Adapting the Compass to Align with Ecological Economics Thinking

Abstract

We start with the general concepts included in ecological economics thinking. Ecological economists are normative in two respects. There is the scientific norm concerning some dependence relationships in the world and the law of entropy. There is a more ethical norm about the desire to align our life-styles with the dependence relationship and encourage others to share the desire for alignment.

We start with the general concepts included in ecological economics thinking. Ecological economists are normative in two respects. There is the scientific norm concerning some dependence relationships in the world and the law of entropy. There is a more ethical norm about the desire to align our life-styles with the dependence relationship and encourage others to share the desire for alignment.

1 General Concepts of Ecological Economics

We now consider our institution from the perspective of ecological economics. There is some controversy over what is essential and what is dispensable in ecological economics, and I shall not engage the controversy here. Instead, I offer a characterisation. The point is to demonstrate the adaptation of the methodology to the new thinking. This is enough to suggest alternative adaptations in line with alternative conceptions of ecological economics. The conception will influence data collection, classification and normalisation.

Here, ecological economics is thought of as essentially containing five ideas.

• 1. Economics is about the management of resources.

• 2. The monetary economy depends on society and society depends on ecology.

• 3. An ecosystem, a society and an economy can be thought of in terms of health.

• 4. The planetary natural environment is subject to the first two laws of thermodynamics.

• 5. There is a plurality of values that are worth accommodating in our economic thinking.

For some readers each of these is obviously true, for others some are controversial. We address them in turn. The first is slightly different from what one finds in a standard economics textbook, where economics is defined as the allocation of scarce resources. The reason ecological economists prefer the word “management” is that “allocation” suggests immediate distribution, whereas “management” is more amenable to the idea of keeping in reserve.

For the second, we think in terms of three spheres: the econo-sphere, the socio-sphere and the eco-sphere (Friend, 2017, 123). The econo-sphere is contained in, is a subset of, the socio-sphere. The socio-sphere is contained in, is a subset of, the eco-sphere. See Figs. 7.1 and 7.2. The relationship is one of existential dependence. That is, there is no economic activity without society, and there is no society without the natural environment to provide breathable air, potable water, nutritious food and material for shelter and clothing.

Fig. 7.1

Three compasses, one for each sphere

Fig. 7.2

Behind the scenes for an ecological economics compass

The relationship between the three spheres is also one of health. A healthy economy depends on a healthy society,¹ and the health of society depends on the health of the environment. Thus, the figure is meant to be suggestive of three types of relationship between the spheres: mathematical (relative size), existential and one of flourishing or health.

The metaphor of health is taken seriously, and we collect, or develop, indicators of health for the eco-sphere, the socio-sphere and the econo-sphere. It is a metaphor taken from the idea of human health. A human is born, lives for a while and dies. During the human’s life, he, or she, might be healthy, thriving or ill. “Healthy” means being free from disease, resilient against stress – being able to bounce back. “Thriving” means being able to use stress to generate something new, to learn productively, to construct, and affirm oneself even under quite severe stress. “Ill” means succumbing to stress, allowing disease to enter the body and compromise it’s functioning.

Likewise, an economy can be healthy, thriving or ill. A healthy economy can survive some stress. There is some slack and opportunity. A mild economic downturn can be overcome. It is in a steady state. A thriving economy is one where, even under severe stress, such as an economic crisis, economic resources are used to re-construct and re-invent the society. Crisis is used as a propulsive force for innovation and positive change. An ill economy is one where it is impossible, very difficult or takes a long time, to get out of a downward spiral of debt and poverty. An economic crisis turns the economy in this downward spiral.

A society is healthy if it can return to normal after some stress. Social stressors might be mild or extreme. They come in at least four general categories: political (organization, power changes, legal…), educational, human health and security. The following list of stressors might fall into several of the broad categories. Societal stressors include: change of government or government policy, re-drawing of political boundaries, wars, revolution, invasion, occupation by another culture, change in education system, changes in media technology, epidemics, pandemics, significant disparity in health, or longevity, between different social groups, high criminality and violence. These are debatable and worth debating. The list is not meant to be exhaustive or even necessarily correct. What a decision maker decides is worth counting as an indicator of social health will depend in part on a wider philosophical attitude. Discussing what counts as a social stressor is part of the compass construction exercise. The discussion is revealing and explanatory, and therefore becomes part of the justification for policy. It is what makes compasses tailored to regions and cultures, so that suitable and effective policies are developed.

