Challenges in Sustainability

1. Home
2. Vol 2, Issue 1 (2014)
3. Farley
4. Full Text HTML

Challenges in Sustainability | 2014 | Volume 2 | Issue 1 | Pages 1‒17

DOI: 10.12924/cis2014.02010001

Research Article

Seeking Consilience for Sustainability Science: Physical

Sciences, Life Sciences, and the New Economics

Joshua Farley

Department of Community Development and Applied Economics, University of Vermont, 205 B Morrill Hall,

Burlington, VT 05405, USA; E-Mail: jfarley[email protected]; Tel.: +1 8026562989; Fax: +1 8026561423

Submitted: 29 January 2013 | In revised form: 10 April 2014 | Accepted: 11 April 2014 |

Published: 5 May 2014

Abstract: The human system, driven largely by economic decisions, has profoundly affected

planetary ecosystems as well as the energy supplies and natural resources essential to

economic production. The challenge of sustainability is to understand and manage the complex

interactions between human systems and the rest of nature. This conceptual article makes the

case that meeting this challenge requires consilience between the natural sciences, social

sciences and humanities, which is to say that their basic assumptions must be mutually

reinforcing and consistent. This article reviews the extent to which economics is pursuing

consilience with the sciences of human behavior, physics and ecology, and the impact full

consilience would have on the field. The science of human behavior would force economists to

redefine what is desirable, while physics and ecology redefine what is possible. The challenges

posed by ecological degradation can be modeled as prisoner's dilemmas, best solved through

cooperation, not competition. Fortunately, science reveals that humans may be among the most

cooperative of all species. While much of the mainstream economic theory that still dominates

academic and the policy discourse continues to ignore important findings from other sciences,

several sub-fields of economics have made impressive strides towards consilience in recent

decades, and these are likely to change mainstream theory eventually. The question is whether

these changes can proceed rapidly enough to solve the most serious problems we currently

face.

Keywords: anthropocene; cooperation; human behavior; interdisciplinarity

1. Introduction

Human impacts on the planet are now on the scale of

geological forces, to the extent that the current era is

increasingly referred to as the anthropocene [1].

These impacts threaten to exceed planetary bound-

aries, risking catastrophic impacts on humans and the

rest of nature [2]. If we hope to meet fundamental

© 2014 by the authors; licensee Librello, Switzerland. This open access article was published

under a Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0/).

human needs in the near term without destroying

planetary life support functions required by all species,

we can no longer separate the study of human systems

and natural systems, but must instead adopt a

transdisiplinary, holistic approach to science that "seeks

to understand the fundamental character of inter-

actions between nature and society. Such an under-

standing must encompass the interaction of global

processes with the ecological and social characteristics

of particular places and sectors." ([3] p. 641) Earth

Systems Science [4] and Sustainability Science [3]

exemplify this approach.

The steady accumulation of human knowledge has

made it impossible for any individual to be an expert in

all areas of study. Scientific progress therefore has

relied on increasing specialization in narrow areas, as

exemplified by the study of individual disciplines within

the universities. This specialization has resulted in

impressive advances, but it has also created barriers

between fields of knowledge. These barriers are not

only serious obstacles to the advance of sustainability

science, but also can lead individual disciplines to build

on beliefs or assumptions that contradict those of other

disciplines. Even if specialization is necessary, it is es-

sential that facts and theories within a discipline are

internally consistent, and the facts, theories and

inductions from one discipline do not fundamentally

contradict those from another. In particular, "when

different disciplines focus on the same object of know-

ledge, their models must be mutually reinforcing and

consistent where they overlap" ([5] p. 4). When there

is disagreement, it should be settled with empirical

tests, experiments and observations to lend support to

one hypothesis over another, and not simply ignored.

This is very much the case in the natural sciences.

Theories in cell biology do not contradict theories in

evolutionary biology, and both are consistent with the

theories of chemistry and physics. Even when facts and

theories may seem to contradict each other, as in the

case of quantum theory and the theory of relativity,

physicists pay close attention to the contradictions, and

assume that they will eventually discover basic physical

laws that resolve them. This type of agreement across

fields and disciplines is known as consilience [6].

Sustainability science demands consilience as an

explicit objective.

Consilience is far less advanced in the social sciences

than the natural sciences [7]. Facts, theories and

inductions from one social science not only frequently

contradict those from another, but also frequently

contradict the natural sciences. The most important

example of this in the context of sustainability science

may be in the discipline of economics for two main

reasons. First, economic activity—defined as the

transformation by humans of raw materials and energy

into goods and services intended to satisfy human

wants and needs—is the central cause of the most

serious sustainability challenges that human society

currently faces: global climate change, biodiversity loss,

land use change, ocean acidification, ozone depletion,

waste emissions in excess of the planet's absorption

capacity, and excessive dependence on rapidly dimin-

ishing stocks of fossil fuels. Second, economics

arguably has the most influence of any social science

on policy decisions. This article will focus on consilience

in mainstream economics, which has the greatest

impact on policy decisions, and hence the greatest

influence on sustainability.

Consilience is not the occasional incorporation of

theories or insights from the natural sciences into the

social sciences, but rather the explicit acknowl-

edgement that the social sciences must be consistent

with the common understanding of fundamental laws

that the natural sciences have built up over decades

and centuries. This does not mean however that the

social sciences should be explicitly modeled on the

natural sciences or should blindly adopt its methods.

There are profound differences between the two

fields. Theories in the social sciences can affect reality

while theories in the natural sciences cannot. For

example, if people believe the theory that abruptly

ending quantitative easing will cause the stock market

to crash, this could lead to a panicked sale of stocks,

triggering a crash. Eminent mathematical economist

Georgescu-Roegen argued that the mathematical

models of neoclassical economics—explicitly drawn

from the methods of mechanical physics—are ill-

suited for the modeling the qualitative change charac-

teristic of steadily evolving economies [8]. Further-

more, though many physicist believe that if we knew

the position and velocity of all particles in the universe

it would be possible to retrodict the past and predict

the future, and some biologists believe that genes

determine behavior, the economy should not be

described as a mechanistic system devoid of purpose

and will, which leaves no room for policy [9]. The

social sciences should be informed and shaped by, but

not reduced to, the natural sciences [10].

Consilience is also not a one-way street: economists

have long called for the natural sciences to become

more consilient with economics, complaining about the

arrogance of "some scientists in assuming that they are

competent to comment on the economic problems of

the environment without knowing any economics" [11].

Numerous economists have (correctly) pointed out that

limits-to-growth theorists since the time of Malthus

have often failed to account for role of the price

mechanism and human ingenuity in alleviating resource

constraints (e.g. [12‒14]).

Economics—conventionally defined as the allocation

of scarce resources among alternative competing ends

—is a broad field, characterized by many schools of

thought with different degrees of influence, some of

which have paid more attention to consilience than

others. Ecological and biophysical economics for ex-

ample explicitly strive for consilience with the natural

and social sciences [9, 15‒19], but these two fields are

rarely considered part of mainstream economics. It is in

2

fact a bit difficult to define mainstream economics

precisely. An entry in an on-line encyclopedia of

economics states that "we are all neoclassicals now…

what is taught to students, what is mainstream

economics, is neoclassical economics." [20]. Precisely

defining neoclassical economics is also difficult. Some

authors identify three core axioms: economic phe-

nomena can only be explained as the result of

individual actions; all human behavior is an effort to

maximize the satisfaction of individual preferences; and

equilibrium between supply and demand is the starting

point for analysis [21, 22]. Other central themes found

in most undergraduate textbooks include the as-

sumptions that humans are rational, self-interested and

insatiable, everything can be measured in monetary

terms (monism), and preferences are exogenous;

furthermore, Knightian uncertainty (immeasurable risk)

is ignored, and the desirability of continuous economic

growth is taken for granted (e.g. [17, 23]).

In recent decades, serious theoretical and empirical

challenges to the core tenets of neoclassical economics

have shaken the field, and many economists argue that

mainstream economics is transitioning towards greater

consilience with the natural and social sciences.

Colander et al. [24] argue that at "the edge" of the

mainstream, leading economists are incorporating

complexity theory, psychology, ecology and institutions

into their theories. These leaders are strongly re-

spected by their more orthodox colleagues, resulting in

a continual evolution of the mainstream. However,

Colander et al. also acknowledge that the mainstream

economics of 15‒30 years ago (neoclassical economics)

is still taught to undergraduates. Hodgson speculates

that institutional and evolutionary economics may

become the new mainstream [23].

This article focuses primarily on the state of consil-

ience within mainstream economics, while acknowl-

edging the fuzzy boundaries of the field. At one

extreme the article will address the material taught in

undergraduate textbooks—hereafter referred to as

orthodox economics— which is the only exposure

most people receive to economics and arguably the

most influential on policy decisions [17]. As Nobel

laureate and leading textbook author Paul Samuelson

stated "I don't care who writes a nation's laws—or

crafts its advanced treaties—if I can write its eco-

nomics textbooks" [25]. At the other extreme this

article will address "the edge" of economics, and the

new ideas that may be filtering into the mainstream.

From the perspective of sustainability, however, The

most important area for consilience is in the advice

economists provide to policy makers.

Economics is conventionally defined as the al-

location of scarce resources among alternative

competing ends. From this definition, it follows that

two areas of consilience in economics are particularly

important. The first is the science of human behavior

(e.g. psychology, neuroscience, evolution, and so on),

which is relevant to both the ends that economic

activity should pursue and the institutions compatible

with human behavior. The second is the natural

sciences, particularly physics and ecology, which are

most relevant to understanding the means required to

achieve those ends. We can only decide how to

allocate resources after determining the appropriate

ends and human compatibility with different

institutional arrangements, and the available means,

including their physical characteristics.

