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Steady State Economy

  • By: Federico Paolini
  • In: Green Business: An A-to-Z Guide
  • Edited by: Nevin Cohen & Paul Robbins
  • Subject:Sustainability, Environmental Policy & Law (general)

Steady state economy (SSE) refers to a theoretical economic system in which the world's population and natural resources remain practically constant through time. A steady state economy would be sustainable in that humans would not extract or deplete natural capital faster than the Earth's systems could replenish it.

Ecological economists, led by Herman E. Daly, posit that classical economic theories, which advocate infinite growth, are inconsistent with scientific reality. Businesses following classical economic theory essentially treat the Earth as an unlimited well of resources and sink for waste. SSE theory holds that since the Earth has limited natural resources, a continuous, unlimited growth of the gross domestic product would lead to the ultimate destruction of the natural resources indispensable for human life. Daly's theory of SSE ...

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