Green economics loosely defines a theory of economics by which an economy is considered to be component of the ecosystem in which it resides. A wholistic approch to the subject is typical, such that economic ideas are commingled with any number of other subjects, depending on the particular theorist. Proponents of feminism, postmodernism, the ecology movement, peace movement, Green Political movements[?], green anarchism and the anti-globalization movement have used the term to describe very different ideas. Accordingly, green economics has been viewed as external to mainstream economics, although there are varing degrees of diffusion and debate on what are the points of contention. It is thus preferrable to refer to a loose school of "green economists" rather than any single "green economics".
Neoclassical economics represents the main body of modern economics. Neoclassical economists begin with a strict set of assumptions that enable a mathematical treatment of the subject. An unintended consequence of the normal assumptions is to exclude the evolution of a system, including moral or inherited and evolving preferences from analysis. Due to these exclusions, neo-classical economics is almost antithetical to life. The greens are often confused both with political Greens and with advocates of "more mainstream" environmental economics that does not question the neoclassical political economy of global market capitalism - and heavily exploits the neoclassical methods in its subfields environmental finance, Natural Capitalism, measuring well-being and sustainable development.
The green economists share broader ecological and social concerns with capitalism itself. - and seek a new political economy entirely, with one commonly shared objective being to reform instruments of money supply, aligning inflation rates (which set the value of money itself) to ecological and social criteria to overcome "the three deficits: environment, social, and financial."
Various subgroups of these economists avoid the label green or Green in part to avoid association with political Green Parties and their broader goals. Often these use the older terms environmental economics or resource economics which emphasized the now-mainstream goal of economic sustainability and treating so-called "natural resources" as full "natural capital".
This article covers those who have extended this analysis or reject measures of global "sustainability" - few of whom now use the older terms or accept Natural Capitalism. Those who focus clearly and only on sustainability are a distinct group concerned with environmental finance - the use of financial instruments to set up incentives to save ecology, especially endangered species or fragile ecoregions.
What differentiates all green from labor economists[?] is the insistence on treating natural living systems, including the human body, as factors of production, and clearly differentiating these from any non-living factors. A common characterization is that greens distinguish "factors from actors":
Indeed, what seems to define green economists most clearly is the rejection of all analyses of factors of production or means of production that fail to clearly and fundamentally distinguish between living (nature, persons)and non-living (financial, social, instructional, infrastructural) roles in a productive process. Some have detailed critiques of "Fordism[?]" (after Henry Ford) and "productivism", as best developed by Alain Lipietz of the French Greens[?]. They characterize the belief in such concepts as "economic growth" as a delusion, an ideology, and worse, as they disrupt and destroy ecological growth[?] in life support capacity of a natural ecosystem: air and water filtering, food production, fiber growth. These often characterize their work as "social ecology" and may employ the Marxist analysis of means of production.
However, there is an equally-strong strain of "right greens" who emphasize the role of tax, trade, and tariff laws in encouraging destructive behavior - they often characterize "dirty subsidy" or "dirty money[?]" as the problem - and seek to change banking rather than social values.
Three assumptions that seem to be universal among green economists: First, that living ecoregions are better valued as service-producing natural capital than as passive natural resources. Second, that creative "enterprise" or individual capital must be differentiated from more general ideas or analyses of human capital or human resources, as what characterizes both evolution and intelligence is an unpredictable and creative movement towards greater energy economy, e.g. a tree spans a volume so as to most effectively convert available light to energy using its leaves. Third, that local measurements are almost always better than global ones, and scale of measures must match the scale of the commons being managed.
Of these, the third is the most oldest, and was first codified clearly in E. F. Schumacher[?]'s "Small is Beautiful". It emphasized the value of a local point of view, like that of gardening, that would require "use-value" or "service value[?]" to be assessed in context of a living ecoregion or economic process, and would de-emphasize the value of resource, commodity or product measures. In addition many de-emphasize protest, notably Brian Milani[?] who has contributed significantly to a green micro-economics, e.g. of eco-villages, and notes that "efforts to encourage nature appreciation[?] and environmental protection[?] often reinforce the chasm between the human economy and non-human nature."
He argues that "The environmental movement in particular should put more emphasis on establishing an educational network that both formalizes its educational tasks and systemizes connections with the rest of the community. But this, of course, assumes that the environmental movement becomes more aware of, and proactive about, economic alternatives."
This bottom-up approach seems to mirror that which successfully promoted the emotionalist moral philosophy[?] of Adam Smith and the classical economists[?], "that eventually caused fundamental changes in politics, culture, religion, and conceptions of human nature." A revolution not of politicians and theorists, but of gardeners, shop-keepers, and purchasers.
At the other scale extreme is the view of Goldsmith[?], that scientific understanding of human bodies, cognition, and Earth's ecology, constitutes "a single order" and "a single set of laws, whose generalities apply equally well to biological organisms, vernacular societies and ecosystems and to Gaia herself." Such views seem to inspire the Global Greens who believe that centralized measurements can perhaps be reformed, in line with a general ethic that emphasizes "Earth First" (the name of one influential NGO) and social and economic measurements as only secondary.