The structure of the paper is as follows. The first

section following this introduction will focus on

consilience with the science of human behavior. Sub-

sections focus on rationality, self-interest and satia-

bility, followed by a discussion of the extent to which

consilience has occurred. The second section will

focus on the natural sciences, with sub-sections on

the laws of physics, and the laws of ecology, followed

by a discussion of consilience. The third section will

focus on the implications of consilience for the

allocation problem, with subsections on the physical

characteristics of the scarce resources, the laws of

economics, and how we should allocate.

2. Human Behavior, Ends and Institutions

Modern economics arose from utilitarian philosophy,

which viewed the maximization of utility—the achieve-

ment of the greatest happiness for the greatest

number—as a moral imperative for society and the

desired end of economic activity [26,27]. Since people

experience diminishing marginal utility, classical util-

itarian philosophy seemed to call for a more equitable

distribution of resources. Many economists argued

however that a major challenge to maximizing utility

was the difficulty or impossibility of objectively quan-

tifying utility or comparing utility between individuals.

On the other hand, if people are rational they will

prefer things that generate more utility to those that

generate less, and their willingness to pay for different

goods and services (including leisure and other non-

market activities, the costs of which can be inter-

preted as the income foregone by not working) will

reveal their preferences [28]. There is no need to

directly measure utility. This result led mainstream

economics to redefine utility and welfare as the

satisfaction of individual preferences or tastes as

revealed by willingness to pay [26, 29, 30]. Utility for

society in the current period is therefore maximized

when resources are allocated to those willing to pay

the most for them, which also maximizes monetary

value for the economy as a whole. In the words of a

leading economist "the refusal of modern economists

to make "interpersonal comparisons of utility" means

in effect that they use wealth rather than happiness

as the criterion for an efficient allocation of resources"

([31] p. 88). By "efficient", Posner means Pareto

efficient (also known as Pareto optimal) in honor of

Vilfredo Pareto, a central figure in the development of

neoclassical economics. Pareto efficiency is defined as

3

a situation in which it is impossible to make at least

one individual better off without making another worse

off. Under certain rigid assumptions, markets can be

shown to allocate resources in a Pareto efficient

manner. The central desired end of economic activity in

mainstream welfare economics is Pareto efficiency,

equivalent to the maximization of monetary value or

economic surplus at any given point in time, brought

about by the satisfaction of individual preferences in a

market economy. Market competition however leads

firms to sell their products at the lowest possible price

to cover their factors of production, eliminating

economic profit. The pursuit of profit leads firms to

innovate, so that consumers can obtain more and

better products at a lower price over time. Since a

larger economy creates even more wealth, continuous

economic growth is another desired end.

These conclusions emerged from fairly rigid as-

sumptions about human behavior, including rationality,

self-interest, and insatiability. They also rely on the

assumption that we cannot make interpersonal

comparisons of utility. The following three sub-sections

will examine the rapidly accumulating evidence that

refutes these assumptions, much of which was

produced by economists at "the edge". The forth sub-

section below assesses the extent to which this

evidence has affected mainstream economics.

2.1. Are People Rational?

The behavioral sciences, including behavioral eco-

nomics and neuroscience, have done the most to

challenge the notion that humans are perfectly

rational. The polymath Herbert Simon first popularized

the ideas of "bounded rationality" and "satisficing",

which recognized that humans have limited cognitive

capacity and limited information, and under these

circumstances must settle for satisfactory rather than

optimal decisions [32]. Tversky and Kahneman

showed in rigorous experiments that human decision-

making exhibits systematic biases. For example, most

people are risk averse, and weight losses more heavily

than gains of equal value. One can frame a single

problem in a way that emphasizes either losses or

gains and affect the decision making process [33]. As

the title of two popular books emphasize, numerous

experiments have shown that people are "Predictably

Irrational" [34], and we can therefore use our know-

ledge of human behavior to "Nudge" [35] people in

desired directions. Economist Milton Friedman argued

that the test of a good theory is not its realism, but

rather its ability to generate good predictions [36];

the assumption of economic rationality fails this test.

Neuroscientists and evolutionists have dug deeper

into the origins of such seemingly 'irrational' behavior.

The human brain has three quasi-independent

subsystems with different functions that evolved at

different times. Roughly speaking, the 'reptilian' part

of the brain is responsible for many automatic and

instinctual behaviors, the limbic system is responsible

for emotions and related behaviors, and the more

recently evolved neo-cortex is responsible for logic,

abstract thought and planning for the future. People

use different parts of the brain to make different types

of decisions, and it is possible to frame a decision in

such a way that it elicits a different response initiated

in a different part of the brain [37]. Furthermore,

"continuous exposure to fixed cultural norms (e.g.,

religious doctrines, political ideologies and disciplinary

paradigms) literally helps to shape the brain's synaptic

circuitry in quasi-fixed patterns that reflect and embed

those experiences" which leads people to reject

information that does not conform to their pre-

existing beliefs [38]. In fact, certainty appears to be

more of an emotional state than the result of rational

thought [39]. This helps explain surveys that show

higher levels of education correlate with greater belief

in anthropogenic climate change in all groups in the

US except Republicans, where the inverse is true [40];

and that conservative white males, particularly those

with high self-reported understanding of global

warming, are more likely to deny anthropogenic

climate change than other groups [41].

2.2. Are People Purely Self-Interested?

Convincing challenges to the notion of perfect self-

interest come from a wide variety of fields, including

anthropology, mathematical biology, behavioral eco-

nomics, neuroscience, epidemiology and evolution.

Increasing evidence suggests that symbiotic coop-

eration has played a critical role in major evolutionary

transitions, including the emergence of eukaryotes

from cooperating groups of prokaryotes and multi-

cellular life from cooperating groups of unicellular

organisms [42, 43]. Cooperation and concern for others

is ubiquitous in humans and likely the major factor

contributing to humanity's success [44‒47]. Historically,

economists used the theory of natural selection to

support their assumption of self-interest, arguing that

individuals who sacrificed their own fitness to help

others would be out-competed by selfish individuals,

thus purging altruism from the gene pool. However,

mathematical biology has confirmed at least five

different paths through which cooperation can evolve:

direct reciprocity, indirect reciprocity, kin-selection,

spatial proximity, and group selection. The fact that all

five occur in humans makes us 'Super Cooperators'

[45]. Anthropologists have empirically tested various

theories of cooperation in modern communities, finding

significant support for them [48], while evolutionists

have tested their theories of cooperation against

random samples from the anthropological literature,

again finding significant support [49].

Perhaps the most interesting path to cooperation is

group selection, or more accurately multi-level se-

lection: groups with more altruistic individuals have

greater reproductive success than those with more

4

selfish individuals, even though within a given group,

selfish individuals may be more fit [44, 45, 49‒51].

This results in a population that can exhibit a wide

range of genetic pre-dispositions towards pro-social

behavior, ranging from purely selfish to highly altruistic.

Many cooperative species ranging from slime molds to

guppies and humans are able to detect and punish

cheaters and favor cooperators, which further pro-

motes cooperation [49, 52]. The need to identify

cheaters and cooperators may in fact have played an

important role in the evolution of human intelligence

[45, 53].

In humans, the genetic capacity for cooperation

has been supplemented by culture in a co-evo-

lutionary process. Behavioral economists have devised

a series of games that show that people will sacrifice

their own welfare to help others even in anonymous

settings, and will also sacrifice their own welfare in

order to punish selfish individuals. Such punishment

appears to be a social mechanism for promoting

cooperation, and is thus known as altruistic pun-

ishment [54, 55]. Mathematical models show that

altruistic punishment, including the punishment of

non-punishers, greatly facilitates the emergence of

cooperation and is often built into cultural norms [48,

56]. As a result, different cultures exhibit different

degrees of cooperation [45, 57].

Another interesting finding is that cooperative species

as varied as the prokaryote

Myxococcus xanthus

[58]

and the eukaryote

Dictostelium discoideum

[52]

cooperate when resources are scarce, but not when they

are relatively abundant. This raises the interesting pos-

sibility that our competitive market economy is only

viable in the presence of fossil fuels, which unleashed a

new era of unprecedented resource abundance.

Confirming the biogenetic component of co-

operation, neuroscientists have drawn attention to the

neurotransmitter oxytocin and its kin, which are found

in all animals from fish to mammals. Oxytocin serves

as a hormone that stimulates birth contractions in

mothers, and as a neurotransmitter that induces a

strong feeling of bonding. When people engage in

cooperative activities, their oxytocin levels increase,

and administering aerosolized oxytocin increases the

likelihood of cooperation in experimental games [59,

60]. Oxytocin is also stimulated by sexual activity, and

induces sensations of well-being [61]. Perhaps blood

oxytocin levels are a more accurate measure of utility

than consumption!

Humans are capable of developing institutions that

lead primarily selfish individuals to cooperate, or

primarily cooperative individuals to be selfish [22, 62‒

65]. One particularly disturbing finding is that monetary

exchange may actually reduce cooperation by crowding

out intrinsic motivations [66, 67], and simply priming

people to think about money may make them more

self-interested [68].

A final challenge to the assumption of perfect self-

interest is the compelling study by epidemiologists

Wilkinson and Pickett. Their research found that

individuals in unequal societies experience higher

levels of social and health problems then individuals in

more equal societies, regardless of overall levels of

income. In fact, wealthy individuals may be worse off

in unequal societies than lower income individuals in

more equal societies [69]. Humans appear to have an

innate concern for fairness [70].

Integrating these insights into economic analysis has

profound impacts. Many of the most serious problems

faced by society today, ranging from climate change to

developing green technologies, can be modeled as

prisoners' dilemmas, which are best solved through

cooperation [45, 71]. If people evolved to be highly co-

operative, if different economic institutions elicit different

degrees of cooperation, and if markets can elicit selfish

behavior, then it becomes obvious that we must explore

a variety of allocative mechanisms in addition to markets

[22, 72], such as strategies based on shared production

and common ownership [71, 73‒77]. If people are

inherently social, then we must question the metho-

dological individualism that underlies most micro-

economic analysis. If people care about fairness and

equality, then just distribution may be more important

than Pareto efficiency.