A society is thriving if it changes positively after succumbing to stress, and it is ill if it cannot, and degrades. Moreover, there is a matter of degree. Some societies are healthier than others, and some are healthier in particular respects than others, for example, one society might be able to overcome stress caused by a pandemic more easily than another, but might find another stressor such as cultural invasion more difficult to overcome. Also note that the time scale for social change is usually longer than for economic stress and response.

An ecosystem can be healthy, thriving or ill. The person who developed the concept of ecological health is David Rapport. I’ll quote him directly and suggest some quality interpretations.

Healthy ecosystems are characterized by three fundamental properties: organization, vitality, and resilience. Organization refers to the architecture of the ecosystem, that is, an ecosystem’s characteristic diversity of species (biodiversity) and relationships of species with one another and with the abiotic environment. Vitality refers to the metabolism of the ecosystem, that is, the energy and nutrient flows characteristic of each type of ecosystem. A key measure of vitality is primary productivity, or the amount of plant biomass produced per unit area per unit of time. Resilience refers to the capacity of ecosystems to rebound after natural disturbances such as floods, droughts, or insect infestations. These features characterize all ecosystems, be they natural or human-constructed and maintained (e.g., agroecosystems or urban ecosystems). (Rapport, 2013, 251)

Let us now elaborate the concept to distinguish a healthy ecosystem from a thriving one. A healthy one has good bio-diversity, that is in general equilibrium, or a sort-of steady state, varying with seasons and longer cycles, such as forest fires. The time scale for ecosystems is much longer than for society or the economy. A thriving ecosystem is measured by what Rapport calls vitality. After stress, there will be an increase in biodiversity per unit area and high production of biomass – growth and reproduction, in the same area per same unit of time.

It is possible that there are no longer any thriving ecosystems on Earth since the rate of extinction is 1000 times greater than that of speciation. Thriving ecosystems might be a thing of the past, at least for the foreseeable future.

However, we want to be a little careful here, especially with climate change since it changes the abiotic and geographical boundaries of ecosystems, pushing the boundaries of hot desserts to occupy larger areas, and shrinking cooler ecosystems. Violent weather in any ecosystem causes stress.

It follows that prima facie, some areas of Earth are just too hostile to life to have a thriving ecosystem compared to others: because of temperatures, because of weather conditions, especially rainfall patterns, or because of human activity such as industrial agriculture that compromises biodiversity or when we impose a built-up infrastructure that changes or disrupts the natural flows of water or soil nutrient replenishment. However, secondo facie, it is clear that we could not hope for, or expect, the degree of biodiversity of a tropical rainforest in the arctic tundra. So, for the purposes of detecting and measuring the health of an ecosystem, we decide on a “baseline” relative to that ecosystem and climactic zone. This will be an ecosystem state that has proven to be steady over the long term with its usual cycles. Thus, it would be perfectly appropriate to decide that in Europe the biodiversity found before the use of artificial or imported fertilisers constitutes the baseline, and this is healthy, that is, we could count traditional agriculture is part of a healthy ecosystem. We could be more radical and insist that the baseline is how Europe was before agriculture was practiced. Or we could be quite complicit and accept industrial agriculture as “normal”, and count that as what we mean by a healthy eco-system. Therefore, the concept of health of an ecosystem is relative to a baseline, and this has to be debated and decided upon. Whatever the decision, what we are after is some stability. A dying eco-system is not healthy. The decision will inform our conception of “sustainability”. See Sect. 7.4.

