Ecological pricing and economic efficiency

B. Hannon

Research output: Contribution to journalArticlepeer-review


There is a need to accurately account for the contributions of environmental assets to the overall economy. Such accounting would permit policies that allow protection of important natural resources and aid the analytic process to determine an accurate basis for a sustainable economy. The aim is to develop an accounting framework for ecology that is sufficiently consistent with the economic framework that the two can be fruitfully combined. With appropriate definitions of the flows, the two systems can be connected into a common framework. No single measure of the system productivity and efficiency can be given for the combined system, however, until the ecosystem metabolism can be converted into economic terms. This could be done with a series of economic valuation techniques. Ecological prices could then be estimated and a single measure of ecological economic output could be given. With the net combined system input and output now in common terms, a technical system efficiency measure can logically be proposed. Because human activity inevitably involves dissipation, such emissions would now have a monetary price. Because such emissions are irrecoverable, the total output of the combined system is greater than it is under the current definition, giving rise to a technical system-wide efficiency measure.

Original languageEnglish (US)
Pages (from-to)19-30
Number of pages12
JournalEcological Economics
Issue number1
StatePublished - 2001


  • Economy
  • Ecosystem
  • Input-output
  • Prices

ASJC Scopus subject areas

  • General Environmental Science
  • Economics and Econometrics


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