Ecological economics was developed principally to address issues of sustainability. In fact, the International Society for Ecological Economics (ISEE) asserts that the "Society facilitates understanding between economists and ecologists and the integration of their thinking into a transdiscipline aimed at developing a sustainable world" (International Society for Ecological Economics, 2002).
The roots of the concern for the ecological sustainability of an economic system can be traced back to Physiocratic and Classical economic thinking23 (van den Bergh, 1 996). Contemporary concern for environmental limits can be said to have emerged from the history of post-war environmental concern (Davison, 200 1 ) and influential analyses such as the Limits to Growth
(Meadows et aI ., 1 972) and Blueprint for Survival (The Ecologist, 1 972). In the latter article a distinguished panel wrote that our "industrial way of l ife with its ethos of expansion is not
'sustainable' " (cited in Basiago, 1 995, p. 1 1 0).
More recently, the concept of 'sustainable development' was popularised by the B rundtland Report as a guideline for economic and environmental policy (World Commission on Environment and Development, 1 987). Since then, the term has become a key concept 10
modern environmental policy analysis and ecological economics (van den Bergh, 1 996).
So what are 'sustainability' and the popular variant 'sustainable development'? Few words have suffered as much attention as these terms. Costanza and Patten ( 1 995, p. 1 93) state that the "basic idea of sustainability is quite straightforward: a sustainable system is one which survives or persists." But the question remains : what is to be sustained?
22 It is beyond the scope of this thesis to examine the sustainability discourse in exhaustive detail. For
excellent reviews refer to Davison (200 1 ) and Pezzoli ( 1 997).
23 In particular, several classical economists addressed the issue of sustainability including Malthus, Mill, Jevons and Ricardo.
The term 'sustainable development' answers this to an extent by focusing the issue onto sustaining the economic/social system. According to Pezzoli ( 1997, p. 549) the most widely used definition of sustainable development comes from the Brundtland report:
"sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs " (World Commission on Environment and Development, 1 987, p. 87).
Despite the WCED defmition and the abundance of l iterature on the topic, the meaning of sustainable development remains far from clear-cut (Dixon & FaUon, 1989; Holmberg &
Sandbrook, 1992; Pezzoli, 1 997; Toman, 1992). Indeed, Davison (200 1, p. 37) in his erudite review of sustainable development states that any "intellectual clarity in sustainable development discourses is superficial and deceptive." Common and Perrings ( 1 992, p. 7) attribute the lack of agreement to, in part, differences in disciplinary perspectives.
From an ecological economic perspective, two relevant disciplinary perspectives can inform an understanding of sustainable development24 - ecology and economics. Ecological economics provides a synthetic perspective that attempts to integrate and build on these two approaches to sustainable development.
Ecological economics acknowledges that the neoclassical economic approach to sustainable
dev�lopment (the so called weak sustainability25) offers a precise definition of sustainable
development. However. weak sustainability is limited from an ecological economics
perspective because of, inter alia. its assumption of capital homogenei ty. Weak sustainabi l ity
implies keeping the total ( i .e. natural. human-made. human. social) capital constant. This is tantamount to assuming all forms of capital are perfectly substitutable. Pearce and Turner ( 1 990) challenge this assumption and present five reasons why capital substitution i s often impossible:
• Natura l capital i s often required to produce h u man-manufact ured capital . Human manufactured c<lpital is not i ndependent of natural capit a l :
• Natural capital ful fi l s many crucial economic functions that human-manufactured
capital cunnot simulate. slIch as l i fe-support systems:
,":.l l3asi:lgI I ( J l.J95 ) and 1-\�/7.,( ll i ( 1 ')1)7 ) provided the acadl!lllic \\'l )rld a �cr\'i':l� hy al\empling III �rl)llp �uSlainahility i nterprdations in an nrdacd way, In partil'ular. I\:zwli ( 1 997 p . .'i."i-l ) catcgl ll'ises the
litcrature nn sll�tai nable devclopment defi nitions illlt ) ten categories, It is lIot the nhjcl,tivc I ll' this t hcsi� tu repeat Pezz(}Ii' s work on all ten l:atl!gories, Rather. thi:; thesis wi 11 concentrate O I l the intc.rpretations of sustainable development that are most relevant to the notion of eco-efficiem:y -economic. l!cological and
ecological economiL: L:ategories.