2.3. Are People Insatiable?

The assumption of insatiability also fails to stand up to

the scientific evidence. Perhaps the most obvious

evidence comes from anthropology. Humans were

nomadic hunter-gatherers for at least 95% of their

history. As hunting and gathering activities depleted

food supplies, tribes were forced to seek out new food

sources, often far away. Those who attempted to

accumulate more than they could carry would starve

[78], so it is hard to envision an evolutionary advan-

tage to insatiability. Nomadic societies were also highly

egalitarian, and frequently punished individuals who

took too large a share of available resources [49].

Why then are people in general so willing to

consume more? Chilean economist Max-Neef suggests

that people might believe (perhaps convinced by

advertisers) that consuming a certain product will

satisfy their need for freedom, affection, participation,

leisure and so on. When consuming the product fails

to satisfy, they may mistakenly believe that they

simply have not consumed enough, leading to a

feeling of insatiability [79]. Another problem arises

with positional goods, consumed to confer status.

Status is a relative concept, and if everyone's con-

sumption level increases equally, then status is un-

changed even as environmental impacts worsen [80].

Furthermore, as the rich increase their consumption of

status goods, everyone else will feel worse off, and

people may make important sacrifices of their own

well-being in other areas in order to maintain their

status [81‒84]. Humans are other-regarding in envy as

well as fairness.

5

This evidence suggests that beyond a certain point,

ever-increasing consumption, especially of positional

goods, may provide few benefits for society, while

imposing serious costs.

2.4. Is the Science of Human Behavior Affecting

Mainstream and Orthodox Economics?

Economists at the edge of the mainstream (including

many not cited above) have conducted much of the

research on human behavior that challenges rationality,

self-interest and satiability, with results frequently

published in mainstream journals and taught in

graduate programs. By these criteria, consilience is

underway.

However, while an increasing number of under-

graduate textbooks mention behavioral economics, it

has yet to change orthodox economics in any mean-

ingful way. Perhaps the most damning evidence here is

the consistently replicated research showing that

relative to the general population, people who study

economics on average behave less cooperatively [85,

86]; prioritize profit maximization over fairness [87];

are more corrupt [88]; and are more likely to free ride

[89]. Some of the differences are based on pre-

selection (i.e. more selfish people are likely to study

economics) but some are based on indoctrination [90];

in either case this does not bode well for consilience

with the behavioral sciences. On the other hand,

Bowles' [91] textbook accepts the science of human be-

havior and evolution as core principles, and may fore-

shadow a fundamental change in orthodox economics.

From the perspective of sustainability, consilience

matters most when the resulting insights are

incorporated into policy recommendations. Gowdy and

Erickson (2005) argue that despite the fact that

"neoclassical theorists have by and large abandoned

economic man …the policy recommendations of

economists are still based on these outdated repre-

sentations of human behavior…(and continue) to offer

bad advice in dealing with some of the most pressing

environmental and social issues faced in the twenty-

first century". Gintis [92] concurs that "environmental

policies are generally based on a model of the human

actor taken from neoclassical economic theory".

Focusing specifically on the problems of positional

goods, but equally relevant to other insights from the

science of human behavior, Frank [93] asks "why does

the economics profession take no account of these

concerns when formulating economic policy

recommendations?", and asserts that none of the

responses provide by his colleagues bear scrutiny.

One reason that many economists fail to accept the

insights from behavioral economics is the assertion

that choice behavior is equivalent to welfare by

definition, in which case it simply does not matter

how or why people make particular choices. From this

libertarian perspective, if we cannot make objective,

interpersonal comparisons of utility, then the only

objective goal is free choice (e.g. [29, 30]).

However, when economists argue for the satis-

faction of subjective preferences as a central goal of

economics, they fail to point out that markets weight

preferences by purchasing power. Many of the prob-

lems central to sustainability concern the allocation of

society's shared inheritance from nature. It is hardly

value-neutral or objective to assert that we should

allocate based on the principle of one dollar, one vote

rather than one person, one vote, particularly if

people care about fairness. Markets assign a weight of

zero to the preferences of the destitute, and system-

atically allocate resources towards the wealthy. This is

particularly troubling for resources that are essential

and non-substitutable. Take food as an example.

When the prices of grain more than doubled during

the food crisis of 2007 to 2008, rich countries such as

the USA saw negligible change in consumption; the

price of wheat tripled, yet consumption actually

increased [94]. The poorest countries in contrast saw

a dramatic surge in hunger and malnutrition [95].

Unquestionably, monetary value is maximized by

allocating food to an overfed rich person willing to pay

a high price rather than a malnourished and destitute

family who can afford to pay almost nothing, but it is

difficult to accept that this this is somehow optimal,

efficient or utility maximizing. In fact, markets

arguably allocate the marginal calorie to those who

gained the least additional utility from its consumption

[96]. The refusal of orthodox economics to make

interpersonal comparisons of utility is so extreme

however that mainstream textbooks essentially deny

the distinction between wants and needs; to quote a

typical textbook, "the law of demand puts the concept

of basic human 'needs' to rest, at least as an

analytical concept" ([97] p. 259). Denying physio-

logical needs is denying basic science.

If I prefer oranges and you prefer apples, it may be

impossible to determine if the utility I receive from

oranges exceeds what you receive from apples, and

allocation based on willingness to pay seems perfectly

reasonable. However, to whom society decides to al-

locate resources required to satisfy physiological ne-

cessities is an ethical issue, not a question of pref-

erences [98, 99]. This is especially true if those

resources are a gift from nature.

While science can tell us much about the desirable

ends of economic activity, which ends should be prior-

itized is ultimately an ethical question. Science may

however be able to contribute insights into ethical

issues. One hypothesis is that ethics is the result of

gene-culture evolution designed to promote human

cooperation, and hence the survival of the species. Jot

down a list of five ethical behaviors and five unethical

behaviors. You are likely to find that ethical behaviors

put the group ahead of the individual, while unethical

behavior puts the individual ahead of the group. Most

religions similarly call for putting the group ahead of

the individual [50]. Consilience with either the

6

sciences or humanities would force economists to

reconsider the goal of maximizing monetary value,

particularly for essential resources.

3. What Do the Physical and Life Sciences Tell

Us About Scarce Resources?

Consilience with the social sciences and humanities

would force mainstream economics to reconsider what

is desirable; consilience with the physical and life

sciences would force it to reconsider what is possible.

Conventional economics emerged at a time when

natural resources were vast relative to human

demands. The recently unleashed power of fossil fuels

provided access to previously unavailable mineral

resources and unprecedented quantities of renewable

resources. Surplus output allowed society to allocate

more resources towards science, and technological

advances further enhanced humanity's resource base

[100]. Economists came to assume that technology

could always find a substitute for any given resource,

to the point that they could safely ignore natural

resources and focus entirely on capital and labor as

the scarce means of production [101]. When

economists again began to occasionally incorporate

natural resources into their production functions in the

1970s, raw materials, capital and labor were treated

as substitutes, as though one could make more bread

from the same flour by adding more cooks and ovens

[102‒105]. Economists largely treated technology as

manna from heaven, and virtually ignored the

importance of cheap and abundant energy [106]. The

power of fossil fuels however has allowed us to

deplete natural capital stocks and increase waste

emissions to levels that diminish the ecosystem's

capacity to reproduce and to sustain critical functions.

Economics can no longer ignore the laws of physics

and ecology and the natural resource base on which

society and the economy depend [9, 18, 107].

3.1. The Laws of Physics

From the laws of physics we know that it is impossible

to create something from nothing. All economic

products result from the transformation of raw

materials provided by nature. Furthermore, it is

impossible to create nothing from something. All

human made products break down, wear out and

eventually fall apart, returning to the environment as

waste. The extraction of raw materials from nature

and the return of disordered waste are known as

throughput. Simply maintaining existing capital stocks

in the face of entropy requires continuous flows of

throughput [108].

We also know from physics that the transformation

of raw material inputs into economic products and

waste requires low entropy energy, irreversibly con-

verted through use into high entropy waste. Recycling

energy without net energy loss is impossible [18,

109]. Finite stocks of fossil fuels account for nearly

90% of all energy used for economic production. We

can use fossil fuels almost as fast as we like, but once

used they are gone forever. New technologies have

recently helped increase gross oil production, but with

increasingly high energy costs per new barrel ex-

tracted, hence lower net energy and higher green-

house gas emissions per barrel [110, 111]. The

renewable alternatives to fossil fuel are available in

vast quantities, but most are highly diffuse, difficult to

capture, transport and store, and flow at a fixed rate

over time [107, 112]. Sustainability demands that we

deplete fossil fuel stocks no faster than we master the

technologies required to bring alternative energy

sources on line [108].

Economists must account for at least three distinct

categories of factors of production, that are essentially

complements, not substitutes, and that have different

characteristics: raw materials, capital, and energy.

Raw materials—which Aristotle called material cause

and Georgescu-Roegen (1971) dubbed stock-flow

resources— are physically transformed into economic

products at a rate we choose, and use equals

depletion. Capital and labor—which Aristotle called

efficient cause and Georgescu-Roegen (1971) dubbed

fund-service resources—transform raw materials into

products that benefit humans at a given rate over

time. Fund-services are not used up in the act of

production, but rather are worn out and must be

maintained. Fund-services require energy, such as

fossil fuels, food or sunshine. As an example, a bakery

requires flour, cooks, ovens and energy (food for the

cooks, electricity for the ovens). Labor and capital,

both fund-services, can substitute for each other, but

are complements to flour and energy. A more efficient

stove uses less energy, which could be construed as

substitution at the margin, but once maximum

efficiency has been achieved, no additional sub-

stitution is possible.