A healthy ecosystem, then, is one that can recover from some stress, be it natural or manmade. A thriving one can recover from much greater stress, and an ill ecosystem cannot fully recover. It will change irreparably. Overfishing, pollution and human urban development decreases the expanse of healthy ecosystems. Climate change will increase the size of ill ones. Violent weather destroys human infrastructures allowing nature to step in, but it also destroys plants and animals and stresses ecosystems.

The loss of ecosystem health, or ecosystem pathology, is signalled by substantial changes in one or more of these fundamental aspects [organization, vitality and resilience]. Ecosystems under stress show highly similar patterns, which have been described in terms of “ecosystem distress syndrome.” Generally, organization is compromised and biodiversity is lost. Productivity of terrestrial ecosystems tends to decline, as nutrient cycling becomes less efficient and nutrients are leached out of the system. Aquatic ecosystems tend to become nutrient-enriched, and thus, initially, productivity rises. But in this case, the [short-term] increase in productivity is a sign of [long-term] ecosystem degradation, as the nutrients fuel excessive algal blooms, and the ecosystem becomes clogged with the growth of reeds, macrophytes, and other aquatic plants that would normally be kept in check. Ecosystems under repeated episodes of stress tend to lose resilience, taking a longer time to recover or achieving less complete recovery. (Rapport, 2013, 252)

When an ecosystem collapses, nature comes back but in a different and less healthy form. It is then philosophically appropriate to shift the baseline. However, we should be aware that this is what we are doing since after an ecosystem collapses, some species are lost, invasive species increase, larger species disappear or are reduced in number and there is more disease. This is a downward spiral in health in absolute terms, although some new stability should emerge. The reason we should be reluctant to shift our baseline to accommodate degradation and the downward spiral is that if many ecosystems collapse around the same time, then the global effect is compounded since the invading other species are also coming from a collapsed, or collapsing, ecosystem. Deciding on the baseline is a normative exercise. It sets a norm to which indicators and a final compass reading are responsible. The norm includes a concept of sustainability – to sustain a healthy ecosystem or a rate of degradation.

Costanza (1992) couples the baseline with sustainability in this way: “ecosystem health is closely linked to the idea of sustainability, which is seen to be a comprehensive, multi-scale, dynamic measure of system resilience, organization, and vigor [“vitality” for Rapport].” Here, sustainability is not meant in the sense of human/social weak sustainability but it [is] thought of in terms of an ecosystem. For Mageau et al. (1995) a healthy, sustainable, ecosystem “has the ability to maintain its structure and function over time in the face of [some] external stress.” The important thing to note for the compass is to decide on indicators of resilience, organisation, vitality, structure, function and external stress.

Now comes a normative claim, worth discussing and debating:

• Claim 15: (made by some ecological economists): The health of the economy depends on the health of society, and the health of society depends on the health of the ecosystem.

The normative stance of ecological economists, is that as a species, we can live well in the world if we adhere to certain norms that respect the “natural” (or baseline) flows of air, water, soil nutrient cycles and life-cycles. We then criticise institutions on the basis of the extent to which they align with, or deviate from, that norm – what it is to live ‘normally’ in the context of the natural systems that sustain us. We should make policies that bring us towards living within the natural flows, and prevent us from depleting our fund of low entropy – the non-renewable resources: oil, coal and gas. That is: indicators of resilience, organisation, vitality, structure, function and external stress are all used to measure the health of an ecosystem. An important key to recognising these is the second law of thermodynamics: the law of entropy. High biodiversity and vitality indicate low entropy, that is, a high level of order and organisation. Desserts, tundra and urban environments show low entropy, more chaos, less life and less organisation.

The norm sought by ecological economists is to align our lifestyles in such a way as to respect ecosystem health, where we can simplify this notion by thinking in terms of entropy. Sustainability consists in using up our fund of low entropy at as low a rate as possible, or at least one that stays within the bounds of what it is that nature can absorb and handle without suffering eco-system collapse. We should wean ourselves from using up our fund of low entropy: oil, coal, gas, uranium and plutonium.

