ABSTRACT
The relationships between economic and environmental issues can be viewed from a variety of perspectives. Ecological economics attempts to redefine basic economic concepts to make them more applicable to environmental problems. Unlike standard economic analysis, ecological analysis does not have a single methodological framework based on markets. One fundamental concept emphasized by ecological economists is natural capital. A central principle of prudent economic management is preservation of the value of capital. Standard national income accounting includes a calculation of the depletion of human-made capital over time. The natural capital concept further implies that a purely economic analysis cannot fully capture the stock and flow dynamics of natural resources. The basic laws governing behavior of natural capital elements such as energy resources, water, chemical elements, and life forms are physical laws described in the sciences of chemistry, physics, biology, and ecology. Standard macroeconomic theory recognizes no limitation on an economy's scale.