Finally, the most basic laws of physics and

mathematics tell us that exponential increases in

efficiency or exponential growth of any physical

subsystem of a finite system can at best be transient

phenomena [113]. One dollar invested in the year 0

at 6% interest would now have the same value as a

ball of gold (at $1300 an ounce) filling our solar

system to the orbit of Pluto. The economy is a

physical system, and cannot grow indefinitely.

3.2. The Laws of Ecology

The laws of ecology are almost certainly more tightly

binding on economic activity than the laws of physics,

though often far less understood. Many of the raw

materials (stock-flow resources) physically transformed

into economic products alternatively serve as the

structural building blocks of ecosystems (funds that

generate a service). Society can largely determine how

fast to deplete available raw material stocks, such as

7

trees in a forest. A particular configuration of eco-

system structure creates an ecosystem fund that

generates a flux of services over time. The ecosystem

fund is not physically transformed into the services it

provides (e.g. a forested watershed is not transformed

into flood regulation), but humans have little direct

control over the rate at which these services are

provided (a given hectare of forest can absorb only so

much water per day). When ecosystem structure is

removed and waste returned, often in novel forms to

which ecosystems have not had an opportunity to

adapt, ecosystem functions are affected: remove the

trees or kill them with acid rain, and rain water rapidly

flows over compacted soil into the adjacent river,

causing flooding downstream. Many of these services

are essential to sustaining life, including the capacity

for ecosystems to regenerate [114, 115].

Ecosystems exhibit the non-linearity, positive and

negative feedback loops, surprises and emergent

behavior characteristic of complex systems [116].

They are also poorly understood, so we rarely know in

advance the long (or even short) term impacts of our

activities [117, 118]. Many ecosystem services are

characterized by critical thresholds, beyond which

they will flip into entirely different states, potentially

far less amenable to the survival of humans and other

species, and this may hold true for the global

ecosystem as well. In most cases, we do not know

where thresholds lie, nor do we know precisely what

will happen if we exceed them [119, 120].

One of the major challenges in economics is to

determine how much ecosystem structure should be

converted into economic products, and how much left

intact to generate ecosystem services. Two basic laws

apply. First, humans cannot degrade or deplete any

element of ecosystem structure (e.g. fish, forests, or

fresh water) faster than it can regenerate without

eventually crossing some threshold beyond which that

component of the structure is gone, or else the

ecosystem itself crosses an irreversible threshold, with

often unpredictable but potentially catastrophic

results. Enough structure must be left intact to

maintain the flux of ecosystem services upon which

humans and other species depend. Second, humans

cannot emit waste into any finite system at rates

greater than it is absorbed, or else waste stocks will

accumulate, eventually harming humans and/or the

ecosystem in potentially catastrophic ways. Unfor-

tunately, failure to acknowledge the central impor-

tance of the life sciences to the field of economics has

led us to surpass these limits [121]. It is now essential

to reduce resource extraction below regeneration

rates and waste emissions below absorption rates

until stocks are restored to levels compatible with

ecosystem resilience and the continued provision of

ecosystem services. The longer we take to accept

ecological limits to economic production, the greater

the reductions required.

3.3. Are the Sciences of Physics and Ecology Affecting

Mainstream and Orthodox Economics?

To achieve consilience with the physical and ecological

sciences, economists must place energy, natural

resources and waste at the core of their discipline,

and distinguish between fund-service (labor, capital,

ecosystems) and stock flow (raw materials) resources.

Economists must recognize that converting ecosystem

structure into economic products and emitting wastes

inevitably degrades ecosystem functions and accept

the urgent need to limit throughput to levels that do

not threaten life support functions of ecosystems. The

implications of these changes for sustainability are

obvious, but do not stop there. One reason that

economists pay little attention to distribution is that

their models show that factors of production (in-

cluding labor) are compensated according to their

marginal product, which is considered fair. Including

either natural resources or energy in economic

production functions reveals that factors of production

(e.g. labor and capital) are not awarded according to

their marginal product [122‒124], which would force

economists to pay more attention to distribution.

Acknowledging that virtually all economic activity

degrades ecosystem services inevitably leaving some

individuals worse off would force economists to

abandon the criterion of Pareto efficiency.

An increasing number of economists are acknowl-

edging that energy is an essential and non-sub-

stitutable factor of production [18, 123, 125‒127], but

many simultaneously acknowledge that "[v]irtually all

of modern economic growth theory assumes that GDP

growth per capita is driven by technological progress

and capital investment, including knowledge in-

vestment" and "does not take into account energy

availability or prices" [122]. Similarly, many economists

recognize that nature provides essential and non-

substitutable benefits to humans while stressing that

mainstream economists assume endless substitutability

[19, 96, 128‒130]. The emerging field of degrowth

economics recognizes that the current level of eco-

nomic activity already overwhelms planetary bound-

aries and calls for economic contraction in the ag-

gregate to create ecological space for economic growth

in the poorest countries. Again however, these eco-

nomists almost inevitably distinguish themselves from

the mainstream, where the goal of endless growth is

considered the norm [131‒134].

In the second update to Barnett and Morse's [12]

Scarcity and Growth, Simpson et al. [106] provide an

excellent summary of neoclassical economists' treat-

ment of natural resources, energy and the environ-

ment as it has evolved over time. They conclude

(though do not necessarily agree) that "majority

opinion is that even in relatively short periods—years,

even months—substitution possibilities obviate re-

source scarcity" ([106] p. 6). The justification for this

8

belief is that scarcity leads to a price increase that

creates the incentives for substitution, efficiency, or

developing new substitutes. Orthodox economists often

view technology as manna from heaven, which allows

economic growth to continue forever. For example, a

classic article by Solow [135] shows technology con-

tinuously increasing the efficiency with which we use

fossil fuels so that we can continue to produce just as

much from ever smaller quantities. Economists at least

recognize that many ecosystem goods and services are

public goods that generate no price signal—a market

failure that must be corrected before substitution is

guaranteed. More modern growth models view tech-

nology as endogenous and also subject to numerous

market failures, but in general still conclude that

endless growth is possible as long as suitable policies

ensure adequate investments in technology [136].

Of course, few economists are calling for continuous

physical growth of the economy, but rather for pro-

ducing more from less, arguing that "nobody can define

a finite absolute minimum material input required to

produce a unit of economic welfare" ([137] p. 12).

However, just as one dollar grows exponentially in value

to equal a ball of gold the size of the solar system,

continuous exponential growth in economic welfare,

however measured, is likely to be equally impossible,

and would eventually lead to a state of relentless bliss.

Economics is a huge field, and undeniably a growing

number of economists are integrating ecology and

physics into their work, for example in the study of

ecosystem services, natural resources and climate

change [138‒140]. What really matters however is the

extent to which this translates into advice for policy

makers and education for the next generation of eco-

nomists. The standard proxy for the size of the eco-

nomy, GDP, makes no adjustments for the depletion of

raw materials or energy, yet most economists and

politicians alike call for its continuous growth, in spite

of its widely recognized flaws [141, 142]. College

textbooks in mainstream economics largely ignore

energy, and most focus entirely on labor and capital as

factors of production. Some textbooks do mention

natural resources, but invariably suggest that capital,

labor and technology are substitutes. Even more ad-

vanced courses in natural resource and environmental

economics generally assume unlimited substitutability

between raw materials and capital and focus on contin-

uous economic growth. Most mainstream economists

focus on Pareto efficiency, ignoring the fact that the

resource extraction, fossil fuel and waste emissions that

are the unavoidable consequences of economic activity

invariably have negative impacts on others.

4. Implications of Consilience for the Field of

Economics

If economics achieved consilience with other sciences,

it would be forced to completely rethink the problem

of allocation both within and between generations.

How we should allocate depends on the desired ends,

the physical characteristics and status (e.g. abun-

dance or scarcity) of the available resources, human

behavior and existing institutions. Some of these

factors are dynamic to at least some extent, and as

they change, so too must the institutions and mech-

anisms required for allocation.

4.1. Physical Characteristics of Available Resources

Before describing how true consilience would affect

economics, it is necessary to describe two important

characteristics of the available resources. The first is

known as excludability in economic jargon. A resource

is excludable if it is possible for one person or group

to use it while denying access to others. Access to

such resources can be rationed, which is necessary for

markets to exist. When a resource is non-excludable,

anyone who wants can use it, and rationing is im-

possible. Excludability is a policy variable that can be

implemented to different degrees, though some re-

sources, including many ecosystem services, are

inherently non-excludable. It would for example be

impossible to ration access to a stable climate or the

ozone layer's ability to protect us from ultraviolet

radiation.

Rivalry is another important characteristic. A

resource is rival if use by one person leaves less for

others to use. All stock-flow resources are rival. For

example, if one person cuts down a tree to build a

house, that tree is no longer available for others to

use. Some fund-service resources are also rival. For

example, the more of the waste absorption capacity

for greenhouse gas emissions used by the USA, the

less is available for other nations. When global

emissions exceed absorption capacity, they accu-

mulate as harmful atmospheric stocks. A resource is

non-rival if use by one person does not leave less for

others to use. If a forested watershed prevents dam-

aging floods, landslides and erosion, the benefits

captured by one person living in the regions affected

do not leave less for others to use. Only fund-services

can be non-rival.

Non-rival resources are not scarce in an economic

sense and there is therefore no need to compete for

them. In economic terms, abundant, rival resources are

similar to non-rival resources. For example, a towel on

a beach or a car on the road leaves less space available

for another towel or another car, which is the definition

of rivalry. However, when available space on the beach

or road is abundant, there is no competition for use,

and the resource appears to be non-rival. Road tolls,

beach entrance fees or other policies can ensure that

spaces remain abundant. This has led many

economists to argue that rivalry is a policy variable. In

fact, rivalry is a physical characteristic that cannot be

affected by policy [9]. No policy can change the fact

that burning a barrel of oil leaves less for others, or the

fact that additional people adopting a technology for

9

energy efficiency does not reduce its effectiveness for

those who adopted it first. Information is more than

just non-rival: it actually improves with use [143].

