Beyond the Cowboy Economy: Proposing Teaching and Research Agendas for Ecological Economics

Abstract

This article presents an initial effort to systematize two interrelated research fronts within ecological economics (EE): ecological microeconomics and ecological macroeconomics. In response to the field’s transdisciplinary and plural nature—attributes that, while enriching, may limit its political influence—the article proposes a conceptual delineation of these two domains as a means to strengthen EE’s analytical identity and facilitate dialogue with other economic approaches. Ecological microeconomics focuses on the material and energy intensity of economic activity, the complementarity of natural capital in production processes, and the redesign of consumption and firm behavior under ecological constraints. Ecological macroeconomics, in turn, centers on the biophysical limits to growth, the concept of sustainable and optimal scale, and the integration of environmental variables into macroeconomic indicators and policy frameworks. The article argues that both fronts, despite their distinct emphases, are united by the need for long-term structural change and a normative commitment to sustainability. Together, they offer a coherent basis for rethinking prosperity within the ecological boundaries of the Earth system.

1. Introduction

Kenneth Boulding [1] emphasized the need to incorporate the notion of limits into economic theory. As early as the 1960s, he and other authors drew attention to the increasing environmental degradation resulting from the intense economic growth that followed World War II. The Limits to Growth report, published by the Club of Rome [2], laid the foundation for a debate that remains unresolved more than fifty years later. Are economic growth and environmental preservation compatible? Which analytical categories of economic theory are, or should be, used to properly address this issue? These questions do not have definitive answers. Even after five decades since the first United Nations (UN) Conference on the Human Environment, held in Stockholm in 1972, environmental issues continue to provoke contention within economic theory, despite a broad consensus on the need to incorporate them.

One could argue that the core of the environmental debate since the mid-20th century has been the potential compatibility between economic growth and environmental preservation. The idea of sustainability, elevated to the status of a shared value for humanity [3], has become a mantra repeated by academics, policymakers, and activists alike. Concerns about the future of humanity have spurred international efforts to create institutional mechanisms aimed at curbing the rapid deterioration of living conditions, in the face of escalating biodiversity loss and the climate emergency [4].

The intensity of this debate was instrumental in driving important developments within the field of economics. In the latter half of the 20th century, environmental economics (EEc) emerged as a consolidated neoclassical field focused on providing sound economic policy responses to mitigate the welfare losses caused by negative environmental externalities. The integration of environmental concerns into the analytical framework of conventional economic theory can be seen as a typical example of a “mainstream flood” [5].

The dissatisfaction with the excessive reductionism and economicism that marked the treatment of the nature–society–economy nexus eventually led, in the late 1980s, to the emergence of ecological economics (EE), conceived as a research field or a “scientific stream” that is transdisciplinary and pluralistic, capable of transcending the boundaries of both conventional economics and ecology [6]. Starting from the principle that both disciplines share a common object of study—the oikos (home)—EE seeks, through its distinct ontological and epistemological lens, to reconcile the trajectories of economic and ecological analysis in order to offer a new paradigm for understanding the biophysical reality of social and economic processes.

Despite conceptual and methodological advances, the transition to the 21st century has shown that economic theory remains ill-equipped to address the environmental crisis. On the contrary, empirical evidence of threats to the ecological foundation that has supported human civilization throughout history continues to accumulate. As a result, the concept of the Anthropocene (In early March 2024, the proposal to formally adopt the Anthropocene as a new geological epoch was rejected by the Subcommission on Quaternary Stratigraphy, part of the International Union of Geological Sciences (UCS). Nevertheless, the term Anthropocene, widely used in the scientific literature on environmental issues, will be retained in this article to refer to a new dynamic of environmental degradation marked by the central role of human activity. The lack of official recognition of this new epoch has gained prominence but does not imply ignorance or denial of the profound environmental impacts caused by the industrial era, designating a new geological epoch in which human activity has become a geological force capable of altering the dynamics of the Earth system [7,8].

Assuming that EE offers a robust analytical and conceptual toolkit for confronting contemporary socioecological crises, it is striking that the field remains marginal within academic and policy debates. Even more surprising is the fact that the transdisciplinary and plural nature of EE brings clear advantages in terms of analytical breadth, but these same attributes may weaken its identity and limit its influence in policymaking. Authors such as Özkaynak et al. [9], Spash [10], and Saes and Romeiro [11] have addressed this apparent paradox, particularly by questioning what kind of theoretical and methodological pluralism should be ideally embraced by EE.

