Daly, Herman. 1990. "Commentary: Toward some operational principles of sustainable development." Ecological Economics 2(1990): 1-6.

Thesis:

"Since the human economy is a subsystem of a finite global ecosystem which does not grow, even though it does develop, it is clear that growth of the economy cannot be sustainable over long periods of time" (p.1).

Summary:

Daly begins by distinguishing between 'sustainable development' and 'sustainable growth.' "Growth is quantitative increase in physical scale while development is qualitative improvement or unfolding of potentialities" (p.1). Since we have limited resources, continued growth cannot be sustained, and thus, "sustainable growth should be rejected as a bad oxymoron" (ibid.)

Sustainable development has been a focus since the release of the Brundtland Commission Report in 1987. However, since the Commission needed to maintain unity of political interests, it sacrificed critical attention to "glaring contradictions" in its own report. Daly argues that it is impossible to respect ecological limits and to have growth in the world economy by a factor of 5 or 10, as the report recommends. Where the report was useful in providing a political opening for dialogue, more consistent and operational principles are needed.

Sustainable development requires (1) that harvest rates should equal regeneration rates and (2) that waste emission rates should equal the natural assimilative capacities of the ecosystems into which the wastes are emitted (p.2). These regenerative and assimilative capacities are 'natural capital'. Natural capital and human made capital should be managed at optimal levels, which can be maintained over a very long time. The question becomes, 'what is the proper mix of natural and manmand capital, and are they complements or substitutes?' Daly argues that they are basically complements, and only very marginally substitutable (p.3). Just as bigger fishing nets can't be substituted for a greater stock of fish, the "material transformed [natural capital] and the tools of transformation [manmade capital] are complements, not substitutes" (p.3). Natural capital as an absorber of waste is also complementary to the manmade capital that generates waste.

With this distinction made, it becomes clear that development is limited by the stock of capital that is in shortest supply. In our world of 'full world economics', natural capital is rapidly becoming the limiting factor (p.4).

Next Daly addresses the use of non-renewable resources in light of sustainability. He holds that they can be exploited in a "quasi-sustainable manner by limiting their rate of depletion to the rate of creation of renewable substitutes" (p.4). Whether discussing renewable or nonrenewable resources, the aim is to limit resource throughputs, and to emphasize technologies that increase the amount of value extracted per unit of resource, rather than increasing the throughput itself (p.5).

From a macroeconomic perspective, population times per capita resource use must remain within the limits of the region's carrying capacity without resorting to non-regenerated capital consumption (p.5). Thus, "quantitative growth in populations of both people and commodities must ultimately end, but qualitative improvement can continue in a regime of sustainable development" (p.5). Daly concedes that fighting poverty will be more difficult without growth. This will mean greater focus on population control in developing nations, and greater focus on over-consumption in wealthier nations, and the redistribution of wealth. Economic growth becomes "anti-economic growth" when optimum scales of consumption are exceeded (p.5).

Keywords: natural capital, human made capital, substitutability, complementarity, sustainable development, carrying capacity