Information is also essential for all economic production

and must play an important role in addressing our

current ecological crises.

4.2. The 'Laws' of Economics

Modern economics emerged at the end of the 18th

century, when natural resources were relatively

abundant and per capita consumption of human made

goods and services a tiny fraction of what it is today

(Delong [144] estimates that real global GDP per

capita has increased more than 30 fold since 1800).

Increasing the output of human made products was

arguably the best way to improve human welfare, and

markets an effective way to achieve this goal. Most

economists therefore focused on market allocation.

The market price mechanism allocates scarce re-

sources towards the products that add the most

monetary value then rations those products towards

the consumers willing to pay the most for them. The

rule for achieving this outcome is to keep producing

or consuming until rising marginal costs equal

diminishing marginal benefits. The logic is straight-

forward: when marginal benefits exceed marginal costs

then increasing consumption of a single commodity or

of economic production as a whole increases total

utility. However, if marginal costs exceed marginal

benefits, then additional consumption makes us worse

off. Diminishing marginal utility, rising marginal costs,

and the equimarginal principle of optimization (i.e.

halting consumption when MB=MC) are treated as

basic laws of mainstream economics.

Mainstream economics generally focuses on

diminishing marginal utility for individual commodities:

the first 2000 calories you consume per day provide

far greater benefits than the next 2000. The same

rule applies however for aggregate consumption. In

general, people spend their first units of income on

basic necessities, such as food, water, shelter and

clothing. As we earn more income, we buy in-

creasingly less essential commodities with increasingly

smaller contributions to our well-being. This means

there are diminishing marginal benefits to increasing

consumption, and hence to economic growth. The

marginal costs of economic growth however are

rising. As individuals in a competitive market, we pay

the same nominal price for each additional unit we

consume. However, when we work to produce things

or earn money, we sacrifice the opportunity to engage

in other activities we might enjoy more. As we work

longer hours to earn more money, we must sacrifice

increasingly desirable alternative activities, so the real

cost of consumption rises. At the same time, if we

accept the laws of physics and ecology, for any given

technology, increasing economic production requires

the conversion of larger quantities of raw materials

and energy into economic products and waste,

sacrificing more ecosystem services. Logically, society

will sacrifice the least important ecosystems and

services first, and must therefore sacrifice increasingly

important services with increasing production.

Eventually, the rising ecological costs of economic

growth will exceed the diminishing marginal benefits,

and growth becomes uneconomic, meaning that it

makes us worse off [145]. New technologies may

allow us to produce more from less, but there are

limits to efficiency improvements, and the inexorable

laws of exponential growth will ultimately take over.

Furthermore, efficiency improvements often result in

greater resource use, not less, and the same is true

for economic growth [146].

Eventually, as we convert more ecosystem

structure into economic products and return more

waste, we run the risk of crossing critical ecological

thresholds and imposing unacceptable ecological costs

on society. When we cross a threshold, a marginal

change in activity leads to a non-marginal change in

outcome. If the threshold involved leads to the loss of

an entire species or ecosystem, we must compare the

marginal benefits from the activity with the total value

of the species or ecosystem that is lost into the

indefinite future [147]. Given the law of ecology that

everything is connected to everything else [148], the

total value may be unpredictable in advance, and may

not be realized for decades or even centuries [149].

Balancing marginal costs with marginal benefits is no

longer appropriate.

The central focus of an economics consilient with

laws of ecology and physics should no longer be

about maximizing the monetary value of market

goods and services. Rather, the first priority should be

to ensure that economic activity does not lead us to

cross critical ecological thresholds, ranging from

nitrogen emissions to biodiversity loss and climate

change. With current technologies, this may be very

difficult. For example, Rockstrom et al. [2] estimate

that nitrogen emissions must be reduced by 70% if

we are to avoid such thresholds, while greenhouse

gas emissions must be reduced by at least 80%

[150]. With current technologies it is not obvious that

we can reduce emissions by that much and still feed 7

billion people. Major investments in research and

development in agriculture and clean energy will be

required. Even when safely distant from critical

thresholds, economists should focus on ensuring that

the marginal ecological costs of economic activity do

not exceed the marginal benefits, even though direct

comparison of the costs and benefits may be difficult

or impossible.

4.3. Resource Characteristics and Allocation

Markets are unlikely to be a suitable mechanism for

achieving these economic goals. In the absence of ex-

cludability, anyone who wants can consume a resource

10

whether or not they pay, and hence are unlikely to

voluntarily pay in a competitive market or a in a culture

that promotes self-interest. Ecosystem structure and

mineral resources are typically excludable under

existing institutions, and can easily be converted into

market commodities. However, the ecosystem services

lost from removing structure and emitting waste are

frequently non-excludable. Markets do not compensate

for their provision or penalize for their loss. The result

is over consumption, under-provision and degradation.

This dynamic explains anthropogenic climate change,

land use conversion, biodiversity loss, and most of the

other serious problems currently faced by society.

One solution is to make the resource excludable so

that it becomes possible to ration access. It is impos-

sible to make services such as climate regulation,

disturbance regulation or protection from UV radiation

excludable, but it is generally possible to regulate or

make excludable the activities that destroy these

services. However, making something excludable

requires collective action via social institutions; it is a

prerequisite for market allocation, and not the result of

markets. If sustainability is a goal, then society must

step in to regulate access to ecosystem structure and

waste absorption capacity to ensure the adequate

provision of ecosystem services. Mainstream eco-

nomists often argue that simply establishing tradable

private property rights will automatically lead to

efficient allocation, so who receives those rights is

relatively unimportant [151, 152]. However, as we saw

above with the case of food, market allocation often

forces those with the greatest level of physiological

need for a resource to reduce consumption the most. If

we limit land use change, biodiversity loss, freshwater

and nitrogen to ecologically sustainable levels, food

prices will likely skyrocket and the poor will starve,

which is not socially sustainable. If humans do indeed

care about fairness and the well-being of others, then

price-rationing of essential resources—especially those

freely provided by nature—is inappropriate. Delib-

erative democratic processes give equal weight to

everyone's preferences, while markets weight

preferences by purchasing power. Which of these

approaches to use is about the distribution of power.

Furthermore, ubiquitous externalities rule out Pareto

efficiency as a useful criterion, since virtually all

economic activities have negative impacts on others.

But rationing access is not always a solution. Non-

rival resources are not depleted through use, and

rationing access therefore reduces benefits without

affecting costs. Such resources are not scarce in an

economic sense, as there is no need to compete for

them once they exist—though there is competition for

any rival resources that might be required to produce

or protect them. Markets are only efficient (i.e. able to

balance marginal costs with marginal benefits) for

resources that are rival. Paradoxically, the economic

surplus (the monetary value of total benefits minus

total costs) from non-rival resources is maximized at a

price of zero where anyone who wants can consume

the resource. This is especially true for clean

technologies that replace polluting ones. However, at

a price of zero, market supply is also zero. Economic

systems must still allocate resources towards the

production or protection of non-rival resources.

Private property rights to non-rival resources, (e.g.

patents) provide market incentives to supply them,

but simultaneously reduce the economic surplus they

generate. The appropriate allocation mechanism is

some form of cooperative (e.g. publicly financed)

provision that rewards innovators while making their

innovations freely available [71, 153].

Many of society's most important resources,

ranging from global climate stability and clean energy

technologies (information) to biodiversity and critical

ecosystem services, are non-rival and inherently non-

scarce, challenging the very definition of economics.

Most of these resources are also inherently non-

excludable so that rationing access is also impossible.

However, global society has been strengthening

intellectual property rights for decades, using prices to

ration access to many of the technologies required to

solve our global problems [154]. For example, if we

develop a clean, efficient, decentralized form of solar

energy, no matter how much solar energy one country

captures, there will be no less for others, and the

technology itself is likely to improve through use.

Patenting the technology and charging for it will

reduce use and hence the potential for reducing

climate change [71].

If people were inherently self-interested and

competitive, as typically modeled by orthodox eco-

nomists, then we would be forced to rely on economic

institutions that channel that behavior towards the

common good, such as markets. Behavioral sciences

however show that humans are capable of cooperation,

and can build institutions that enhance our innate

propensity for pro-social behavior. As discussed above,

markets may actually undermine cooperation.

If economists hope to contribute to sustainability

science, they must take a scientific approach to

economics that builds on insights from the physical,

life, and social sciences. Objective physical charac-

teristics of resources, not ideology, determine whether

competitive or cooperative allocation is most efficient.

Table 1 briefly describes potentially suitable mech-

anisms for allocating different types of resources.

While versions of this table are fairly standard in the

economic literature, most economists treat problems

resulting from non-excludability and non-rivalry as

market failures, externalities that should be inter-

nalized through market prices. An economics that was

more consilient with advances in other fields would

instead recognize that economic activity unavoidably

degrades the environment, environmental degradation

is one of the greatest threats to human welfare, and

most environmental problems take the form of

prisoners' dilemmas that can only be solved through

11

cooperation. Economics should therefore strive to

develop the cooperative institutions required to solve

these problems, and abandon its obsession with

private property and markets.

Table 1. Resource Characteristics and their Implications for Allocation.

Excludable Non-excludable

Rival and scarce Potential market goods, e.g food, oil,

land, consumer goods, but with

inevitable negative externalities, ruling

out Pareto efficiency as a decision tool.

Rationing is desirable, but price

rationing of essential resources is

problematic.

Open access regimes e.g. absorption

capacity for greenhouse gasses;

oceanic fisheries: rationing is

desirable, but requires cooperation and

collective action.

Rival and

abundant

(club or toll

goods)

Club or Toll goods e.g. beaches, parks:

rationing desirable when scarcity is a

threat.