The central question addressed in this article is whether a more explicit and organized delineation of research fronts, namely, ecological microeconomics and ecological macroeconomics, can contribute to overcoming the field’s perceived fragmentation and reinforce its theoretical identity, pedagogical cohesion, and policy relevance. Addressing this perceived fragility of EE, this article seeks to contribute to the delineation of two interdependent research fronts within the field. The aim is to foster a better understanding of the themes and questions tackled by EE in its micro and macro dimensions. In essence, this article aims to frame the key questions and subject matters that shape two fundamental areas of ecological–economic inquiry: ecological microeconomics and ecological macroeconomics.

While acknowledging that ecological economics has traditionally been structured around core principles such as sustainable scale, fair distribution, and efficient allocation, this paper suggests an additional layer of systematization aimed at organizing the field’s growing analytical diversity. The proposed distinction between ecological microeconomics and macroeconomics is not intended to constrain this diversity, but rather to facilitate clearer orientation for both academic research and teaching. The distinction between a micro-level and a macroeconomic approach in this field serves a pedagogical purpose: it aims to shed light on a gap that needs to be addressed, and which importantly complements not only theoretical debates but also the capacity to implement the ideas of Ecological Economics within the broader context of political economy.

Our hypothesis is that the perceived fragility of EE may be mitigated by a clearer delineation of its core research lines. By articulating more explicitly the boundaries and analytical focus of its micro and macroeconomic dimensions, the field may overcome the sense of fragmentation that often accompanies its plural and transdisciplinary nature. The goal is to outline the key variables and themes relevant to each of these research fronts, thereby encouraging greater convergence between established schools of economic thought and EE.

The article is structured into four main sections, in addition to the Introduction and the concluding remarks. Section 2 presents the principles of EE and its main distinctions from EEc. Section 3 and Section 4 address environmental issues at the micro and macro levels, respectively. Section 5 offers a synthetic proposal to guide future research and efforts within EE.

2. Ecological Economics: Core Principles

Due to the historical theoretical and methodological limitations of neoclassical economics and its environmental approach [12,13], a group of researchers in the 1980s began to articulate an alternative response, which came to be consolidated in the field of EE [14] (Until the 1980s, the term biophysical economics was commonly used to describe the core set of ideas that would later shape modern EE. The field began to take institutional shape with the founding of the International Society for Ecological Economics (ISEE) in 1988, the launch of the Journal of Ecological Economics in 1989, and the first international conference in 1990. Røpke [14] provides an insightful analysis of the origins of EE and its main developmental trajectories. EE has evolved as a critical response to the conceptual foundations of EEc, particularly regarding its treatment of biophysical limits and substitutability assumptions. However, consistent with its methodological pluralism, EE also acknowledges and integrates some analytical tools and policy instruments developed within the EEc tradition [14]. It also serves as a forum for the analysis and discussion of the long-term dynamic interactions between natural and socioeconomic systems [15]. Its central objective is to examine the relationships between the natural and socioeconomic systems in a broad sense, as these relationships lie at the heart of socioenvironmental problems [16]. Accordingly, EE constitutes a theoretical body primarily concerned with the governance of sustainability [17]. To that end, it draws upon a range of disciplines—including ecology, physics, biology, and various other natural and social sciences, alongside economics itself [12,14,16].

It is also worth noting the contributions of biophysical economics, spearheaded by Charles Hall, which emerged partly from critiques of the insufficient treatment of energy and biophysical flows in ecological economics. While it developed as a parallel paradigm, we consider it a valuable and complementary stream, particularly aligned with the concerns of ecological macroeconomics.

EE is characterized by its inherent pluralism [12,14], which enables the development of a more integrated, holistic, biodynamic, and biophysical understanding of the interrelations between the natural system and the socioeconomic system. Its overarching aim is to offer structural contributions to solving ecological problems across multiple spatial and temporal scales [17].

It is worth noting that EE has long engaged in a dynamic and productive debate over the true meaning of transdisciplinarity. According to Costanza et al. [18], the transdisciplinary aspiration stems from the recognition that understanding and managing the complex and highly interdependent system formed by human societies and their connections with other forms of life requires transcending traditional disciplinary and academic boundaries. From the outset, EE adopted a pluralistic perspective [6], embracing a diversity of theoretical and methodological approaches, even including neoclassical ones as valid tools for addressing the complexity of socioeconomic and ecological problems.

However, this openness has not been without criticism. As previously noted, Özkaynak et al. [9], Spash [10], and Saes and Romeiro [11] argue that while an open and heterogeneous theoretical-methodological stance may expand EE’s range of contributions, it also risks an undesirable dilution of its propositions, potentially weakening its identity and coherence as a field.