The rate at which we wean ourselves and approach sustainability within the natural flows is culturally sensitive. There is a plurality of values. We value success in society, the ability to purchase material goods, the ability to afford luxurious goods, but we also value, family, friendship, cultural identity and our ability to live well in concordance with nature. We value nature for its own sake. It is a good in and of itself. These values should not be ignored in our economic thinking, where economics is about “the management of resources”. Let us add that scarce resources depend on abundant resources so as humans we should manage our resources, and this includes leaving a lot of nature alone, so that it has the capacity to absorb our waste, to act as a buffer for disease (Quammen, 2012), to just intrinsically exist and be there for its own sake, so that we live with nature, appreciate it, learn from it, and not try to insulate ourselves from it.

To negotiate this plurality of values, we decide on a culturally acceptable rate of entropy production, pollution, disruption of flows and biodiversity loss (Mayumi, 2001, 45). That is, the normative stance of the ecological economist is a partly scientific and partly philosophical conception concerning our rate of deviance from how we can live ‘normally’ and sustainably on our planet. We would use this as the basis for a definition of what it is to live acceptably, with a view to increasing sustainability. The scientific idea is that insofar as we do not live sustainably, we shorten our time on Earth, or we compromise the quality of our time on earth because we shall see shorter life-spans, more human disease, psychological problems, political conflict over resources and so on.

The ideologically normative conception is more radical and is one step of generality up. We would like the human species to continue for a long time, and in some comfort with nature. We consciously endorse the above normative stance as a matter of moral principle. That is, we take an explicitly ideological stance, and encourage other humans to work towards living within the boundaries set by the conception of strong sustainability. In other words, instead of simply observing and describing the amount of deviance from the norm, we also think that we ought morally to try our very best to stay within the norm and encourage others to do likewise – as ideological, moral agents in our own right. So not only does the pluralism of values mean that we recognise people will have different values, we also recognise our own, and deliberately include them in the mix (table), and in our policy recommendations.

When we adapt the compass construction to align with the normative stance; strictly speaking, the ideological norm is separate. It does not affect the compass construction, only the wish compass and the analysis at the end, where we make policy recommendations .

2 Data Analysis for an Ecological Economics Institutional Compass

To align with the norm, we make a more elaborate compass construction, that starts with an addition to the analysis of data. We classify it not only in terms of the qualities but also in terms of whether it belongs to the ecology, society or the economy.

• Step 3b: Classify data in terms of whether it is economic data, social data or ecological data.

We might find that we need more data. Often when making a generic compass we miss out ecological data or social data. The reason for the classification is that we are going to make tables and institutional compasses for each sphere separately: one representing the relationship of the institution with the economy, one for the relationship of the institution to the society and one representing the relationship of the institution to the natural environment. We now have nine sectors, three in each of three spheres. See Tables 7.1, 7.2 and 7.3.

Table 7.1 Table for the econo-sphere

Table 7.2 Table for the socio-sphere

Table 7.3 Table for the eco-sphere

Each table has its own values. Start with the economy table since it is the most familiar. Economic value, is value in exchange . The time-frame is short, since exchange value changes quickly. For the economic-sphere, you put on your neo-classical hat, you are now a businessman. The primary purpose of your business is to make a profit.

How do we make the quality classification concerning the econo-sphere? Harmony is indicated by fixed fees or prices, the steadiness of wages, low or no inflation, not much disparity between rich and poor within an institution, or with respect to others outside the institution, long-term employment (or confidence of being easily re-employed), market stability, stability in taxes. Excitement is indicated by money spent on leisure and luxury, expensive tours or luxury goods. Investment also belongs to excitement since it is risky and brings new opportunities, especially foreign investment, big financial projects, one-time investment in security or the military – anything that makes revenue jump or fluctuate. Discipline is indicated by poverty, bankruptcy, debt, loss of capital, big financial projects not making a return on investment. On the edge of discipline towards excitement we might find the monetary wealth gained from so-called “toxic debts”. On the edge of discipline, but close to harmony are numbers of credit card debts that are regularly paid within the month – debts that are quickly paid back, so successfully managed debts.