Rationing is desirable when scarcity is

a threat, but requires cooperation and

collective action.

Non-rival Tragedy of the non-commons e.g.

patented green technologies:

rationing undesirable. Open access is

more efficient, but requires

cooperation and collective action.

Public goods/open access resources

e.g. climate regulation, flood

regulation, open source information:

rationing undesirable and impossible.

Cooperative provision is essential.

4.4. Conclusions

There is little question that the discipline of economics is

in a rapid state of flux. Leading economists at the edge

of the mainstream are undoubtedly incorporating ideas

from the science of human behavior, physics and

ecology, and these are slowly filtering down into the

mainstream. Even ideas from decidedly non-mainstream

fields such as ecological and biophysical economics are

becoming more widely accepted. Consilience is oc-

curring. Unfortunately, there is less evidence that the

sciences are having much impact on the economic

orthodoxy, which is widely taught to undergraduates, or

on the advice given to policy makers. Perhaps this is to

be expected however, as academic disciplines tend to

evolve slowly.

At the same time however, the economic system is

also in an extremely rapid state of flux, and its impacts

on global ecosystems are unfolding at an unprecedented

pace. Since the 1950s, the human population has more

than doubled, the use of petroleum has nearly

quadrupled, and economic activity has increased by a

factor of fifteen. Ecological impacts have increased at

the same pace [1]. Economists can no longer afford to

ignore basic principles of ecology and physics. Solving

these problems will require new economic institutions

based on cooperation, and such institutions must be

based on detailed knowledge of human behavior. A few

decades ago, stocks were long-term investments held

for years. Today, they are held for seconds [155, 156].

Foreign currency transactions used to be strictly

regulated. Today, annual transactions are more than

twenty times global GDP [157]. In complex systems,

such rapid and powerful changes can have profound

impacts, such as the financial crisis of 2008, which

caught most economists completely unaware. The

financial crisis undoubtedly pales in comparison to the

more slowly unwinding ecological crises we now face.

Economists can no longer afford to ignore the fact that

the ecological-economic system is a complex, adaptive

system subject to surprise and emergent behavior.

Economic theory must evolve at least as fast as the

economic system if it is to help society face 21st century

challenges. When unfolding events falsify theories from

mainstream and orthodox economics, those theories

must be abandoned. We cannot passively await progress

at the edge of economics to filter through to

practitioners and textbooks over coming decades.

Consilience must be aggressively pursued as a core

principle of economic theory.

Acknowledgments

I would like to thank the Vermont Agricultural

Experiment Station Hatch Program for the funding

necessary to write this article. I also wish to

acknowledge the extremely useful comments made by

anonymous peer reviewers.

12

References

[1] Steffen W, Grinevald J, Crutzen P, McNeill J. The

Anthropocene: Conceptual and historical per-

spectives. Philosophical Transactions of the Royal

Society A: Mathematical, Physical and Engi-

neering Sciences. 2011;369(1938):842‒867.

[2] Rockstrom J, Steffen W, Noone K, Persson A,

Chapin FS, Lambin EF, et al. A safe operating space

for humanity. Nature. 2009;461(7263):472‒475.

[3] Kates RW, Clark WC, Corell R, Hall JM, Jaeger

CC, Lowe I, et al. Sustainability Science. Science.

2001;292(5517):641‒642.

[4] Reid WV, Chen D, Goldfarb L, Hackmann H, Lee

YT, Mokhele K, et al. Earth System Science for

Global Sustainability: Grand Challenges. Science.

2010;330(6006):916‒917.

[5] Gintis H, Bowles S, Boyd R, Fehr E. Moral

Sentiments and Material Interests: Origins,

Evidence and Consequences. In: Gintis H, Bowles

S, Boyd R, Fehr E, editors. Moral Sentiments and

Material Interests: The Foundations of Coop-

eration in Economic Life. Cambridge, MA, USA:

MIT Press; 2005. pp. 3‒40.

[6] Wilson EO. Consilience: The Unity of Knowledge.

New York, NY, USA: Knopf; 1998.

[7] Wilson DS. Consilience: Making contextual

behavioral science part of the United Ivory

Archipelago. Journal of Contextual Behavioral

Science. 2012;1(1‒2):39‒42.

[8] Georgescu-Roegen N. Methods in Economic

Science. Journal of Economic Issues. 1979;13(2):

317‒328.

[9] Daly HE, Farley J. Ecological Economics:

Principles and Applications. 2nd ed. Washington,

DC, USA: Island Press; 2010.

[10] Brown P. The Unfinished Journey of Ecological

Economics: Toward an Ethic of Ecological

Citizenship. In: Farley J, Malghan D, Goodland R,

editors. Beyond Uneconomic Growth: Solving

Society's Most Pressing Ecological Economic

Crises. London, UK: Edward Elgar; Forthcoming.

[11] Beckerman W. Economists, Scientists, and

Environmental Catastrophe. Oxford Economic

Papers. 1972;24(3):327‒344.

[12] Barnett H, Morse C. Scarcity and Growth: The

Economics of Natural Resource Availability.

Baltimore, MD, USA: John Hopkins University

Press; 1963.

[13] Simon J. The Ultimate Resource 2. Princeton, NJ,

USA: Princeton University Press; 1996.

[14] Mann C. What If We Never Run Out of Oil? The

Atlantic. 2013. Available from: http://www.the

atlantic.com/magazine/archive/2013/05/what-if-

we-never-run-out-of-oil/309294/.

[15] Costanza R, Cumberland J, Daly HE, Goodland R,

Norgaard RB. An Introduction to Ecological

Economics. Boca Raton, FL, USA: International

Society for Ecological Economics and St. Lucie

Press; 1997.

[16] Gowdy JM, Carbonell AF. Toward consilience

between biology and economics: The contri-

bution of Ecological Economics. Ecological

Economics. 1999;29(3):337‒348.

[17] Gowdy J, Erickson J. The approach of ecological

economics. Cambridge Journal of Economics.

2005;29(2):207‒222.

[18] Hall CAS, Klitgaard KA. Energy and the Wealth of

Nations. New York, NY, USA: Springer; 2011.

[19] Spash CL. The shallow or the deep ecological

economics movement? Ecological Economics.

2013;93(0):351‒362.

[20] Weintraub ER. Neoclassical Economics. The

Concise Encyclopedia of Economics. Library of

Economics and Liberty; 1993. Available from:

http://www.econlib.org/library/Enc1/Neoclassical

Economics.html.

[21] Arnsperger C, Varoufakis Y. What Is Neoclassical

Economics? The three axioms responsible for its

theoretical oeuvre, practical irrelevance and,

thus, discursive power. Post-autistic Economics

Review. 2006(38):2–12.

[22] Vatn A. Institutions and the Environment.

Northhampton, MA, USA: Edward Elgar; 2005.

[23] Hodgson GM. Evolutionary and Institutional Eco-

nomics as the New Mainstream. Evolutionary and

Institutional Economics Review. 2007;4(1):7‒25.

[24] Colander D, Holt RPF, Rosser Jr. JB. The Changing

Face of Mainstream Economics. Review of Political

Economy. 2004;16(4):485‒499.

[25] Samuelson P. Foreword. In: Saunders P, Walstad

W, editors. The Principles of Economics Course:

A Handbook for Instructors. New York, NY, USA:

McGraw-Hill Publishing; 1990. p. VII.

[26] O'Neill JF. The Market: Ethics, Knowledge and

Politics. London, UK: Routledge; 1998.

[27] Mill JS. Utilitarianism. 4th ed. London, UK:

Longmans, Green, Reader, and Dyer; 1871.

[28] Samuelson P. Consumption Theory in Terms of

Revealed Preference. Economica. 1948;15(60):

243‒253.

[29] Gul F, Pesendorfer W. The Case for Mindless

Economics. In: Caplin A, Schottter A, editors. The

Foundations of Positive and Normative Economics.

Oxford, UK: Oxford University Press; 2008.

[30] Stigler GJ, Becker GS. De Gustibus Non Est

Disputandum. The American Economic Review.

1977;67(2):76‒90.

[31] Posner RA. Wealth Maximization Revisited. Notre

Dame Journal of Law, Ethics and Public Policy.

1985;2:85‒105.

[32] Simon HA. Rational Decision Making in Business

Organizations. American Economic Review.

1979;69(4):493‒513.

[33] Kahneman D, Tversky A. Choices, Values, and

Frames. New York, NY, USA: Cambridge

University Press, Russell Sage Foundation; 2000.

[34] Ariely D. Predictably Irrational. New York, NY,

13

USA: Harper Collins; 2008.

[35] Thaler RH, Sunstein CR. Nudge: Improving

decisions about health, wealth, and happiness.

New Haven, CT, USA: Yale University Press; 2008.

[36] Friedman M. Essays in Positive Economics. Chi-

cago, IL, USA: University of Chicago Press; 1953.

[37] Rosenbloom MH, Schmahmann JD, Price BH.

The Functional Neuroanatomy of Decision-

Making. The Journal of Neuropsychiatry and

Clinical Neurosciences. 2012;24:266‒277.

[38] Rees W. Denying Herman Daly: Why

Conventional Economics Will not Embrace the

Daly Vision. In: Farley J, Malghan D, Goodland

R, editors. Herman Daly Festschrift (e-book):

Encyclopedia of Earth. 2011. Available from:

http://www.eoearth.org/article/Herman_Daly_Fe

stschrift_%28e-book%29.

[39] Burton RA. On Being Certain—Believing You Are

Right Even When You're Not. New York, NY,

USA: St. Martin's Press; 2008.

[40] Pew Research Center for the People & the Press.

A Deeper Partisan Divide Over Global Warming.

Washington, DC, USA: Pew Research Center;

2008.

