Steady-State Economics: A New Paradigm

HOW IS THE ECONOMY related to its environment, the ecosystem? The economy, in its physical dimensions, is a subsystem of the earth ecosystem. The ecosystem is finite, nongrowing, and closed. A closed system is one in which matter neither enters nor exits but in which energy does enter and exit. In the earth ecosystem solar energy enters and exits, and it is this throughput of energy that powers the material biogeochemical cycles on which life depends. Within this earth ecosystem the economy exists as an open subsystem. This means that both matter and energy enter from the larger system, and that both matter and energy exit back to the larger system. All physical processes of life and production are maintained by this metabolic flow-through (throughput) of matter-energy from and back to the environment. The economy lives off the environment in the same way that an animal does-by taking in useful (low-entropy) raw material and energy, and giving back waste (high-entropy) material and energy. The rest of the ecosystem, the part that is not within the economic subsystem (in other words, natural capital), absorbs the emitted wastes and, through biogeochemical cycles powered by the sun, reconstitutes much of the waste into reusable raw materials (see fig. la). As the economic subsystem expands in its physical dimensions it assimilates into itself a larger and larger proportion of the total matter-energy of the earth ecosystem. More and more of total life