The absence of a strictly defined methodological axis in EE should not, however, be regarded as a shortcoming. On the contrary, it highlights the dynamic nature of the ecological–economic paradigm, constantly evolving, flexible, and capable of incorporating different analytical techniques and procedures, as long as they are grounded in a systemic understanding of the interactions between natural and economic systems. It is not, therefore, a case of unstructured pluralism, but rather a pluralism oriented by a common understanding: the economic system is an open subsystem embedded within a larger system that is open to energy flows but materially closed. This overarching “envelope” can be understood as the biosphere, which both sustains all economic processes and imposes an insurmountable physical boundary upon them.

The core elements of EE and EEc are summarized below (

Table 1. Key distinctions between environmental economics and ecological economics.

Elements	Environmental Economics	Ecological Economics
Worldview	The socioeconomic system is isolated and self-contained	The socioeconomic system is an open subsystem of the biosphere
Scale	Micro–optimal allocation	Macro-sustainable scale
Epistemological approach	Mechanical physics	Thermodynamics and biology
Environmental hypothesis	Weak: The environment is passive and neutral	Strong: The environment is fragile and may become destabilized
Notions of sustainability	Weak sustainability	Strong sustainability
Temporal perspective	Short/medium term	Long term
Metabolic notion of economic dynamics	Circular monetary flow of income and output	Biophysical and chemical flow of energy and materials
Production process	Ignores qualitative differences between production factors	Recognizes qualitative differences between production factors
Optimism/pessimism	Technological optimism	Technological pessimism or prudent skepticism

Source: based on Mueller [12] and Cechin and Veiga [13].

). Although the notion that the economic system is an open subsystem may seem simplistic or self-evident, its acknowledgment carries significant theoretical and methodological implications. One of the most significant is the questioning of the meaning and role of economic growth, that is, the physical expansion of the economic system, in the pursuit of sustainable prosperity for human societies.

From an epistemological standpoint, EE scholars are unanimous in rejecting the mechanistic foundations of neoclassical economics, a stance that also extends to EEc. The main theoretical reference in this regard is Nicholas Georgescu-Roegen, whose main contribution was his seminal critique of the neoclassical representation of the production process [19,20]. As a consequence, ecological–economic analysis must incorporate the laws of thermodynamics, especially the second law, concerning entropy, since the economic system is recognized as entropic in nature and characterized by its exosomatic complexity [20].

Regarding the relationship between long-term economic growth and environmental degradation, the EE perspective is often viewed as pessimistic—or, more accurately, prudently skeptical—due to the high degree of uncertainty surrounding the capacity of technological development to overcome the ecological limits imposed on economic growth [21]. The ecological–economic scale (or simply, scale) is associated with the carrying capacity of the natural system [13]. Broadly speaking, scale is defined as the relative size or proportion between two entities: the natural system (which does not expand) and the economic system (which may expand or contract).

The notion of scale is one of the three foundational pillars of EE, alongside fair distribution and efficient allocation. Unlike EEc, ecological economists argue that allocative efficiency and distributive justice should be pursued only after the ecologically sustainable scale of the economic system has been properly established [21]. This implies a hierarchy of policy goals, in which sustainable scale serves as the defining boundary for the operational space of economic activity. The importance of scale lies in the recognition that economic activity can only be considered sustainable if it is grounded in resilient ecosystems [22]. According to Malghan [23], treating scale as a variable of interest marks a significant ontological shift from neoclassical analysis.

Within EE, the response to complex environmental and social problems is structured around three foundational pillars [18]: (i) The development of a deep understanding of how the real world functions, particularly the interconnections among nature, society, and the economy. This understanding must be accompanied by an ethical orientation concerning the kind of future humanity seeks to share with non-human species and future human generations; (ii) the construction of a diverse set of tools to generate and deepen knowledge about the complexity of the socioecological and economic systems that sustain life; (iii) providing a practical and flexible toolbox, comprising institutions, policies, and strategies capable of supporting the transformative changes required to achieve human flourishing within the resilience boundaries of the biosphere.

3. The Productive System and the Environment: A Micro-Level Analysis

Although the term “ecological microeconomics” is not yet widely used in the field, its absence in the literature reflects more a conceptual gap than a lack of relevance. In this article, we offer an initial outline of this front as a way of encouraging new perspectives on firm-level and production system dynamics from a bio-physical and thermodynamic standpoint.

Georgescu-Roegen’s approach provides ecological economics with an inescapable physical foundation: economic processes are entropic processes. This perspective challenges the assumption that technology or produced capital can fully compensate for the loss of natural capital. It also draws attention to irreversible dynamics, deep uncertainty, and the complexity of economic behavior, proposing a research and policy agenda oriented toward strong sustainability—one that recognizes the need to respect ecological limits and promote a fair distribution of resources.