[41] McCright AM, Dunlap RE. Cool dudes: The denial

of climate change among conservative white

males in the United States. Global Environmental

Change. 2011;21(4):1163‒1172.

[42] Maynard Smith JES. The Origins of Life: From

the Birth of Life to the Origin of Language. New

York, NY, USA: Oxford University Press; 1999.

[43] Margulis L. Origin of Eukaryotic Cells: Evidence

and Research Implications for a Theory of the

Origin and Evolution of Microbial, Plant, and

Animal Cells on the Precambrian Earth. New

Haven, CT, USA: Yale University Press; 1970.

[44] Wilson DS, Wilson EO. Rethinking the Theoretical

Foundations of Sociobiology. The Quarterly

Review of Biology. 2007;82(4):327‒348.

[45] Nowak M, Highfield R. Super Cooperators:

Altruism, Evolution, and Why We Need Each

Other to Succeed. New York, NY, USA: Free Press

(Simon Schuster); 2011.

[46] Gintis H, Bowles S, Boyd R, Fehr E, editors.

Moral Sentiments and Material Interests: The

Foundations of Cooperation in Economic Life.

Cambridge, MA, USA: MIT Press; 2005.

[47] Wilson EO. The Social Conquest of Earth. New

York, NY, USA: Liveright Publishing Corporation;

2012.

[48] Henrich J, Henrich N. Why Humans Cooperate: A

Cultural and Evolutionary Explanation. New York,

NY, USA: Oxford University Press; 2007.

[49] Sober E, Wilson DS. Unto Others: The Evolution

and Psychology of Unselfish Behavior. Cambridge,

MA, USA: Harvard University Press; 1998.

[50] Wilson DS. Evolution for everyone: How Darwin's

theory can change the way we think about our

lives. New York, NY, USA: Delacorte Press; 2007.

[51] Darwin C. The Descent of Man. London, UK:

Penguin Classics; 2004.

[52] Hudson RE, Aukema JE, Rispe C, Roze D.

Altruism, Cheating, and Anticheater Adaptations

in Cellular Slime Molds. The American Naturalist.

2002;160(1):31‒43.

[53] Cosmides L, Barrett HC, Tooby J. Adaptive

specializations, social exchange, and the evolution

of human intelligence. Proceedings of the National

Academy of Sciences. 2010;107(2):9007–9014.

[54] Boyd R, Gintis H, Bowles S, Richerson PJ. The

evolution of altruistic punishment. Proceedings of

the National Academy of Sciences of the United

States of America. 2003;100(6):3531‒3535.

[55] Bowles S, Gintis H. The evolution of strong reci-

procity: Cooperation in heterogeneous populations.

Theoretical Population Biology. 2004;65(1):17‒28.

[56] Boyd R, Richerson PJ. Punishment allows the

evolution of cooperation (or anything else) in

sizable groups. Ethology and Sociobiology.

1992;13(3):171‒195.

[57] Henrich J, Boyd R, Bowles S, Camerer C, Fehr E,

Gintis H, et al. In search of Homo economicus:

Behavioral experiments in 15 small-scale societies.

American Economic Review. 2001;91(2):73‒78.

[58] Velicer G, Stredwick K. Experimental social

evolution with Myxococcus xanthus. Antonie van

Leeuwenhoek. 2002;81(1):155‒164.

[59] Kosfeld M, Heinrichs M, Zak PJ, Fischbacher U,

Fehr E. Oxytocin increases trust in humans.

Nature. 2005;435(7042):673‒676.

[60] Zak PJ. The Neurobiology of Trust. Scientific

American. 2008;298:88‒95.

[61] Gordon I, Martin C, Feldman R, Leckman JF.

Oxytocin and social motivation. Developmental

Cognitive Neuroscience. 2011;1(4):471‒493.

[62] Fischbacher U, Gächter S, Fehr E. Are people

conditionally cooperative? Evidence from a public

goods experiment. Economics Letters.

2001;71:397–404.

[63] Gachter S. Conditional Cooperation: Behavioral

Regularities from the Lab and the Field and Their

Policy Implications. In: Frey BS, Stutzer A,

editors. Economics and psychology: A promising

new cross-disciplinary field. Cambridge, MA,

USA: MIT Press; 2007.

[64] Ostrom E. Governing the Commons: The Evolution

of Institutions for Collective Action. Cambridge, UK:

Cambridge University Press; 1990.

[65] Ostrom E, editor. The Drama of the Commons.

Washington, DC, USA: National Academy Press;

2002.

[66] Frey BS, Jegen R. Motivation Crowding Theory.

Journal of Economic Surveys. 2001;15(5):

589‒611.

[67] Gneezy U, Rustichini A. Pay Enough Or Don't Pay

At All. The Quarterly Journal of Economics.

2000;115(3):791‒810.

[68] Vohs KD, Mead NL, Goode MR. The Psychological

14

Consequences of Money. Science. 2006;314

(5802):1154‒1156.

[69] Wilkinson R, Pickett K. The Spirit Level: Why

Greater Equality Makes Societies Stronger. New

York, NY, USA: Bloomsbury Press; 2009.

[70] Fehr E, Schmidt KM. A Theory Of Fairness,

Competition, And Cooperation. The Quarterly

Journal of Economics. 1999;114(3):817‒868.

[71] Farley J, Perkins S. Economics of Information in

a Green Economy. In: Robertson R, editor.

Building a Green Economy. East Lansing, MI,

USA: Michigan State University Press; 2013.

[72] Bromley D. Environment and Economy: Property

Rights and Public Policy. Oxford, UK: Blackwell;

1991.

[73] Barnes P, Costanza R, Hawken P, Orr D, Ostrom

E, Umana A, et al. Creating an Earth Atmos-

pheric Trust. Science. 2008;319(5864):724.

[74] Barnes P. Capitalism 3.0. A Guide to Reclaiming

the Commons. San Francisco, CA, USA: Berrett-

Koehler Publishers; 2006.

[75] Benkler Y. Commons-Based Strategies and the

Problems of Patents. Science. 2004;305(5687):

1110‒1111.

[76] Raffensperger C, Weston B, Bollier D. Define and

Develop a Law of the Ecological Commons for

Present and Future Generations; 2009.

[77] Bollier D. Silent Theft: The Private Plunder of our

Common Wealth. New York, NY, USA: Routledge;

2002.

[78] Gowdy J, editor. Limited Wants, Unlimited

Means: A Reader on Hunter-Gatherer Economics

and the Environment. Washington, DC, USA:

Island Press; 1998.

[79] Max-Neef M. Development and Human needs.

In: Ekins P, Max-Neef M, editors. Real-life

Economics: Understanding Wealth Creation.

London, UK: Routledge; 1992. pp. 197‒213.

[80] Schor JB. Prices and quantities: Unsustainable

consumption and the global economy. Ecological

Economics. 2005;55(3):309‒320.

[81] Frank R. Luxury Fever: Why Money Fails to

Satisfy in an Era of Excess. New York, NY, USA:

Free Press; 1999.

[82] Levine AS, Frank RH, Dijk O. Expenditure

Cascades. 2010 Available at SSRN:

http://dx.doi.org/10.2139/ssrn.1690612.

[83] Layard R. Happiness: Lessons from a New Science.

New York, NY, USA: Penguin Press; 2005.

[84] Hirsch F. Social Limits to Growth. Cambridge,

MA, USA: Harvard University Press; 1976.

[85] 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.

[86] Frank RH, Gilovich T, Regan DT. Does Studying

Economics Inhibit Cooperation? Journal of

Economic Perspectives. 1993;7(2):159‒171.

[87] Cipriani GP, Lubian D, Zago A. Natural born

economists? Journal of Economic Psychology.

2009;30(3):455‒468.

[88] Frank B, Schulze GG. Does economics make

citizens corrupt? Journal of Economic Behavior &

Organization. 2000;43(1):101‒113.

[89] Marwell G, Ames RE. Economists free ride, does

anyone else?: Experiments on the provision of

public goods, IV. Journal of Public Economics.

1981;15(3):295‒310.

[90] Kirchgässner G. (Why) are economists different?

European Journal of Political Economy.

2005;21(3):543‒562.

[91] Bowles S. Microeconomics: Behavior, Institutions

and Evolution. Princeton, NY, USA: Princetion

University Press; 2006.

[92] Gintis H. Beyond Homo economicus: Evidence

from experimental economics. Ecological

Economics. 2000;35(3):311‒322.

[93] Frank RH. Positional Externalities Cause Large

and Preventable Welfare Losses. American

Economic Review. 2005;95(2):137‒141.

[94] USDA. Wheat data. 2013. Available from:

http://www.ers.usda.gov/data-products/wheat-

data.aspx#.U1b5kfl5OSq.

[95] FAO. The State of Food Insecurity in the World

2008. Rome, IT: FAO; 2008.

[96] Farley J. Ecosystem Services: The Economics

Debate. Ecosystem Services. 2012;1(1):40‒49.

[97] Sexton RL. Exploring Microeconomics: In-

structor's edition. Mason, OH, USA: South-

western Cengage Learning; 2011.

[98] O'Neill J. Managing without Prices: The Monetary

Valuation of Biodiversity. Ambio. 1997;26(8):

546‒550.

[99] Spash CL. How much is that ecosystem in the

window? The one with the biodiverse trail.

Environmental Values. 2008;17(2):259‒284.

[100] Beddoe R, Costanza R, Farley J, Garza E, Kent J,

Kubiszewski I, et al. Overcoming Systemic

Roadblocks to Sustainability: The evolutionary

redesign of worldviews, institutions and tech-

nologies. Proceedings of the National Academy

of Sciences. 2009;106(8):2483‒2489.

[101] Farley J. Natural Capital. In: Anderson R, editor.

Berkshire Encyclopedia of Sustainability: Great

Barrington, MA, USA: Berkshire Publishing;

2012. pp. 264‒267.

[102] Daly HE. Georgescu-Roegen versus Solow/Stiglitz.

