Chapter 9: Eco-Efficiency Indicators: Theory and Practice
9. Eco-eﬃciency indicators: theory and practice INTRODUCTION Broadly speaking, eco-eﬃciency is measure of the eﬃciency or eﬀectiveness with which natural capital is transformed into human-made capital. As explained in Chapter 6, the need for eco-eﬃciency indicators arises because, in the event that the ISEW, GPI or SNBI is falling, it is diﬃcult to know if the fundamental cause is declining eﬃciency or, if the opposite is the case, whether the rate of increase in resource use eﬃciency is less than the rate of macroeconomic expansion (i.e., the Jevons’ Paradox). This dilemma was borne out to some degree in the previous chapter – that is, Australia’s Fisherian income merely suggested that the Australian macroeconomy as at 1974 was preferable in physical scale to that of 1997. But it did not provide a deﬁnitive answer. To obtain something much closer to that, a measure of eco-eﬃciency is required. Given the conclusions drawn from the coevolutionary paradigm in Chapter 2, it is clear that eco-eﬃciency indicators must be developed on the basis of various understandings. While many such understandings exist, the number can be reduced to the following shortlist: (a) natural capital and human-made capital are complements, not substitutes; (b) humankind cannot overcome its dependence on the natural environment by ‘dematerialising’ economic activity; and (c) since humankind cannot control the evolutionary pathway of the global system, eco-eﬃciency solutions must be in keeping with a coevolutionary worldview. It will be argued in this...
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