According to Georgescu-Roegen [19], all economic activity involves an irrecoverable degradation of the quality of natural resources, which imposes insurmountable physical limits on economic growth. While energy is conserved in the physical sense (First Law of Thermodynamics), its quality degrades (Second Law), making it progressively less available for performing economic work. This insight stands in stark contrast to the neoclassical view that produced capital and technological progress can indefinitely substitute for natural capital.

In this sense, considering a perfectly closed system is a physical impossibility due to the Laws of Thermodynamics. In any physical–energy transformation process, low-entropy energy that enters the system is transformed and partially dissipated, leading to an increase in entropy and a decrease in the availability of potential energy. Asserting that a system can utilize the totality of the energy it receives is physically impossible because of an entropic process (the energetic depreciation of the system). For the system to continue functioning, it requires access to a primary energy source, which, when processed, will inevitably dissipate some energy [19].

In his critique of the substitutability between natural capital and produced capital, Georgescu-Roegen argues that certain ecosystem services are irreplaceable. Herman Daly [24] expanded this critique by proposing the concept of “critical capital”—those elements of natural capital whose functions cannot be replicated by technology or human capital, such as a stable climate, biodiversity, or the hydrological cycle. This perspective rejects the notion of perfect substitutability found in endogenous growth models such as those proposed by Solow [25] and Romer [26].

Another central aspect of Georgescu-Roegen’s work concerns the irreversibility of economic processes. He emphasizes that production and consumption generate environmental transformation trajectories that cannot be undone by future investments. This creates what he calls the “curse of irreversibility” [19]. Conventional approaches often ignore this historical and non-linear character of the economy, treating resources as constant flows or infinitely recyclable stocks.

All of these aspects challenge traditional economic notions of production and consumption and highlight the need to reshape their behavior in order to build an economic system that is better aligned with the biophysical limits of ecosystems, since the economic system operates within the boundaries and constraints of ecosystems. However, the complexity of the interrelations inherent to ecosystems, such as the interdependence of flows and processes, is largely ignored in conventional economic analyses. One of the key criticisms, therefore, concerns the design assumptions embedded in mainstream economic models. The prevailing industrial model can be characterized as linear in its use of energy and resources, resembling a Type I Ecology [27]. This model is marked by: (i) an almost linear protosystem; (ii) independent flows of matter and energy from primary sources to waste generation; (iii) the assumption of unlimited resources, which negates the need for recycling or reuse mechanisms; and (iv) the notion of unlimited waste capacity. This configuration corresponds to inefficient metabolic systems, where no connections exist between different stages of material and energy flows. As a result, there is little concern for resource scarcity, even if recognized as limited, or for the fate of by-products [28].

By contrast, the pursuit of sustainable industrialization [29] would require a more closed-loop productive system. Even acknowledging the entropic limits of such systems [13], moving toward greater closure can foster more efficient processes and lower environmental impact [28]. This would imply a production model aligned with the logic of Type II and Type III Ecologies [30,31,32,33]. Type II Ecology corresponds to a quasi-cyclical model of material and energy flows, while Type III Ecology is characterized by the complete recycling or reuse of all matter and energy by the system’s components, requiring only a single external input—solar radiation. It is worth noting that certain industrial sectors, particularly those in which the efficient use of chemical inputs is key to cost and competitiveness, have progressively developed more complex production arrangements, gradually shifting away from Type I and moving closer to Type II configurations [27,30,31,32,33,34].

Although EE recognizes the ecological limits to economic activity, it has paid relatively little attention to firm behavior. Yet the firm, and, by extension, the productive system, is a crucial actor in the transition toward sustainability [35,36]. Drawing on the work of Guerreiro Ramos [37], one can distinguish between instrumental rationality, which is concerned with how to act efficiently (e.g., minimizing costs and maximizing productivity), and substantive rationality, which is concerned with the ethical and normative principles that guide economic actions, namely, what should be done and why.

In this view, it is society’s role to define these normative directions, for instance, by signaling the imperative of building a sustainable system. Firms, in turn, respond by redesigning their production processes to align with such societal goals [34,35,36]. However, from an EE perspective, this division of rationalities is insufficient. What is required is the integration of an environmental rationality, a mode of reasoning not yet fully developed or internalized by economic actors. This environmental rationality would require firms to not only optimize within given constraints, but to recognize and operate within the ecological boundaries that define the safe operating space for human activity [38].

The development of an environmental rationality for firms remains a significant gap within ecological economics—an area that still requires deeper theoretical and analytical elaboration. While some of the work addressing microeconomic aspects of ecological economics continues to be grounded in neoclassical foundations, there are promising efforts in other fields of knowledge that move beyond this paradigm, especially in how they approach the role of firms in shaping non-linear productive systems. These alternative approaches offer valuable opportunities for convergence with ecological economics, as is the case with industrial ecology (IE), which provides concrete tools and frameworks for rethinking production systems in light of ecological principles.