2, See Common ( 1 995. pp. 40 -49 ) tiH a detailed disclIssion llf weak slIstainahi lity based on t he Hartwick
rule.
• Natural capital provides resilience to environmental shocks experienced by the
economic system, and therefore, provides for a more sustainable society;
• Considerations of intergenerational equity require that natural capital stock be
maintained over time so as to ensure broadly equal access to it by different generations;
• Conservation of the natural capital stock is consistent with a world view that recognises
the rights of other species to co-exist with humans.
In the place of weak sustainability, Pearce and Turner ( 1 990) recommend a definition of sustainable development that focuses on maintaining natural capital constant (referred to as 'strong sustainability'). While more palatable from an ecological economic perspective, strong sustainability suffers from significant measurement problems.
In contrast, ecologists address sustainability at various levels of organisation ; the biosphere, ecosystems, community and population. From the biosphere-level literature (see Carson, 1 962; Ehrlich, Ehrlich, & Holden, 1 973; Hardin, 1 968; Meadows et al., 1 972) a clear definition of ecological sustainability has emerged. Ecological sustainability requires humans to live within the carrying capacity of the biophysical environment (Patterson, 2002).
Common and Perrings ( 1 992, p. 8) draw on the work of Holling ( 1 973; 1 978) to show how ecological theory of communities and ecosystems can help to define sustainable development. In general terms, Holling applies a systems approach to distinguish between two levels of stability. Stability is defined as the propensity of populations within an ecosystem to return to an equilibrium condition. Resilience, on the other hand, "is defined as the propensity of a system to retain its organisational structure following perturbation" (Common & Perrings, 1 992,
p. 1 6). Holling-resilience is the broader of the two terms; it refers to the stability of a system in the face of disturbances.
The Holling-resilience of a system is linked to the ability of that system to maintain its 'self organi sation' in the face of dynarnic26 change. That is, its ability to absorb stress, without undergoing some 'catastrophic' change in organisational structure. It follows from this perspective that a system can be said to be sustainable (or Holling-sustainable) "if and only if, it is Holling-resilient" (Common & Perrings, 1 992, p. 1 8) . The concept of Holling-resilience is widely used as a definitional basis for ecological sustainability (Patterson, 2002).
26 HoJling ( 1 973) suggests there are four phases that describe the dynamics of ecosystems: exploitation
(the early phase of ecosystems development dominated by opportunistic pioneer species); conservation (where the ecosystem consolidates and is relatively stable); release (ecosystem breakdown due to some external perturbation); reorganisation (at this stage the ecosystem can return to the same equilibrium point or flip to another equilibrium point). HoJling summarises these four phases in a 'figure-8' diagram.
The notion of Holling-sustainability can be criticised from several fronts. This approach privileges the system over its component parts, which i s itself a value judgement. It i s also a physical concept (as opposed to social, political or cultural) deriving from the condition of the stability of ecosystems. To some, such a physical approach is an anathema because it ignores the importance social, political and cultural institutions play in sustainable development.
A review of ecological economic literature suggests a tendency to adopt a ' synthetic' approach to sustainable development that draws on ecological and economic theory. Ecological economics acknowledges that the neoclassical economic approaches to sustainable development offer precise definitions. However, weak sustainability is limited by the simplifying assumptions that the definition relies on (principally capital homogeneity), and strong sustainability suffers from measurement difficulties. On the other hand, the ecological perspectives are imprecise "beyond the injunction to maintain the functioning of the ecosystems ... that support life" (Common, 1 995, p. 55). Further, ecological theory does not emphasise the importance of human society.
Ecological economic literature draws on its biophysical view of the economy and synthesises ecological and economic perspectives of sustainable development. Ecological economics provides a perspective that necessarily involves imprecision, and acknowledges that there is no
'blue-print solution' to the issue of sustainable development. This view is pragmatic:
rather than attempting to prescribe a general solution, the appropriate approach is to address particular problems in the light of such knowledge as is available on how the total system junctions, and an explicit recognition oj the fact that such knowledge is
necessarily incomplete, imperfect and changing over time " (Common, 1995, p. 55).
