Target Flow Rates

The first aim of this section's analytical tools is to modify ENL's conclusions regarding production by taking ecological constraints into account and determining target output quantities. The second aim is to establish target rates for natural flows.

It is important to distinguish this task from the treatment of environmental budgets. An environmental budget is the maximum permissible rate for a biological flow.

What is being sought here is not the maximum rate, but the rational rate, which must apply not only to biological flows, but to all natural flows — both biological and nonrenewable.

ENL's analysis establishes that, if an output's target quantity is its ecological limit, then the biological flow associated with this limit should be used at this particular rate. In the example of houses, the target output quantity is 15,000 houses because of habitat destruction. We thus know that the target rate for this specific flow is the habitat destruction associated with the construction of 15,000 houses.

However, this tells us nothing about the flow rate for wood. The share limit for wood is 25,000 houses, but because we can build only 15,000 houses, the wood for 10,000 houses is unneeded.

The target flow rate for wood is not the maximum as specified by the budget share, but the actual rate required for the target output quantity of 15,000 houses.

The following figure shows the overall logic that must be applied here, for a single final output.

 Target rates for natural flows Target rates for natural flows are determined by estimating the flows required for the target quantities of associated intermediate and final outputs, at the maximum achievable ecological efficiencies.

At top left is the final output's optimum quantity, and to its right is the output's ecological limit. These two establish the final output's target quantity. Once the target quantity is known for each final output, we can determine the target quantity for each associated intermediate output. Such an output incurs input cost but does not result in effectual value, so it is impossible to establish its target quantity directly.

The rule for establishing the target quantity is similar to that for establishing the optimum quantity for an intermediate output: it is the minimum quantity required for the target quantities of all associated final outputs.

The preceding diagram shows only a single final output for simplicity, but it should be kept in mind that numerous final outputs may contribute to the determination of an intermediate output's target quantity.

What the above implies is this: the target rate for any natural flow is the minimum rate required for the target quantities of its associated final and intermediate outputs, at the maximum achievable ecological efficiencies.

The target rate for the economy as a whole results from extending this principle to the economy's total outputs.

This conclusion is one of the features that distinguishes ENL from ecological economics.

ENL establishes maximums for the three biological flows in order to avoid threshold violations, and establishes targets for all four natural flows in order to minimize the economy's impact on nature and resources.

Ecological economics, in conjunction with the physical sciences, sets appropriate maximums for the biological flows, and these have been adopted by ENL. However, the field is silent about targets — that is, not the maximums we can use based on ecological limits, but the minimums we should use based on human optimizations.

The reason for this reticence is that ecological economics does not independently address human gains and thus has no way to optimize output quantities — instead it relies on capitalist markets for this purpose. Lacking such a method, the field can only discuss the maximums that nature will permit.