuart Armstrong, Future of Humanity Institute, Oxford University, and Dennis Pamlin, Executive Project Manager, Global Risks (2015) 12 Risks that threaten human civilisation. |
[1] Curiously, many conventional economists argue that economics is a positive science, while Ôdesirable endsÕ implies normative goals. They therefore argue that ends need not be desirable per se, and that the economy should try to satisfy individual preferences (weighted by purchasing power) regardless of the desirability of the consequences. However, this libertarian assumption merely defines ÔdesirableÕ as whatever the consumer prefers.