IE takes as its theoretical starting point the propositions of Georgescu-Roegen regarding entropy, the limited substitutability between natural and produced capital, and the irreversibility of processes. This alignment makes it possible to bridge the two fields, given the convergence of their foundational premises. It is important to note that IE is not a subfield or subdivision of ecological economics, but rather that its advances may offer important insights into how ecological economics can incorporate microeconomic aspects into discussions on the role of firms in constructing production systems aligned with its core principles.

Regarding the potential relationship between the areas, some of the authors of EI identify it. According to Kronenberg [39], there are cross-references between EE and IE. Duchin and Hertwich [40] argues that the two fields are closely related, although EE is broader in scope and encompasses IE. Ehrenfeld [41] notes that IE draws on biological or ecological metaphors, which are reflected in concepts such as industrial metabolism, closed industrial ecosystems, technological food webs, and industrial symbiosis.

To exemplify the EI approach and highlight its potential to contribute to discussions on microeconomic aspects within EE, IE points to, and actively seeks to build, the emergence of an ecological network of interconnected actors exchanging matter and energy [42]. According to the authors, some view this metaphor as ontological, a way to expand the boundaries of thinking, while others interpret it normatively, as a source of prescriptive guidance for building a more sustainable world. IE is notably concerned with the firm and the production process, encompassing both a theoretical framework and a policy tool. Its theoretical dimension is characterized by the analysis of material and energy flows within productive systems. As a policy instrument, IE adopts a prescriptive approach, aiming to provide practical measures and solutions to economic agents.

Rooted in engineering and management, IE incorporates physical balance-based analysis at the micro level, while offering support to decision-makers at the macro level. However, significant challenges remain in establishing robust conceptual and operational linkages between the micro and macro scales. One effort in this direction is the development of meso-level analytical tools, such as life cycle analysis (LCA) and input–output matrices, along with the increasing integration between them.

IE offers a systemic and integrated perspective that supports the management of environmental impacts caused by industrial processes [43]. It calls for improved assessment of: (i) resource flows within productive systems; (ii) alternative uses and valorization of waste and by-products; and (iii) mechanisms that encourage more efficient use of materials and energy, including market-based instruments, incentives, and regulatory frameworks. In this sense, IE can also be seen as a tool for promoting sustainable development [31]. It may be viewed as part of an economic, cultural, and technological evolution, yet one grounded in a systems view of the economy, thus aligning closely with the principles of EE.

There is no consensual definition of IE, and it does not constitute a unified theoretical body. Nevertheless, it is possible to identify some common principles underlying analyses that adopt IE as their theoretical foundation. Based on Jelinski et al. [32], these common principles are as follows:

• It is proactive rather than reactive, reflecting pragmatism;
• The approach is designed-in, not added-on: actions under the industrial-ecological framework should not be incremental, but represent a transformation in the (re)design of processes and products;
• It is flexible: industrial structures operate in dynamic environments and must respond to technological changes while recognizing both limitations and opportunities;
• It is comprehensive: it seeks solutions that go beyond the boundaries of the firm, region, country, or culture;
• It is a complex approach, acknowledging the holistic, systemic, and long-term nature of industrial–ecological problems, as well as the diverse forms of analysis and multi- and interdisciplinary research required to understand the economic system.

Finally, IE involves the analysis of material and energy uses and flows (industrial metabolism) within productive systems at local, regional, national, and global scales (although IE includes analyses of material and energy flows at global scales, this article considers it primarily within the micro-level of analysis. This is because IE still takes the firm–and production systems more broadly, as its main unit of analysis, emphasizing organizational decisions, and technological arrangements within specific industrial contexts). It also addresses the role of industry in reducing environmental impacts throughout the product life cycle; the dematerialization and decarbonization of economic systems; life cycle planning, design, and assessment; environmental design; extended producer responsibility (product stewardship); industrial ecosystems or eco-industrial parks (industrial symbiosis); and product-oriented environmental policies [40,44]. Building on contributions from IE, ecological microeconomics offers not only a critique of conventional production theory but also a normative reorientation toward material sufficiency, ecological rationality, and systemic redesign of socio-technical arrangements.

4. The Economic System and the Environment: A Macro-Level Analysis

According to Helpman [45], ever since Adam Smith, economists have asked why some nations become wealthy while others remain poor. More than two centuries later, the mystery of economic growth remains unresolved. As economic growth is the central concern of macroeconomic analysis, its potential drivers have been the subject of intense investigation by (macro)economists [46].

