Regenerative Economic Theory
Encyclopedia
Regenerative economics is an economic system
that works to regenerate capital assets. A capital asset is an asset that provides goods and/or services that are required for, or contribute to, our well being. In standard economic theory, one can either “regenerate” one's capital assets or consume them until the point where the asset cannot produce a viable stream of goods and/or services. What sets regenerative economics apart from standard economic theory is that it takes into account and gives hard economic value to the principal or original capital assets — the earth
and the sun
. We cannot do much to affect the sun although we can value access to the sun in such areas where access can be influenced. Therefore, most of Regenerative Economics focuses on the earth and the goods and services
it supplies.
Regenerative economics is completely comfortable within the capitalist economic framework. Recognizing the earth as the original capital asset places the true value on the human support system known as the environment
. Not having this original value properly recognized has created the unsustainable economic condition referred to as uneconomic growth
, a phrase coined by Prof. Herman Daly
, as stated in the book Reshaping the Built Environment
. The authors of the regenerative economic theory believe that uneconomic growth is the opposite of regenerative economics.
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
that works to regenerate capital assets. A capital asset is an asset that provides goods and/or services that are required for, or contribute to, our well being. In standard economic theory, one can either “regenerate” one's capital assets or consume them until the point where the asset cannot produce a viable stream of goods and/or services. What sets regenerative economics apart from standard economic theory is that it takes into account and gives hard economic value to the principal or original capital assets — the earth
Earth
Earth is the third planet from the Sun, and the densest and fifth-largest of the eight planets in the Solar System. It is also the largest of the Solar System's four terrestrial planets...
and the sun
Sun
The Sun is the star at the center of the Solar System. It is almost perfectly spherical and consists of hot plasma interwoven with magnetic fields...
. We cannot do much to affect the sun although we can value access to the sun in such areas where access can be influenced. Therefore, most of Regenerative Economics focuses on the earth and the goods and services
Goods and services
In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax....
it supplies.
Regenerative economics is completely comfortable within the capitalist economic framework. Recognizing the earth as the original capital asset places the true value on the human support system known as the environment
Environment (biophysical)
The biophysical environment is the combined modeling of the physical environment and the biological life forms within the environment, and includes all variables, parameters as well as conditions and modes inside the Earth's biosphere. The biophysical environment can be divided into two categories:...
. Not having this original value properly recognized has created the unsustainable economic condition referred to as uneconomic growth
Uneconomic growth
Uneconomic growth, in human development theory, welfare economics , and some forms of ecological economics, is economic growth that reflects or creates a decline in the quality of life. The concept is attributed to the economist Herman Daly, though other theorists can also be credited for the...
, a phrase coined by Prof. Herman Daly
Herman Daly
Herman Daly is an American ecological economist and professor at the School of Public Policy of University of Maryland, College Park in the United States....
, as stated in the book Reshaping the Built Environment
Built environment
The term built environment refers to the human-made surroundings that provide the setting for human activity, ranging in scale from personal shelter and buildings to neighborhoods and cities that can often include their supporting infrastructure, such as water supply or energy networks.The built...
. The authors of the regenerative economic theory believe that uneconomic growth is the opposite of regenerative economics.