Social value of an object, or institution is value in use . If an institution is used it is valued because it brings health, education, culture, comfort, familiarity, security and so on. The time-frame is longer than for the economic compass. For the socio-sphere think of health, education and security. We decide on base-lines, and these determine the length of arrows.

Harmony for health is then when infant mortality is low, childhood diseases are under control, for example, if enough children are vaccinated as to only “allow” a “normal” number of deaths or suffering from the disease. People live to a “normal” age, people who are ill or who have disabilities are looked after, healthy diet and preventive care. Discipline for health is ill health: disease, death, suffering and mental problems. Excitement for health concerns important medical interventions, new medical techniques, medical machines/technological compensators such as wheel-chairs, or devices to teach deaf people to speak, eradication of a disease, technological health enhancements.

In education and culture, harmony is indicated by young children going to public school. Literacy and numeracy are high, family relations are good, there is good interaction between people of different cultures and religions. People are informed. There is healthy debate, and people care for each other. Discipline is indicated when children or teenagers drop out of school, fail classes, there is distrust between cultures or a fear of other cultures, loss of a language or way of life, child labour or slavery. Excitement is indicated by international awards, art, museums, festivals and tourism.

Security is in harmony when there is low petty crime, people ‘feel’ safe at night, there are effective barriers and constructions to prevent accidents. Security is in the sector of discipline when there is violence and fear of violence, riots and wars. Security is in excitement when we have new safety standards or devices – as they become accepted and normalised, the arrow will shift into harmony. Security in excitement would also include self-defence classes and night-watch organisations. They are not in harmony because they are a reaction to fear.

Environmental value is intrinsic or existential value. The time-frame is long. For the ecological-sphere we have to decide on a baseline, as described in (Rapport & Maffi, 2010). The ideal baseline would be nature without humans, but this is unrealistic given the enormous human population on Earth. In a region which has been inhabited by humans for a long time, the baseline will be nature with humans as it was, say, before the population explosion and the green revolution to industrial agriculture. We look at the baseline from the point of view of nature, not of humans. Put on your domestic animal, family crops, algae, tree and beetle hat. That is, view the world from the point of view of a tree, squirrel, some plankton, an exotic fish… In particular, we are interested in the quality and naturalness of flows of heat, soil nutrients, air and water. We are also interested in biodiversity, eco-system health indicators (Jorgensen et al., 2010) and the use by humans of non-renewed resources and human waste. The people to ask about this are: biologists, ecologists, bird watchers, indigenous people, farmers, miners, hunters and so on. Areas that are in the baseline state are what are counted as harmonious, i.e., if there is a lot of such territory then this makes a longer arrow in that sector. The ecology is stable.

When we kill off species or eco-systems, cover soil with cement, or prevent growth of plants, insects, birds with synthetic pesticides, when we engage in mass deforestation, flooding to build a dam, when there is soil erosion, this is all part of discipline. Natural disasters also count except insofar as they are part of the baseline cycles.

When man encroaches and “improves” nature, especially in the direction of the agricultural green revolution or controls species and reproduction, this is excitement: GMO crops, large agricultural projects, organised tree plantations, irrigation, water treatment plants, fish farming… are all in the realm of excitement.

We have to be careful with the excitement quality in the ecosystem because it can easily tip an ecosystem into discipline. This is why maintaining or managing, say agricultural land, takes much more effort (entropy production) and is more delicate than “managing” a relatively wild forest area. Remember that the timeframe is long. Forest fires, floods, earthquakes, devastating contagious disease of plants and animals are also counted as discipline. But we should be careful. If there is a forest fire in keeping with the baseline cycles, then as it happens and shortly after, this indicator is in discipline, but the indicator might shift to harmony as nature recovers and inhabits the space again in a healthy way, showing resilience and vitality. So, we should note that indicators can shift from one general quality to another.