In a collection organized by Busato et al. [47], the word growth appears, on average, more than twice per chapter. By contrast, terms such as environment, ecological economics, ecology, natural resources, pollution, and sustainability do not appear at all. This absence illustrates the historical marginalization of environmental issues in mainstream macroeconomic thought. However, this neglect is increasingly being reconsidered in light of worsening environmental problems, especially the climate emergency and the rising frequency of extreme weather events across the globe.

For ecological economists, the failure of macroeconomic analysis to incorporate environmental concerns is partly rooted in the historical role assigned to economic growth within industrial civilization since the 18th century. As Daly [48] observes: “In the face of this formidable historical consensus favoring growth as the general panacea, now come the ecological economists to challenge and criticize today’s standard economists for ‘growthmania’—for abstracting from environmental and social limits to growth”.

As a direct outgrowth of its pre-analytical vision–that the (open) economic system is a subsystem of the (closed) biosphere—EE places central importance on the biophysical limits to economic growth. From this perspective emerges a distinctive analytical category within EE: the ecological–economic scale (scale). One of EE’s key challenges is to incorporate these limits into macroeconomic analysis, thereby driving the emergence and consolidation of ecological macroeconomics [49].

Although not yet fully formalized, ecological macroeconomics represents an attempt within EE to “investigate, from both a qualitative and quantitative standpoint, the theoretical and policy-based possibilities of aligning the socioeconomic metabolism, that is, throughput, with the sustainable scale of the ecological system at a global level” [50]. It aspires to provide a theoretical structure capable of supporting the development of a socioeconomic system whose stability does not rely exclusively on continued physical expansion (i.e., growth in gross domestic product, GDP). Besides questioning the very premise of continuous growth, ecological macroeconomics emphasizes macro-level stability, long-term resilience, and the redistribution of biophysical resources across space and generations.

A central dilemma arises, one that only an ecological perspective on the macroeconomic system can adequately address: on the one hand, sustained GDP growth is biophysically unsustainable in the long run; on the other, economic stagnation or low growth may lead to socioeconomic instability. What is needed, therefore, is a new macroeconomic architecture that acknowledges the interdependence between ecosystem resilience, economic expansion (and its financing), social stability, and quality of life.

The recent development of ecological macroeconomics has led to a growing body of literature exploring macro-level sustainability challenges, including climate change, biodiversity loss, financial instability, and global inequality. Several contributions have sought to articulate this emerging field from different theoretical traditions, including post-Keynesianism, systems thinking, and endogenous growth critiques [51,52,53,54]. These works have helped define ecological macroeconomics as a space for interdisciplinary dialogue and policy innovation, reinforcing the relevance of macroeconomic structures, dynamics, and institutions in shaping long-term sustainability outcomes.

Saes and Romeiro [55] conducted a comprehensive theoretical and methodological review of initiatives aimed at integrating macroeconomics and the environment from the EE perspective. The authors revisited key contributions from the 1990s, including Heyes’s [56] proposal to incorporate ecological variables into the traditional IS-LM model through the addition of an ecological capacity curve. In this model, “ĕ” is a parameter that captures the environmental intensity of economic activity, defined as a function of “R”, the long-term real interest rate, and “Λ”, an institutional parameter reflecting the state of environmental regulatory development.

These opportunity costs of growth refer, among other things, to losses of natural capital, such as the depletion of renewable and non-renewable resource stocks and the destabilization of essential ecosystem services. In conventional macroeconomic theory, natural capital is not recognized as a significant entity, and its degradation is not accounted for as a cost capable of offsetting the benefits of economic growth. One of the hallucinatory effects of the “GDP growth spell”, as Daly [57] called it, is the belief that economic growth is always possible and desirable, with no consideration for the notion of uneconomic growth.

The relevance of Daly’s contributions extends beyond the pioneering nature of his critique of growth-centered economic paradigms. He is also widely recognized for his work on the steady-state economy, a concept inspired by John Stuart Mill. For Daly [58], the scale of such an economy remains constant at a level that does not exceed the environment’s regenerative capacity nor its capacity to absorb waste.

What is surprising, however, is that despite Heyes’s [56] proposal and Daly’s influential contributions to steady-state economics, it was only after the end of the first decade of the 21st century that more systematic research efforts were directed toward the explicit incorporation of environmental variables into macroeconomic analysis. The turning point in this regard was the 2008 financial crisis, which many saw as a unique opportunity for social transformation and a renewed debate on the role of economic growth in modern societies.

Despite the theoretical and methodological nuances among these initiatives, they all share a common understanding: the dangerous proximity to ecological thresholds and the recognition of biophysical and thermodynamic limits as critical inputs for a renewed comprehension of the relationship between economy and prosperity. The converging element across these approaches, which allows them to be grouped under the umbrella of ecological macroeconomics, is the revival of the debate on limits to growth [2], whose central analytical corollary is the notion of the ecological–economic scale. In other words, the effort to define a macroeconomically optimal and ecologically sustainable scale becomes the summum bonum of ecological macroeconomics.

