Regenerative economic theory
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Regenerative economics is an
Regenerative economics is based on the notion of the earth as the original capital asset, and so places value on the
Regenerative economics vs classical economics
Interdisciplinary Systems
Our world is a product of flow networks. Flow networks are interdependent on multiple components, such as energy and natural resources, and they are also known as systems. The health and viability of systems are determined by the resiliency of the subsystems within them. As such, a "regenerative" system is composed of subsystems are able to renew or sustain itself.[2]
Economics
Economics is a discipline that studies the allocation of resources in the context of scarcity, and there are interdisciplinary application of economics, such as the environment. The most widespread definition of economics involves the allocation of wealth, in the context of the human monetary system.[3] Economics rely on various subsystems, such as communities, businesses, resources, and money. Since economics rely on the world's natural resources, economic systems and ecosystems are interconnected.
Traditionally, economics in financial institutions do not account for all of the
Regenerative economics
Regenerative economics combines the concepts of economics and the values of a self-sustaining and self-renewing system. By doing so, it enhances the resiliency of the economic system.[2] The regenerative economics works to account for social costs and values that may be traditionally unaccounted for, including: [2]
- Cross-scale circulation of resources and information
- Adequate investment in capital
- Emphasis on using renewable resources in a circular economy
- Diversification of business sizes
- Systemic benefits
- Learning processes
There are four components of regenerative economics —circulation, organizational structure, relationships and values, and collective learning.[2] Circulation refers to the flow of resources, such as money, information, and energy sources. Organization structure determines how the flow of circulation, either by enhancing or inhibiting flow. Relationships and values determine the operations and efficiency of circulation. Collective learning supports strength of the system. All four components are interdependent and encompassing, and contribute towards a regenerative economy.[2]
Principles of Regenerative Economics
The following are the ten principles of regenerative economics. [2]
- Maintain robust, cross-scale circulation of critical flow
- Regenerative re-investment
- Maintain reliable inputs
- Maintain healthy outputs
- Maintain a healthy balance of integration of organizations of all sizes
- Maintain a healthy balance of resilience and efficiency
- Maintain sufficient diversity
- Promote mutually-beneficial relationships and common-cause values
- Promote constructive activity and limit overly-extractive and speculative processes
- Promote effective, adaptive, collective learning
Regenerative economics works to strengthen of the world's systems by systemic issues, driving innovation, and learning.
Sustainability Goals
Regenerative economists believe that the most important ways to achieve sustainability are to restructure the economy and to create a widespread culture that promotes sustainable activity and cooperation. Unlike more conventional approaches to conservation and sustainability, it focuses less on mitigating the effects of human activity and more on changing human behavior to minimize impact.[4][5][6] Specifically, it states there needs to be a focus not only in addressing systematic problems but also to strength human and ecological wellbeing.[6] Transforming the economic system to become more sustainable requires more than just reallocating the money supply or strengthening the roles of financial regulators. It involves challenging the socio-ecological system — concentration of resources, transparency of financial systems, governance structures, and the health of the planet.[3][6]
Alternative frameworks
There are other frameworks to address the challenges the current economic system.
Ecological economics is also an interdisciplinary field used to address environmental and economic problems. It focuses on setting systematic limits to the current economic system, unlike regenerative economics' focus on reproduction of life in nature.[6]
Circular economy is an economic model that emphasizes maximizes the use of resources for as long as possible.[6]