For the purposes of ecological economics, we make the following general recommendations for the indicators in all the tables. Consider that we live in a world subject to at least the first two laws of thermodynamics, so some indicators have got to reflect the entropy production of the institution; that the planet we live on is limited in space and resources, so when we use up the natural space, there is a debt to pay. The general idea is to follow Georgescu-Roegen (1971) and think in terms of the fund-flow model of the natural environment. We have a fund of low entropy that we can use up quickly or more slowly. This includes non-renewable (or too slowly renewed) resources: coal, oil, gas, uranium. To stay within the norm of human life on Earth, we want to use these up as slowly as possible – aiming towards the rate of replacement, although we know that it might be impossible to achieve the use of slowly replaced resources at or below the rate of replacement on pain of social unrest. There will be more said on this in a moment. Following Georgescu-Roegen again, we note that there is a flow of heat to the Earth from the sun and dissipation of heat from the Earth into space. Within this flow (over which we have influence through the emission of greenhouse gasses) we respect the rate at which natural resources such as: food, fibre, wood, replenish themselves naturally.

Another important sort of indicator comes from the thought that some of our practices have harmful and irreversible consequences on the natural environment. Here we use the metaphor of health of an organism and with some changes in the metaphor, apply it to whole eco-systems. Rapport (2012) has developed a number of these indicators. Most of them concern natural ecosystems that are stressed by human activity in the form of pollution.

So, the third, related, general idea is to think in terms of pollution, waste and clean-up. Once pollution has been released into the environment it starts to stress the natural eco-systems. There are limits beyond which the natural systems cannot cope and they become ‘unhealthy’ or ‘collapse’. What replaces them is a less healthy natural eco-system (Rapport and Maffi, 2010). Some pollutants are dispersed quickly and others slowly, the effect of mixes between them is rarely known. The rates of dispersal should be respected and we should monitor the health of eco-systems to warn us of natural limits, in the case of accumulation or mixing of pollutants. Thus, the statistics falling under these three general ideas are what we use to find the relevant statistics for the eco-sphere .

To serve the ideological and moral ideas of ecological economics, of respecting the natural environment, we should like as many of our institutions as possible to be in the sector of harmony. That is, the wish spot is in harmony for the ecological economist. If we want to remain ideologically neutral, then we either consult the mandate of the institution to determine their ideology, and we ask members of the institution to choose their wish spot. Note that the same person might expect different qualities for different institutions.

3 The Mathematics for Constructing an Ecological Economics Institutional Compass

Regardless of the ideological orientation, we want to accommodate the descriptive part of ecological economics, the dependence relation represented by the sub-set relationship of the three spheres. We think that the environment has to be given priority over society, and the latter has priority over monetary economic considerations. This will now be represented by the relative sizes of the compasses, representing the three tables. For each table draw a sphere compass following steps 8–15. See Fig. 7.1.²

• Step 14b: We place the compasses concentrically in the following proportions: the radius of the ecological compass is the longest. The radius of the economics compass is half the length of the ecological compass, and the length of the radius of the social compass is exactly half way between the two. See Fig. 7.2.³

The relative length of the radii of the three circles reflects how much more important we think, for example, ecology is with respect to society. To fend from confusion, remember that in the length of the indicator arrows on the tables is given as a proportion of the length of the radius of that circle. The corrected length is the length of each indicator arrow divided by the number of not-crossed out indicators in that sector. Thus, the calculations ensure that the ecological arrow has more influence in the final compass than the other two. As policy makers who share the worldview of ecological economists: look after the natural environment first, then look after society, and lastly look after the economy. We aggregate the three final arrows for the compasses by simple vector addition, as in step 8 (ignoring the sector demarcations).

• Step 16: We draw our three ‘final’ sphere arrows, head to tail as in step 8 with the first one’s tail starting at the centre of the circle.

• Step 17: Erase the circumference of the social compass and the economics compass. Return to the general qualities. See Fig. 7.3.

• Step 18: Add the three ‘final’ sphere arrows tail to head, and draw an arrow from the centre of the circle to the head of the last arrow. See Fig. 7.4.

Why do we do a simple vector addition here, rather than draw a triangle as in step 10? Because here we are aggregating three spheres, not tying three sectors. The method that we used to find the centre of the triangle in step 10 represents the average of the points in the triangle. We wanted to aggregate the three sectors, see which is pulling the most, and in what direction. Here, we aggregate final arrows of spheres , not sector arrows. So, we respect sphere arrows and leave them alone.