Rather than provide a definitive definition, ecological economic literature identifies several characteristics of an ecological economic approach to sustainable development. These include: # the common notion that intergenerational equity lies at the core of the concept of
sustainable development (Holmberg & Sandbrook, 1 992);
an acknowledgement of the biophysical basis of economic activity. Since economic activities require inputs of materials and energy and result in the production of waste, sustainable development must consider the biophysical environment as a source of inputs and a sink for wastes as a determinant for l ong-term economic well-being (Ruth,
1 993, p. 84);
an anthropocentric focus (Common, 1 995). This acknowledges that the resilience of the biosphere is important but not the only obj ective. Human requirements are pre eminent;
• a precautionary approach. In the presence of uncertainty and complexity an ecological
economic perspective of sustainable development adopts a precautionary approach to the future;
• the need for a transdisciplinary approach (discussed below) to addressing sustainable development (Lotspeich, 1 995, p. 2);
• an acknowledgement of the complexity of sustainability issues. Sustainable development covers a much broader ground than environmental protection, as is sometimes erroneously thought (van den Bergh, 1 996). Instead, sustainable
development involves three hierarchically inter-related problems. These are: ( I ) a sustainable scale of the economy relative to its ecological life-support system; (2) a fair distribution of resources and opportunities, among present and future generati on s and (3) and the allocation of resources over time that adequately account for natural capital (Norton, Costanza, & Bishop, 1 998, p. 1 94).
This eclectic approach to sustainable development can be criticised as it apparentl y lacks specificity and the ability to prescribe a course of action necessary for achieving sustainable development. However, this apparent looseness is misleading. A defining characteristic of an ecological economic approach to sustainable development is a focus on the problems themselves, rather than the particular intellectual tools and models used to solve them. As Costanza et al. ( 1 99 1 , p. 3) state ' we must transcend the focus on tools and techniques so that we avoid being "a person with a hammer to whom everything looks like a nai l ." This stance leads to an approach that suggests action must be taken on a case-by-case basis. Given the dynamic and uncertain nature of economic-environmental interactions, this pragmatic approach has merit.
Sustainable development and eco-efficiency
The linkage of efficiency in general and sustainable development was perhaps most famously articulated in Our Common Future (World Commission on Environment and Development,
1 987, p. 2 1 3). This document urged that "industries and industrial activities should be encouraged that are more efficient in terms of resource use . . . . " In fact, eco-efficiency is l inked to the concept of sustainable development in several important ways27.
27 Some criticise this link because eco-efficiency can be seen to cement in a narrow 'techno fix' approach to sustainable development (Davison, 200 1 ). The debate over the appropriateness of this technological optimism and the wisdom of tying eco-efficiency to such an approach are addressed in Chapter 3 (see section 3.5.2).
First, eco-efficiency is often presented as a strategy for enhancing sustainable development (see for example Pearce & Turner, 1 990, p. 48; Templet, 1 999, p. 223). This view is clearly made by several prominent ecological economists. For example, Herman Daly ( 1 99 1 , p. 44) states "technological progress for sustainable development should be efficiency-increasing rather than through-put increasing." John Peet ( 1 992, p. 1 75) also suggests "we must learn to perform our productive tasks, whatever they may be, in ways that minimise waste and maximise efficiency in the use of physical resources." However, it must be acknowledged that eco-efficiency is not a sine qua non for sustainable development. Rather, eco-efficiency (and efficiency in general) is a necessary but not sufficient condition for sustainable development28 (Choucri, 1 995 ;
Organisation for Economic Co-operation and Development, 1 997). This is partly because eco efficiency essentially deals with flows not stocks. That is, improved eco-efficiency can reduce the flow of resources through the economy. But, eco-efficiency cannot stop the depletion of finite natural resource stocks. For this reason, the OECD ( 1 998, p. 1 6) states that "eco efficiency is an essential element, but not the whole, of sustainable development."
Second, efficiency of resource use is also often used as a measure of progress toward sustainable development. For example, the OECD ( 1 998, p. 39) recommended eco-efficiency measures "to indicate the kind of change that is needed .. . in order to move toward sustainable development."
Finally, Choucri ( 1 995, p. 46) argues that eco-efficiency is an integrating principle. Eco efficiency is a microcosm of ecological economics as it seeks to combine economics with ecology. In the words of Choucri ( 1 995, p. 46) "eco-efficiency seeks to recognise economic efficiency with ecological resilience." Other authors claim that the strength of eco-efficiency is its ability to combine technology with ecological and economic goals (O'Riordan & Voisey,
1 998, p. 5). When deal ing with complex sustainabiJi ty issues in general, and eco-efficiency specifically, ecological economics' attempt to promote pluralism and draw on different perspectives is important.