The world economics means literally ‘’management of life’’ and is derived from the same root (mimic; management) as economics, the term term that literally means ‘’management of the house’’. In most dictionaries economics is listed a synonym of ecology, but the word may now be appropriate for an expanded economics of the ecosystem in which monetary values, cost accounting, and management of natural process are included along with man’s works. Such a special or might not be needed if economists where enthusiastic about extending their traditional discipline to include the works of nature. Most economists express the opinion that there is more than they can cope with in man’s ‘’house’’ and that another discipline is needed to deal with the combined ‘’house’’ of man and nature. In any event, all agree that the time has come to put greater emphasis on the value of the work of natural systems and to the impacts, both good and bad, that are external to business operations.

      Table provides and example of how monetary evaluation of a natural system might be extended to include useful work performed be self maintaining ecosystems. Lines 1 and 2 represent conventional

four bases for economic evaluation of a tidal estuary.

  

Bases for economic evaluation, while lines 3 and 4 extend the valuation to include the capacity of the tidal estuary to assimilate wastes and to provide general lif support for man’s fuel – powered systems two values are shown for each line, an annual return and an income capitalized by dividing the annual return by an interest rate (5% or 0.05 in this case) a standard procedure in resource economics (see barlowe, 1965)

       Although natural seafood harvest and recreational values accruing from very large areas are impressive, they are small on an acre basis when compared with real estate values that the estuary might have if covert from its natural state to some developed state (as, for example, if the estuary was filled in for housing or factory development) oyster culture or other intensive aquaculture would increase some what the commercial return from the estuary. However, the estuary in its natural state has a much greater value to the public as a whole in terms of its waste assimilation capacity and general life support especially as the intensity of adjacent man made development increases. The waste assimilation value, as estimated in table, is based on the cost of tertiary treatment in treatment plants built and maintained by man. In other words, this is what it would cost society to treat wastes in amounts not exceeding the reasonable capacity of the estuary to metabolize treated municipal and nontoxic industrial wastes if the estuary was not available to do this useful work. The estimate for general life support was calculated by multiplying the total productivity of the estuary times and energy dollars conversion factor. One such conversion suggested by H.T. Odom (1971) is based on the ratio of the gross energy consumption and the gross national product (GNP) for the country or region in question. As would be expected, the energy/GNP ratio varies in different countries. In and energy conservative country such as New Zealand, that does not have a lot of heavy industry, about 7000 kcal of energy is consumed annually for each dollar of GNP. For the united states the energy dollar ratio has fluctuated between 10,000 and 25,000 kcal per dollar between 1945 and 1970. Using a conservative figure of 10000 kcal =one dollar and annual production rate for the estuary of 10,000 kcal m^-2 or 41 . 10⁴ per acre, then the annual return comes to $4100 and the long term value of an acre amounts to $82,000 (see line 4 table). Since ‘’productivity’’ is a measure of a natural system’s capacity to do all kinds of useful work, such as aster treatment, CO₂ absorption, O₂ production, seafood production, wildlife habitat maintenance, protecting cities from stomps, transportation, and on, then converting work energy to money is a convenient way of making a economic evaluation of a given natural system.

       In the example just given what might be called the ‘’social aloes’’ (lines 3 and 4 table) inherent in preserving a natural estuary exceed the immediate or short term commercial values. Unless the former values are recognized and appropriate action taken to preserve them, the pricing system based on incomplete accounting will tend to force an irreversible artificial development of estuaries, floodplains, watersheds, and prime farmlands even though it is in the general public interest that such areas continue to function a slife support ecosystems. The water situation briefly mentioned on post  is another example of how an urban dweller benefits from nature’s recycling work. The cost of water produced by a natural watershed is very much less than the cost of artificially recycled water.

     Putting a monetary value on the free work of nature does not solve the problem of the conflict of interest between the value to the property owner and the value to society where the area in question has a high social or public value in its natural state, but also a high real estate value if developed to something else. But at least this approach helps bring general recognition of values that are either not recognized or in danger of being lost through public apathy . for more on this approach see gosselink, odum, and pope (1974).

As alluded to in the discussion of pollution, environmental debits as well as assets need to be included in economic assessments, especially environment damaging residuals of manufacturing which in all but a very few countries escape control by the economy. A variety of incentives, sanctions, laws and governmental controls aimed at closing his dangerous gap In economic institutions are being discussed and tried out. Evidences of citizen concern are the increasing number of lawsuits aimed at halting pollution and what individuals and groups consider unwise alterations of the environment. In turn this has stimulated a judicial interest in cases involving the environment. Environmental law has become a new research and teaching focus in many law schools. From these largely uncoordinated efforts some generally agreed upon ground rules ill hopefully emerge. There is no shortage of good ideas for economic and judicial reforms if he number of new books and articles on the subject is any indication. A sample of these are listed in the ‘’suggested readings’’ list at the end of the book.

In the united states the national environmental protection act (NEPA) represents the first attempt to provide a nation wide legal basis for extending value systems to include the natural environment. The act requires that ‘’impact statements’’ be prepared for all large proposed man made alterations. Hopefully this admitted stop gap measure will lead to a total assessment procedure that includes environmental and social cost benefits along with purely economic ones.

Perhaps the ultimate solution to the problem of joining ecological and economic values is to adopt energy units instead of monetary units for all values. The value of goods and services can certainly be measured in energy in its as well as in dollars and cents; and, as we have seen, the value of the work of nature can best be expressed in energy  units. Perhaps energy will probe to be the basic ‘’currency’’ for the proposed new science of economics.