Economics and Ecological Engineering

Economics will always play an important role in any engineering field and its basic objective is
to generate alternative solutions or designs and to evaluate efficiently these alternatives with
economic criteria.

However, conventional economics has some limitations because they are not able to evaluate
environmental aspects. In order to improve the decision making, new forms of economics were
developed and applied in this field, ecological engineering.

In the following lines I will write about the recommendations for alternative accounting systems
for those best suited to the field of ecological engineering.

The future of society is a real issue, especially because the fossil fuels are definitely becoming
more expensive and limits to humanity are becoming apparent. Starting from people’s opinions
that either technology will compensate the lost or spent natural resources or either planet’s
capacity is finite and limited, the ecological engineering has a dual conception that makes it
correct and appropriate for either the technological optimist or the technological pessimist
position.

Classical economics perspectives on ecological engineering

The main goal of ecological engineering is to save money. The savings are mostly to occur,
especially when you use renewable energies because you drive the long-term dynamics of the
ecosystem part of the design.

Ecologically engineered systems often generate beneficial goods that have value as by-products
of the normal operation of the system. There are many opportunities to develop valuable by-
products from ecologically engineered systems because of the production capacity of
ecosystems. To some extent knowledge of business and marketing is essential along with
ecological engineering to develop these opportunities. The future will likely include more
multipurpose uses of ecological engineered systems, and policies that regulate by-products
should be critically examined.
The cost-benefit analysis is the most comprehensive(cuprinzatoare) form of financial assessment,
in which are considered all the costs and benefits of a project. In this analysis the costs and
benefits of each alternative design for a project are evaluated in the same units and then summed.
The strength of this approach is in the logic of summing costs and benefits to determine the best
alternative. The particular alternative with the best cost–benefit ratio represents the best
investment opportunity for either a private or public funded initiative.

Problems with conventional economics

Classical economics arise a lot of problems because it extends beyond the market system. The
environment provides to humans many good and services that are not accounted for by classical
economics. The money from goods that we sell from the environment don’t go back in the
nature. At the ecosystem and global levels, are not accounted for by the market system and thus
are largely considered to be free by humans. These values can be considered to be free as long as
humans do not drain(golesc, epuizeaza) the system. However, when the drain on the systems
becomes too great, the values must be accounted for and managed, or there is a threat of collapse
due to overuse.

However, even though conventional economics has limitations, in terms of assessing the
environment, it is useful. It does account for things that have markets, which allows for financial
analyses, and it is still the language of decision makers, which gives it practical utility. Thus,
conventional economics should not be abandoned but new ways of thinking are needed to
improve its utility during times of growing environmental impacts and resource shortages.

Ecological Economics

This field of ecological economics deal with the problems of accounting for the environment.

An interesting thing about economics and ecology is that both words start with the same prefix
“eco”, from the Greek “oikos”, which refers to household. Starting from the idea that these two
fields, economics and ecology, have some similarities, the experts hope to find some methods to
make better decisions in the future.
Life-support valuation of ecosystem services

The ecosystem provides to humans some elements that can’t be valued by economic system. The
life-support calculation approach was used in a classic paper on valuation of coastal wetlands.
This paper was important because it provided the first comparison of different methods for
calculation of ecosystem values. The life-support approach provided the highest estimate of
value.

The approach is to identify individual services that ecosystems provide to society and to estimate
their value based on methods that are more consistent with classical economics, such as the
“willingness-to-pay” approach. A fundamental difference between life-support and ecosystem
services revolves around using one number as a measure of value or breaking down a number of
individual measures of value (various ecosystem services).

Natural capital, sustainability and carrying capacity

Pricing natural capital, especially nonmarketable natural capital, is so far(pana acum) an

intractable(nerezolvata) problem. All that need be recognized for the argument at hand is that
natural capital consists of physical stocks that are complementary to human-made capital.

The first person who has talked for the first time about “ecological capital” was Wes Jackson in
his proposed revision of modern agriculture.

Another important topic in ecological economics is the creation of new kinds of economies that
are sustainable over long time periods. Ecological engineering can help society move towards
sustainability by reducing costs and by utilizing natural, renewable energy sources. The concept
of sustainable development covers many adaptations of society for long-term survival, of which
ecological engineering is one of several recent advancements. In this larger context, ecological
engineering can play an important role for society as a whole. Two definitions of sustainable
development are given below:

1. To live on renewable income and to not deplete(descongestiona, epuiza) natural capital

2. To provide for the needs of the present generation without sacrificing the ability of future
generations to meet their needs
The major challenge is to educate people in order to have sustainable lifestyles. Social
engineering is the greatest sustainability.

The carrying capacity of a system for humans is another approach of sustainabilty. The carrying
capacity can be definited as the capacity of the maximum number of individuals of a population
that can be stably maintained in a given environment. In wildlife, we can affirm that the carrying
capacity consists in the amount of food, water and cover avaible for the animals. If a carrying
capacity for humans could be established, then the limits to sustainability could be known. This
is a critical and controversial subject. One of the latest developments along this line of thought is
ecological footprint analysis which attempts to calculate the land and water areas required to
support human communities.

Emergy analysis

Emergy analysis is a new form of economics. Emergy or energy memory is a measure of

embodied energy in a product or process which in turn is a measure of its value. Emergy analysis
is an accounting system in which everything is accounted for with energy units rather than
money. Emergy analysis is an analytical technique that calculates values that can be used for
making decisions. This makes it one of only a few existing types of accounting systems. The
concept and method were developed by H. T. Odum, based on his earlier work on ecological
energetics.

This method is used to convert everything to one unit and after that used in decision-making
algortihms. Thus two major steps are involved. First, all flows and storages relevant are
quantified and coverted to emergy using published conversion factors called transformities.
Then, the emergy values are used in algorithms to make assessments and to provide perspective
for decision making. difficulties arise from several directions when attempting to implement
emergy analysis for public policy. It is a radical new form of economics because it is based on a
completely different currency than humans are familiar with. Emergy analysis represents a kind
of physical theory of value rather than a social theory of value, which seems to make it
objectionable to some people.

There are some major disagreements between conventional economics and emergy analysis
because accounting is focused on both human-centered and ecosystem-centered values.
Conventional economics does not do this completely, even with various kinds of adjustments
mentioned earlier; emergy analysis does, at least theoretically. This goal is achieved in emergy
analysis by utilizing a quantity, emergy, which can be calculated for both human-centered and
ecosystem-centered quantities, making it a “common denominator.” Conventional economics is
computationally sophisticated enough to account for both these quantities, but it philosophically
denies that certain kinds of values exist.

The ecological life-support system was taken for granted, and it was assumed that it didn’t need
to be accounted for. As populations grew, however, the environment became more important to
humans and new approaches have evolved to recognize this importance, sometimes through
accounting techniques with conventional economics and at other times through social
instruments such as regulations and public policies.

Related issues

Financing is one of the issues, because without money we can’t start a project. But, money are
not everything. Also, politics are a critical factor.

Regulation is an important factor because it documents and maintains system performance,

protects the environment, and ensures human health and safety. Ecological engineering projects
are regulated by government agencies, in various cases from city or county, to state, to federal
scales.

Patents(brevete, drepturi) The patent system is important not just because it protects the rights of
inventors but also because it promotes the progress of technology at the larger scale.

Ethics is a system of beliefs that provide self-imposed limitations on the freedom to act. These
codes provide guidance to engineers, especially in terms of understanding the consequences of
their actions on the health and safety of humans.