At the theoretical level, the discussion of scale requires important qualifications [59]. The ecologically sustainable scale is fundamentally a biophysical problem that demands assessments beyond the scope of purely economic analysis. It refers to the upper limit of economic expansion that can occur without disrupting ecosystem resilience. In this regard, the 2009 study from the Stockholm Resilience Centre introduced the concept of planetary boundaries as a framework for identifying ecological thresholds. Rockström et al. [60] proposed an analytical structure aimed at defining the preconditions for human development in the Anthropocene. The framework proposed by Rockström et al. [60] has since undergone important updates. The most recent revision, by Richardson et al. [61], indicates that six out of the nine established planetary boundaries have already been transgressed, reinforcing the urgency of integrating ecological thresholds into macroeconomic thinking). Another key indicator is biocapacity, which, together with the ecological footprint, both calculated by the Global Footprint Network, seeks to assess the (un)sustainability of consumption within a given territory [62].

On the other hand, the optimal macroeconomic scale refers to an economic problem, though one constrained by an ecological boundary. It represents the point beyond which a given economy begins to exhibit uneconomic growth. This concept is rooted in the threshold hypothesis, as proposed by Max-Neef [63] (p. 117): “For every society there seems to be a period in which economic growth (as conventionally measured) brings about an improvement in the quality of life, but only to a point, the threshold point, beyond which, if there is more economic growth, quality of life may begin to deteriorate”.

Monetary indicators that capture the opportunity costs of economic growth can serve as parameters for defining the optimal, or desirable, scale of an economic system. A prominent example is the genuine progress indicator (GPI), whose theoretical foundations are grounded in the Fisherian concepts of income and capital [64].

Given its centrality, the theoretical and practical study of scale, as well as the distinctions between ecologically sustainable (maximum) scale and optimal scale, is a sine qua non condition for the theoretical and methodological foundation of ecological macroeconomics. Measuring scale requires progress in understanding the complex ecological processes that underpin socioeconomic activity. This also reinforces the need to account for the progressive reduction of ecological “living space”, the shrinking of ecosystems capable of sustaining renewable resources, which poses systemic challenges. From megafires to the deoxygenation of aquatic systems, these dynamics demand urgent macroeconomic responses grounded in resilience and risk-awareness.

The macro-level approach proposed here is therefore intended to complement, rather than compete with, micro-level ecological analysis. Together, these two fronts may help capture the systemic complexity of sustainability challenges from both the structural and the behavioral perspectives. Special attention must be paid to the required methodological innovations. While EE offers the ontological and epistemological foundations needed for such a challenge, it has historically made only modest advances in the empirical assessment of scale.

5. Synthesizing Ecological Micro and Macro Perspectives: A Preliminary Framework

From an ecological–economic perspective, available empirical evidence on environmental degradation [4] suggests that there has been a significant shift in the pattern of resource scarcity. For ecological economists, the trajectory of industrial civilization and its metabolic demands have prompted a transition from an “empty world” to a “full world” [65], in the sense that natural capital, once abundant, has become the limiting factor.

This shift raises fundamental questions about the goals of economic policy. As Daly [65] (p. 100) notes, “The global economy is now so large that society can no longer safely pretend it operates within a limitless ecosystem. Developing an economy that can be sustained within the finite biosphere requires new ways of thinking”. In a similar vein, Costanza [66] advocates for building a “full world economy”, one that explicitly accounts for the unique characteristics of natural capital and calls for a reversal of policy priorities, from allocation to preservation.

Since its formalization, EE has aimed to position itself as a genuine alternative to the economic mainstream. The dissatisfaction with how conventional economic theory addressed environmental concerns lies at the very origin of EE. Its heterodox nature is reflected in at least three key elements: (i) a rejection of the notion that economic agents possess substantive rationality, aligning EE with other critical schools of economic thought; (ii) the incorporation of thermodynamic functioning and the recognition of absolute biophysical limits to continuous economic expansion, which marks a clear departure from the mechanistic epistemology of the neoclassical mainstream; and (iii) the explicit consideration of ecological complexity and the multifunctionality of natural capital, particularly through ecosystem resilience and ecosystem services concepts.

It must be acknowledged, however, that EE remains peripheral within mainstream economic discourse, despite a growing demand for analyses that incorporate environmental variables in response to the worsening ecological crisis. It is commonly referred that the eclectic range of perspectives, combined with a loosely structured pluralism and a historically fragmented nature, may contribute to a sense of fragility within EE, potentially resulting in a weak disciplinary identity and limited capacity to influence economic policymaking [9].

