Economic and Environmental Alignment

Scientific American has a great 60-second podcast about the possibility of aligning economic and environmental well-being.  There seems to be two main ways of viewing the connection between the environment and the economy:

1. They measure different things, so they will never be aligned.  The economy is concerned with human well-being, while environmental health encompasses much more, such as owls.  If some virus wiped out every last human on the globe, it would be incredibly beneficial for environmental health, and yet the economy would be in for some rough times.

2. The economy is contained within the environment, so they are always aligned, whether our econometrics show it or not.  In this view, measures of wealth such as GDP are imperfect because environmental costs and benefits aren't registered, even though we experience their impact on a daily basis.

Both approaches identify important truths.  The first approach is technically correct, but in reality proponents of this idea seem to think it justifies massive unsustainable extraction and destruction of the environment.  The second approach is correct in claiming our economic system doesn't do a very good job of measuring environmental costs and benefits, but is usually employed in some Utopian argument about the need to engineer a "true cost" economy.

Here's how I view the relationship.  The economy is a more important and profound concept, measuring human well-being (imperfectly).  Yet currently the economy is located entirely within the environment of earth, and so in actuality it is totally dependent upon some minimum level of environmental health.  Conservatives are right in asserting that in principle the concept of the economy is more important than environmental health, yet they underestimate the degree to which the economy is reliant upon the environment.  Environmental health may be instrumental to our human well-being, but identifying that doesn't make it any less important.  Until we colonize space, the economy is totally reliant upon the earth's environmental health, so we'd better maintain it.  Internalizing environmental health into our economic system is a pragmatic solution, even if it is philosophically questionable.

3. There is a third way to view the relationship that doesn't get much coverage: a temporal approach.  In this view, the economy and the environment are not aligned in the short term.  We can increase human well-being at the expense of environmental health, but only for so long.  In the long-run, human well-being is totally dependent on environmental health (that is, until we get into space).