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K. Yang
The ecological modernization of economic mechanism includes enabling the
economy to make ecological self-adjustment and redirecting economic policies
according to ecological requirements.
Producers and consumers can benefit from the use of natural resources and environmental labor but don’t have to pay everything they have for it; rather they transfer
the subsequent results such as resource shortage and environmental pollution to the
society, to future generations and to nature. The existence of such externality is the
underlying cause for the loss of balance in man-environment system. For sustainable
development, we must internalize the externality of production and consumption and
let the producers and consumers that create the environmental problems pay the price.
We should also incorporate ecological views into all production and consumptionrelated decisions, and make environmental protection a conscientious action of all
producers and consumers. That’s what we call economy’s ecological self-adjustment.
How to achieve such self-adjustment is both a theoretical and a practical challenge. Current discussions are focused on the following directions: (1) setting fully
effective price and cost signals for natural resources and environmental labor based
on the marginal opportunity cost of resource depletion; (2) carrying out ecological
accounting on corporate level and national accounting level; and (3) finalizing plans
for carrying environmental responsibilities and compensating for environmental
damages through the court and legislation.
Traditional economic policies are based on the increase and distribution of manmade products and labor. They are biased and their goals, indicators, approaches and
organizations have to be redefined and supplemented according to the requirement
of sustainable development. To be more specific, first, the protection and increase
of natural capital should be included in the goal and indicator system of economic
policies, with sustainable development as the guiding principle for economic development. Second, unreasonable interference in agricultural product price must be
abolished and resource exploitation tax and pollution tax should be levied to complement economic policies. Third, macro-regulators should be made more conscious of
sustainable development, the capability of environmental protection departments
should be reinforced and EIA should be included in all major economic policies.
4. Controlled demographic change
The demographic change follows the Logistic curve and consists of five stages. In
the first stage, a Malthusian Equilibrium is reached in population as the high death
rate and high birth rate offset each other; or population doesn’t flow and is evenly
distributed under natural economy. In the second stage, population increases quickly
because of high birth rate but falling death rate; or population is rather concentrated as
natural economy disintegrates. In the third stage, birth rate falls quickly; or the speed
of population concentration quickly slows down due to dispersion. In the fourth stage,
death rate falls to a very low level and birth rate is basically on a par; or population
concentration and dispersion tend to reach an equilibrium. In the fifth stage, population size is quite stable as birth rate and death rate, or population concentration and
dispersion are in equilibrium. Experience shows that in the second and third stage,
K. Yang
The ecological modernization of economic mechanism includes enabling the
economy to make ecological self-adjustment and redirecting economic policies
according to ecological requirements.
Producers and consumers can benefit from the use of natural resources and environmental labor but don’t have to pay everything they have for it; rather they transfer
the subsequent results such as resource shortage and environmental pollution to the
society, to future generations and to nature. The existence of such externality is the
underlying cause for the loss of balance in man-environment system. For sustainable
development, we must internalize the externality of production and consumption and
let the producers and consumers that create the environmental problems pay the price.
We should also incorporate ecological views into all production and consumptionrelated decisions, and make environmental protection a conscientious action of all
producers and consumers. That’s what we call economy’s ecological self-adjustment.
How to achieve such self-adjustment is both a theoretical and a practical challenge. Current discussions are focused on the following directions: (1) setting fully
effective price and cost signals for natural resources and environmental labor based
on the marginal opportunity cost of resource depletion; (2) carrying out ecological
accounting on corporate level and national accounting level; and (3) finalizing plans
for carrying environmental responsibilities and compensating for environmental
damages through the court and legislation.
Traditional economic policies are based on the increase and distribution of manmade products and labor. They are biased and their goals, indicators, approaches and
organizations have to be redefined and supplemented according to the requirement
of sustainable development. To be more specific, first, the protection and increase
of natural capital should be included in the goal and indicator system of economic
policies, with sustainable development as the guiding principle for economic development. Second, unreasonable interference in agricultural product price must be
abolished and resource exploitation tax and pollution tax should be levied to complement economic policies. Third, macro-regulators should be made more conscious of
sustainable development, the capability of environmental protection departments
should be reinforced and EIA should be included in all major economic policies.
4. Controlled demographic change
The demographic change follows the Logistic curve and consists of five stages. In
the first stage, a Malthusian Equilibrium is reached in population as the high death
rate and high birth rate offset each other; or population doesn’t flow and is evenly
distributed under natural economy. In the second stage, population increases quickly
because of high birth rate but falling death rate; or population is rather concentrated as
natural economy disintegrates. In the third stage, birth rate falls quickly; or the speed
of population concentration quickly slows down due to dispersion. In the fourth stage,
death rate falls to a very low level and birth rate is basically on a par; or population
concentration and dispersion tend to reach an equilibrium. In the fifth stage, population size is quite stable as birth rate and death rate, or population concentration and
dispersion are in equilibrium. Experience shows that in the second and third stage,