17
Economic Linkages to
Natural Resources
Daniel E. Chappelle
17.1 Introduction
17.1.1 Linkages of Environment to and
from the Economic System
Directly or indirectly, everything is connected to
everything else. We hear this trivial comment continually. It is true, of course, but linkages are so
complex that not much is known and the available
information is inadequate. Ecology focuses on
linkages in nature. What often is not recognized is
that economics focuses on linkages as well, many
of which extend back to nature. Ecological linkages and economic linkages are connected in important ways. Boulding (1970) even explored economics as an ecological science. Also, since about
1970, economists have become more concerned
about environmental quality. There are many recent inquiries regarding externalities in the form
of pollution and schemes to use market forces to
improve environmental quality (e.g., marketable
pollution rights). During the 1970s the subfield of
ecological economics began. This subfield has focused on nonmarket goods and services and pollution abatement, in contrast to resource economics, which has traditionally focused on production
of market goods and services (for an early example concerned with forestry, see Fernow, 1902).
It is evident, therefore, that both ecology and
economics are concerned with natural resource
linkages.
When we engage in ecological assessment, it is
clear that we must be able to quantify both ecological linkages and economic linkages. A traditional view of natural resource linkages to the economic system is as raw materials in primary
industrial production. These linkages are quantified
as dollar flows in national economic accounting
systems (i.e., income and product accounts and
input-output accounts). Data in economic accounts
are most detailed, but, from the standpoint of resource management, they provide little information
on ecological impacts because they do not quantify
in physical units or are provided at small geographical scales. From the standpoint of ecological
assessment, therefore, it is a matter of taking fragmentary data from economic accounts and connecting them with even more fragmented resource
and ecosystem data. The potential for errors in such
an approach is substantial and must be recognized.
However, in spite of any measurement difficulties, it is necessary to include quantification of economic impacts in an overall ecological assessment.
Without assessment of economic considerations, it
is impossible to evaluate impacts on humans. The
objective of this chapter is to suggest approaches
to accomplish this task.
In recent years linkages from the economic system to the ecological system have been highlighted
using various approaches. Flows of residuals back
to the environment constitute in the aggregate what
we term pollution. To the extent that the assimilative capacity of the environment is adequate to
process pollutants, damage to the environment is
negligible, although some species may be affected
either in a positive or negative way. When this capacity is exceeded, serious long-term damage may
result. When human population is sparse, the environmental assimilative capacity is generally
more than adequate to process flows of residuals.
As population increases, pollution tends to increase unless technology is brought to bear to reduce residual flows from production and consumption processes and steps are taken to increase
245
Economic Linkages to
Natural Resources
Daniel E. Chappelle
17.1 Introduction
17.1.1 Linkages of Environment to and
from the Economic System
Directly or indirectly, everything is connected to
everything else. We hear this trivial comment continually. It is true, of course, but linkages are so
complex that not much is known and the available
information is inadequate. Ecology focuses on
linkages in nature. What often is not recognized is
that economics focuses on linkages as well, many
of which extend back to nature. Ecological linkages and economic linkages are connected in important ways. Boulding (1970) even explored economics as an ecological science. Also, since about
1970, economists have become more concerned
about environmental quality. There are many recent inquiries regarding externalities in the form
of pollution and schemes to use market forces to
improve environmental quality (e.g., marketable
pollution rights). During the 1970s the subfield of
ecological economics began. This subfield has focused on nonmarket goods and services and pollution abatement, in contrast to resource economics, which has traditionally focused on production
of market goods and services (for an early example concerned with forestry, see Fernow, 1902).
It is evident, therefore, that both ecology and
economics are concerned with natural resource
linkages.
When we engage in ecological assessment, it is
clear that we must be able to quantify both ecological linkages and economic linkages. A traditional view of natural resource linkages to the economic system is as raw materials in primary
industrial production. These linkages are quantified
as dollar flows in national economic accounting
systems (i.e., income and product accounts and
input-output accounts). Data in economic accounts
are most detailed, but, from the standpoint of resource management, they provide little information
on ecological impacts because they do not quantify
in physical units or are provided at small geographical scales. From the standpoint of ecological
assessment, therefore, it is a matter of taking fragmentary data from economic accounts and connecting them with even more fragmented resource
and ecosystem data. The potential for errors in such
an approach is substantial and must be recognized.
However, in spite of any measurement difficulties, it is necessary to include quantification of economic impacts in an overall ecological assessment.
Without assessment of economic considerations, it
is impossible to evaluate impacts on humans. The
objective of this chapter is to suggest approaches
to accomplish this task.
In recent years linkages from the economic system to the ecological system have been highlighted
using various approaches. Flows of residuals back
to the environment constitute in the aggregate what
we term pollution. To the extent that the assimilative capacity of the environment is adequate to
process pollutants, damage to the environment is
negligible, although some species may be affected
either in a positive or negative way. When this capacity is exceeded, serious long-term damage may
result. When human population is sparse, the environmental assimilative capacity is generally
more than adequate to process flows of residuals.
As population increases, pollution tends to increase unless technology is brought to bear to reduce residual flows from production and consumption processes and steps are taken to increase
245