Economics of Sustainability: Key Concepts and Approaches

Sustainable Economics Approach

Organizes economic systems for environmental health and equity.

Ecosystem Services Valuation

Assigns economic value to natural resources and services.

Intergenerational Equity

Future generations' rights to resources and stable climate.

Discount Rate

Converts future costs/benefits to present value.

Negative Externalities

Costs affecting others not reflected in transactions.

Positive Externalities

Benefits affecting others not reflected in transactions.

Sustainable Development

Meets present needs without compromising future generations.

Triple Bottom Line (TBL)

Evaluates economic, environmental, and social impacts.

Genuine Progress Indicator (GPI)

Adjusts GDP for social and environmental costs.

Human Development Index (HDI)

Measures well-being and includes planetary pressure adjustments.

Natural Capital

World's stock of natural resources providing ecosystem services.

Green GDP

GDP adjusted for environmental degradation costs.

Circular Economy

Design to minimize waste and regenerate ecosystems.

Ecological Footprint

Measures overuse of Earth's resources.

Climate Change

Global externality affecting all nations and ecosystems.

Policy Instruments

Tools to internalize environmental costs and promote sustainability.

Green Finance

Investments aligned with environmental and social governance.

Post-Growth Economics

Focuses on degrowth and sustainable resource use.

Carbon Tax

Pigouvian tax aimed at reducing carbon emissions.

Cap-and-Trade Systems

Market-based approach to control pollution levels.

Game Theory

Analyzes strategic interactions in public goods provision.

Climate Justice

Equity in addressing climate change impacts.

Product as-a-Service Models

Leasing and sharing to reduce resource consumption.

Environmental Regulations

Laws aimed at protecting the environment and public health.