This "recognition that economy is nested within society which is nested within ecology, and that ecological flows (e.g. watersheds, air flows, gene flows) determine political power and bodily service relationships" is seen as pivotal by other greens who see The Enlightenment as being over, and a new movement, The Embodiment[?], replacing it on a cultural level.
This is a common theme among Greens in general, who have a broad critique of dominator culture and monoculture which has flowered in the anti-globalization movement to unite with other critics of global capitalism.
Some, following systems biology, differentiate "between Plant (energy-binding), Animal (space-binding), Human (time-binding) and Truth-binding mechanisms" among which they variously count religion, banking, capitalism and economics itself. Whether greens will ever agree on a single "truth-binding" political economy remains a matter of controversy.
As of today, there is as yet no clear agreement even on basic terms of reference; Difficulty of measuring diverse "ecological flows" makes the field also diverse; It is generally impossible to distinguish green economists, ecology theorists and systems theorists, as the green analysis deliberately uses metaphors from natural capital to describe or design infrastructural capital, i.e. employing biomimicry in the broadest sense. A good summary of attitudes is that of Lynn Margulis who holds that ethics, economics, and biology are indistinguishable, and that all three apply to any study of ecology: "economists study the way that humans make a living, and biologists study have all other species make a living".
She also questions certain tenets of biology incompatible with ecology: Darwinian evolution[?] "is totally wrong. It's wrong like infectious medicine was wrong before Pasteur. It's wrong like phrenology is wrong. Every major tenet of it is wrong," she says, in Kevin Kelly[?]'s book "Out of Control : The New Biology of Machines, Social Systems and the Economic World".
Green economists vary drastically in how much they question conventional biology and ethics, how reliant they are on cognitive science as a neutral point of view for their micro-economics of human purchasing. Most however are committed to "moral purchasing" regimes that generally deny the value of nation-states or corporations to diffuse responsibility for moral harms done by one's consumption and purchase habits.
One holy grail of green economists is a theory of why humans see value in such commodities as gold, and why they habitually reward social and sexual fitness (i.e. appearances) strongly over ecological fitness (i.e. energy efficiency, survival) whenever they have the luxury to build complex financial systems. This parallels and opposes the ambition of neoclassical economics to find parallels in radically autonomous physics and chemistry - but the two views are complementary, and come together in such doctrines as Natural Capitalism, which seems to reflect both green and neoclassical constraints.
A less ambitious field is environmental finance which seeks to justify biodiversity directly as a unit of stored value[?], e.g. a rainforest standard[?] replace the gold standard. Some refer to this as a "biosecurity standard" or "biosafety standard" of value, but these are not yet common usage - instead a broad strategy of using conventional financial instruments to save ecology deemed unique or irreplaceable has developed, without any agreement on any one standard of biodiversity's value.
However, some of these ambitions parallel and oppose the ambition of labor economics[?], the United Religions Initiative, generic global ethics[?] and humanism to place an infinitely high value on human life - and thus, as the greens see it, a constantly-decreasing value on other life.
Indeed, a dramatic fact highlighted by the IPCC is that a human life in developed nations is valued 15x higher than in the developing nations - measured strictly in terms of ability to pay to prevent global climate change. Most political Greens reject such an analysis as hopelessly unsustainable given modern terrorism and asymmetric warfare, but what seems to characterize green economists as a class is a willingness to work with such outrageous commodifying assumptions.
In effect, humans cannot be treated differently than Great Apes or whales or any other keystone species, for the green analysis to have integrity. As with other species, society must then set a finite value on what it will do to avoid losing a human life. Otherwise, humans seeking survival at all costs in ever-growing numbers must ultimate overcome sustainability on all levels and cannibalize the Earth's natural capital into "resources". This constraint of "sustainability" has become important to other economists who seem unwilling or unable to deal with limits it imposes.
Important economists and systems theorists who have contributed analyses to the body of green economics include E. F. Schumacher[?], Robert Costanza[?], Lynn Margulis, David Korten, Buckminster Fuller, Herman Daly[?], Donella Meadows, Paul Hawken, Amory Lovins, Hunter Lovins[?], Brian Milani[?], Marilyn Waring[?], Jane Jacobs, Robin Hanson[?] and Amartya Sen. Some of these are more associated with anarchism or libertarianism but any green theory generally favors all "local measures" over "global measures", so the affinity is inevitable. Local measurement of ecological conditions and integrity replacing trust in centralized institutions (such as the IMF, World Bank, WTO, BIS, WIPO or UN) is a key green theme.
There are also a significant number of ethicists, scientists (particularly linguists and complexity theorists), political scientists, postmodernists and journalists whose work has contributed to a broad green political economy. This would include Edward O. Wilson, George Lakoff, Rushworth Kidder[?], Peter Singer, Alain Lipietz, Amos Tversky, Daniel Kahneman, Jean Baudrillard, Carol Moore, Liane Gabora, Richard Thaler[?], Robert Mundell, and others whose behavioral finance, cognitive psychology, cognitive science and chaos theory have helped to trace out the limits of predictable process.
Robin Hahnel[?] and Michael Albert[?] have attempted to define a restricted, purely economic model which does not contain any mechanisms for dealing with ecological issues, but are hopeful that others may extend the model to deal with ecological issues. A debate attempting to clarify how this model, the participatory economics model, relates to the "social ecology" model, is linked below.