Ecological Economics. 1997;22(3):261‒266.

[103] Daly HE. Georgescu-Roegen versus Solow/

Stiglitz—Reply. Ecological Economics. 1997;22(3):

271‒273.

[104] Stiglitz JE. Georgescu-Roegen versus Solow/

Stiglitz. Ecological Economics. 1997;22(3):269–

270.

[105] Solow RM. Georgescu-Roegen versus Solow/

Stiglitz. Ecological Economics. 1997;22(3):267-

268.

[106] Simpson RD, Toman MA, Ayres RU, editors.

15

Scarcity and Growth Revisited: Natural

Resources and the Environment in the New

Millenium. Washington, DC, USA: Resources for

the Future; 2005.

[107] Georgescu-Roegen N. The Entropy Law and the

Economic Process. Cambridge, MA, USA: Harvard

University Press; 1971.

[108] Daly HE. Steady-State Economics: The Political

Economy of Bio- physical Equilibrium and Moral

Growth. San Francisco, CA, USA: W. H. Freeman

and Co.; 1977.

[109] Georgescu-Roegen N. Energy and Economic

Myths. Southern Economic Journal. 1975;41(3):

347‒381.

[110] Gates ID, Larter SR. Energy efficiency and

emissions intensity of SAGD. Fuel. 2014;115(0):

706‒713.

[111] Hall CAS, Lambert JG, Balogh SB. EROI of

different fuels and the implications for society.

Energy Policy. 2014;64(0):141‒152.

[112] Hall CAS, Cleveland CJ, Kaufmann R. Energy and

Resource Quality. New York, NY, USA: Wiley

Interscience; 1986.

[113] Hubbert MK. Exponential Growth as a Transient

Phenomena in Human History. In: Daly H,

Townsend K, editors. Valuing the Earth:

Economics, Ecology, Ethics. Cambridge, MA,

USA: MIT Press; 1993. p-. 113‒125.

[114] Malghan D. A dimensionally consistent

aggregation framework for biophysical metrics.

Ecological Economics. 2011;70(5):900‒909.

[115] Farley J, Costanza R. Payments for ecosystem

services: From local to global. Ecological

Economics. 2010;69(11):2060‒2068.

[116] Meadows D. Thinking in Systems: A Primer. White

River Junction, VT, USA: Chelsea Green; 2008.

[117] Millennium Ecosystem Assessment. Ecosystems

and Human Well-being: Synthesis. Washington,

DC, USA: Island Press; 2005.

[118] Faber MM, Proops JL, Manstetten R. Evolution,

Time, Production and the Environment. New

York, NY, USA: Springer-Verlag; 1998.

[119] Barnosky AD, Hadly EA, Bascompte J, Berlow EL,

Brown JH, Fortelius M, et al. Approaching a state

shift in Earth/'s biosphere. Nature. 2012;

486(7401):52‒58.

[120] Muradian R. Ecological thresholds: A survey.

Ecological Economics. 2001;38(1):7‒24.

[121] Daly HE. Towards some operational principles for

sustainable development. Ecological Economics.

1990;2(1):1‒6.

[122] Ayres RU, van den Bergh JCJM, Lindenberger D,

Warr B. The underestimated contribution of

energy to economic growth. Structural Change

and Economic Dynamics. 2013;27(0):79‒88.

[123] Kümmel R. Why energy's economic weight is much

larger than its cost share. Environmental Inno-

vation and Societal Transitions. 2013;9(0):33‒37.

[124] Daly H. How long can neoclassical economics

ignore the contributions of Georgescu-Roegen?

In: Mayumi K, Gowdy J, editors. Bioeconomics

and Sustainability: Essays in Honor of Nicholas

Georgescu-Roegen. Cheltenham, UK: Edward

Elgar Publishing; 1999. pp. 13‒24.

[125] Apergis N, Payne JE. Energy consumption and

growth in South America: Evidence from a panel

error correction model. Energy Economics.

2010;32(6):1421‒1426.

[126] Ayres R, Warr B. The Economic Growth Engine:

How Energy and Work Drive Material Prosperity.

Northampton, MA, USA: Edward Elgar; 2009.

[127] Victor P. Managing Without Growth: Slower by

Design, not Disaster. Cheltenham, UK: Edward

Elgar Publishing; 2008.

[128] Ekins P, Simon S, Deutsch L, Folke C, De Groot

R. A framework for the practical application of

the concepts of critical natural capital and strong

sustainability. Ecological Economics. 2003;44(2‒

3):165‒185.

[129] Neumayer E. Weak Versus Strong Sustainability:

Exploring the limits of two opposing paradigms.

Cheltenham, UK: Edward Elgar Publishing; 2003.

[130] Martinez-Alier J, Munda G, O'Neill J. Weak

comparability of values as a foundation for

ecological economics. Ecological Economics.

1998;26(3):277‒286.

[131] Flipo F, Schneider F, editors. Proceedings of the

First International Conference on Economic De-

Growth for Ecological Sustainability and Social

Equity. Paris, France. 18‒19 April 2008. Availalbe

from: http://events.it-sudparis.eu/degrowthcon

ference/en/.

[132] Martinez-Alier J. Socially Sustainable Economic

Degrowth. Forthcoming. In: Farley J, Malghan D,

editors. Beyond Uneconomic Growth: Ecological

Economics, and the Future of the Planet. London,

UK; Edward Elgar: Forthcoming.

[133] Rijnhout L, Schauer T, editors. Socially Sus-

tainable Economic Degrowth: Proceedings of a

workshop in the European Parliament on 16 April

2009 upon invitation by Bart Staes MEP and The

Greens / European Free Alliance. Available from:

http://icta.uab.es/99_recursos/1253869447872.pdf

[134] Kallis G, Kerschner C, Martinez-Alier J. The

economics of degrowth. Ecological Economics.

2012;84(0):172‒180.

[135] Solow RM. Intergenerational Equity and

Exhaustible Resources. The Review of Economic

Studies. 1974;41(5):29‒45.

[136] Smulders S. Endogenous Technological Change,

Natural Resources, and Growth. In: Simpson RDP,

Toman MAP, Ayres RUP, editors. Scarcity and

Growth Revisited: Natural Resources and the

Environment in the New Millenium. Washington,

DC, USA: Resources for the Future; 2005.

[137] Ayres RU. Theories of Economic Growth.

Fontainebleau, France: INSEAD; 1996.

[138] Barbier EB, Koch EW, Silliman BR, Hacker SD,

16

Wolanski E, Primavera J, et al. Coastal Ecosystem-

Based Management with Nonlinear Ecological

Functions and Values. 2008;319(5861):321‒323.

[139] Eisenack K, Scheffran J, Kropp JP. Viability analysis

of management frameworks for fisheries. Envi-

ronmental Modeling & Assessment. 2006;11(1):

69‒79.

[140] Bauer N, Baumstark L, Leimbach M. The

REMIND-R model: The role of renewables in the

low-carbon transformation—first-best vs.

second-best worlds. Climatic Change.

2012;114(1):145‒168.

[141] Stiglitz JE, Sen A, Fitoussi J-P, et al. Report by the

Commission on the Measurement of Economic

Performance and Social Progress. 2009.

[142] van den Bergh JCJM. The GDP paradox. Journal

of Economic Psychology. 2009;30(2):117‒135.

[143] Kubiszewski I, Farley J, Costanza R. The pro-

duction and allocation of information as a good

that is enhanced with increased use. Ecological

Economics. 2010;69(6):1344‒1354.

[144] Delong JB. Macroeconomics. Burr Ridge, IL,

USA: McGraw-Hill Higher Education; 2002.

[145] Daly HE. Allocation, distribution, and scale:

Towards an economics that is efficient, just, and

sustainable. Ecological Economics. 1992;6(3):185‒

193.

[146] Polimeni JM, Mayumi K, Giampietro M, Blake

Alcott. The Jevons Paradox and the myth of

resource efficiency improvements. Sterling, VA,

USA: Earthscan; 2008.

[147] Farley J. The Role of Prices in Conserving Critical

Natural Capital. Conservation Biology.

2008;22(6):1399‒1408.

[148] Commoner B. The Closing Circle: Nature, Man, and

Technology. New York, NY, USA: Knopf; 1971.

[149] Kuussaari M, Bommarco R, Heikkinen RK, Helm

A, Krauss J, Lindborg R, et al. Extinction debt: A

challenge for biodiversity conservation. Trends in

Ecology & Evolution. 2009;24(10):564‒571.

[150] IPCC. Climate Change 2013. The Physical

Science Basis Summary for Policymakers.

Geneva, Switzerland: United Nations; 2013.

Available from: http://www.ipcc.ch/.

[151] Anderson TL. Donning Coase-Coloured Glasses:

A Property Rights View of Natural Resource

Economics. Australian Journal of Agricultural and

Resource Economics. 2004;48(3):445‒462.

[152] Coase R. The Problem of Social Cost. Journal of

Law and Economics. 1960;3(1):1‒44.

[153] Benkler Y. Coase's Penguin, or, Linux and The

Nature of the Firm. Yale Law Journal.

2002;4(3):369‒446.

[154] Henry C, Stiglitz JE. Intellectual Property,

Dissemination of Innovation and Sustainable

Development. Global Policy. 2010;1(3):237‒251.

[155] Dealbook. Speedy New Traders Make Waves Far

From Wall Street. New York, NY, USA: New York

Times; 17 May 2010.

[156] Hudson M. Higher Taxes on Top 1% Equals

Higher Productivity. The Real News Network;

2011. Available from: http://therealnews.com

/t2/index.php?option=com_content&task=view&

id=31&Itemid=74&jumival=6000:.

[157] Bank for International Settlements. Triennial

Central Bank Survey; Foreign exchange turnover

in April 2013. Preliminary global results.

Available from: http://www.bis.org.

17