Product Market Economic Resource Market $ (Revenues) $ (Wages, Rent, Interest, and Profits) $ $ Goods and Services Goods and Services Land, labor, Capital, and Entrepreneurial ability Land, labor, Capital, and Entrepreneurial ability Biosphere Outputs: Wastes and pollution(to sinks) Input: Natural Resources and environmental services (Sources) Solar Energy BroaDer Circular Flow MoDel Harris Why Include the Ecosystem? Sources and Sinks Explained Failure of the Traditional Model Economics 12 Pennington Fall 2011 Households/ Consumers Businesses/ Firms “living our lives in such a way that we are not undermining the ability of the future generations to lead their lives, to sustain their needs”. ~The Brundtland Commission, convened by the United Nations Sustainability The standard model is inaccurate because it suggests that the real flow (resources and goods and services) and the counter monetary flow allow the cycle to be self perpetuat- ing and not need other inputs, which this is incorrect because the cycle needs energy inputs and waste/pollution flow out the system. In our current economic system the limits that our natural environment has are completely ignored; the system assumes that they are limitless as a resource and limitless in its capacity to absorb our waste. The inclusion of the ecosystem allows use to see the economy as part of a larger structure. Environmental economists taking a holistic approach by including the economic cycle with the environmental cycles like the carbon, nitrogen, water and life, and sources/sink cycle. This holistic approach focuses more on total energy flow and can measure carrying capacity as well as deliver the basic concept. Including the ecosystem also allows more valued to be placed on Sustainability. A source is the place or compartment from which a substance comes while a sink is the place or process that takes the substance out of circulation. For example, young growing forests are a carbon sink, while the burning of fossil fuels is a carbon source. ~Australian Academy of Science Waste Heat

Broader ecological flow model updated

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Page 1: Broader ecological flow model updated

Product Market

Economic Resource

Market

$ (Revenues)

$ (Wages, Rent, Interest,

and Pro�ts)$

$Goods and Services Goods and Services

Land, labor, Capital, and Entrepreneurial ability

Biosphere

Outputs: Wastes and pollution(to sinks)

Input: Natural Resources and environmental services (Sources)

Solar Energy

BroaDer Circular Flow MoDelHarris

Why Include the Ecosystem? Sources and Sinks Explained Failure of the Traditional Model

Economics 12Pennington

Fall 2011

Households/ Consumers

Businesses/Firms

“living our lives in such a way that we are not undermining the ability of the future generations to lead their lives, to sustain their needs”. ~The Brundtland Commission, convened by the United Nations

Sustainability

The standard model is inaccurate because it suggests that the real �ow (resources and goods and services) and the counter monetary �ow allow the cycle to be self perpetuat-ing and not need other inputs, which this is incorrect because the cycle needs energy inputs and waste/pollution �ow out the system. In our current economic system the limits that our natural environment has are completely ignored; the system assumes that they are limitless as a resource and limitless in its capacity to absorb our waste.

The inclusion of the ecosystem allows use to see the economy as part of a larger structure. Environmental economists taking a holistic approach by including the economic cycle with the environmental cycles like the carbon, nitrogen, water and life, and sources/sink cycle. This holistic approach focuses more on total energy �ow and can measure carrying capacity as well as deliver the basic concept. Including the ecosystem also allows more valued to be placed on Sustainability.

A source is the place or compartment from which a substance comes while a sink is the place or process that takes the substance out of circulation. For example, young growing forests are a carbon sink, while the burning of fossil fuels is a carbon source. ~Australian Academy of Science

Waste Heat