• Step 19: Erase the sphere arrows. This is the final arrow for the institution, from the perspective of ecological economics. See Fig. 7.5.

This compass is constructed using the conceptual normative thinking behind ecological economics. If the environment is doing well, then we need not take care of it, and we can concentrate on society or the economy or both. Because the ecological compass arrows are more influential over the position and length of the final arrow, it is the statistics concerning the environment that we will heed most in our policy decisions – unless the ecology is doing well. In our particular example of Fig. 7.1 the socio-sphere is doing “well”, since it points where many of us would like to have the wish spot. As policy makers we would then concentrate on promoting the socio-sphere harmony data and discouraging the eco-sphere and econo-sphere discipline data.

Fig. 7.3

An ecological economics institutional compass, re-introducing the qualities

Fig. 7.4

Vector addition of arrows from the three spheres

Fig. 7.5

Final arrow for an ecological economics institutional compass

We are now in a position to make an analysis as per Sect. 5.6. We can then make policy recommendations. We use the recommendations to begin wider debate and include “non-experts” as in Sect. 5.6.1.

We turn to the delicate matters of ideology and sustainability.

4 Sustainability and the Ecological Economics Institutional Compass

It is politically in vogue to claim that an institution is “sustainable”. Such a claim is almost empty when we consider the number of different definitions we might have for the word “sustainable”. An industry might be deemed “unsustainable” just because it is not financially solvent; or we might be concerned with sustaining a certain standard of living; or we might be concerned with the stability of an ecological system. The word “sustainability” was used to refer to the natural environment, but has been appropriated by business and government because of the new, fashionable and strongly positive connotation. Since it is a vague term, it is subject to many interpretations. Since it is a positive term, its meaning is seldom made explicit by business or government, because most people agree. The problem is that they are agreeing to very different things if they have a different definition of “sustainability”.

Ecological economists use the word in the older sense. This is to reflect the scientifically established reality of how it is that the environment is doing, and to acknowledge our dependence on that environment. For humans to live sustainably, we have to ensure that the eco-sphere is stable and not collapsing. It is only if the health of the eco-sphere is sustained, that we can think of sustaining society (within the bounds and context of the natural environment). This is recognised to be important for government, other public institutions, many non-profit organisations and many NGOs (non-governmental organisations); but, at least for the ecological economist, government ought to take very seriously the natural environment in which, and from which, the society lives. Furthermore, economic activity should not be “sustained” at the “cost” of society because there is the very real risk of social break-down. Thus, an ethical component is included in the notion of sustainability for the ecological economist. Similarly, a business institution which claims sustainability in the ecological economist’s sense would take seriously both the social aspects internal to the institution and the external aspects: the society in which it is couched and the natural environment it affects. Thus, I put forward the claim that

• Claim 16: For the ecological economist, an institution is sustainable if and only if the ecological-economics institutional compass’s final arrow is in the harmony sector. Degree of sustainability is shown by the length of the arrow. The longer the arrow the more sustainable and the more resilient the institution.

‘Sustainability’ is here taken to set an ethical and normative standard – an ideology – reflecting what it is we want to sustain and what we are willing to sacrifice. Under ethical-normativity, we want the natural environment to remain relatively stable. In very basic terms we need to ensure that water, the air and the soil are natural and harmonious. It is only then that the bio-sphere can continue in a healthy manner. How do we know we are living sustainably?

We all know that increasing entropy damages the environment, and therefore, entropy production is one of the obvious choices for representing discipline with respect to the environment. Another environmental discipline indicator is pollution. Insofar as we are willing to sacrifice the environment to our social, material or economic ambitions, we think less and less in alignment with ecological economists. Let us be quite clear. There is the scientific aspect of ecological economics and the more normative, ethical and ideological aspect. It is this distinction that has been drawn out in the exercise of constructing our ecological-economic institutional compass.