In this context, systematizing research fronts within EE becomes an important step toward advancing the field. Based on the basic principles guiding the micro and macro dimensions of ecological–economic analysis, which also relate to other areas of economics (such as international, regional, public sector, and development economics), it is possible to propose, albeit preliminarily, some foundational elements for the future structuring of two distinct yet interconnected research fronts (Figure 1), united by the broader goal of sustainable development.

Rather than imposing a rigid analytical framework, this synthesis aims to consolidate a structured yet flexible lens for organizing the field’s diverse contributions. The proposed fronts allow for the coordination of theoretical, methodological, and policy-oriented efforts across scales, highlighting key domains of concern and action. While ecological microeconomics focuses on behavioral change, technological design, and firm-level dynamics under ecological constraints, ecological macroeconomics addresses structural variables such as aggregate scale, income distribution, and biophysical limits at the national and planetary levels. Both share common ontological premises, but differ in scale, tools, and policy orientation, offering complementary yet distinct lenses for ecological–economic analysis.

It is important to reiterate that this proposed structure does not seek to replicate the dualism of neoclassical economics, but rather to suggest a heuristic device that may assist in organizing the diverse themes and methodologies already present in the EE literature. It is neither an attempt to rigidly classify or constrain EE research, nor to offer a definitive categorization. Rather, it is a preliminary proposal aimed at specifying the key variables and thematic priorities associated with each of the two fronts. The intended contribution is to improve understanding of EE’s broader agenda, support the organization of future collaborative research and teaching strategies, and foster much-needed dialogue and convergence with established approaches in economic science.

On one side, ecological microeconomics focuses on analyzing the decisions of economic agents in the face of environmental constraints, and on understanding the technical aspects of the relationship between natural capital and the traditional factors of production–capital and labor–framed by the imperative to make production systems more sustainable. This perspective builds on Georgescu-Roegen’s [20] critique of the neoclassical production function, whose main flaw lies in its failure to recognize the logical differences among the factors of production (natural capital, labor, and man-made capital) and their inherently complementary nature. This perspective differs fundamentally from neoclassical microeconomics, as it challenges the assumptions of factor substitutability and rational optimizing behavior, drawing instead on Georgescu-Roegen’s emphasis on the irreversibility of resource use and the complementarity of production factors.

On the other side, ecological macroeconomics draws primarily on Herman Daly’s [67] contributions regarding the biophysical and moral limits to the continuous expansion of the economic system. The maximum and optimal scales are its main variables of interest, while ecosystem resilience thresholds serve as key parameters that constrain economic activity. In addition to treating scale as a central analytical category, ecological macroeconomics assumes the need to assess the opportunity costs of physical expansion and to properly incorporate them into economic performance metrics.

This will require a revision of national accounting techniques, social accounting, to make explicit the biophysical dimensions underlying traditional macroeconomic indicators. Consequently, advancing the construction of an integrated (inter)national system of socioeconomic and environmental accounts is essential. Equally fundamental is the continued development and refinement of methodological tools that integrate ecological and economic analysis, namely, ecological–economic models.

By definition, both fronts derive from EE and share its thermodynamic foundations for understanding the functioning of the economic system. This perspective highlights the importance of monitoring the patterns of energy appropriation that sustain economic processes, as these are key to studying the interface between nature and society. As a result, there is a strong emphasis on the use of biophysical indicators that capture the socio-metabolic profile of societies.

From an ontological standpoint, EE is grounded in the view that the economic system is constrained by the material finitude of the global ecosystem and that ecosystems and social systems are engaged in a process of coevolution. Within this framework, ecological microeconomics contributes by examining how individual agents and production systems operate within these constraints, while ecological macroeconomics addresses the systemic implications of maintaining economic activity within biophysical limits at broader scales. Together, these two fronts offer a coherent and integrated foundation for rethinking economic dynamics in a world of finite resources and increasing ecological interdependence.

Ecological microeconomics focuses primarily on reducing the material and energy intensity of economic activities, both production and consumption, aligning with other well-established approaches such as IE and its associated instruments. A key distinction from conventional production functions lies in the explicit treatment of natural capital as a factor of production that is complementary, rather than substitutable, to labor and man-made capital.

The complexity inherent in the dynamics of ecosystem services requires an analytical level that has been largely overlooked in traditional microeconomic models, including those from heterodox schools. Particular attention must be given to the role of (eco)innovation and its potential to reduce reliance on ecosystem goods and services. However, overlooking the rebound effects of green technologies risks falling into the illusion of greenness or indulging in a kind of technological optimism that fails to account for the systemic constraints imposed by ecological limits.

Still within the scope of ecological microeconomics, it is desirable to critically incorporate tools and techniques from both bioeconomy and circular economy approaches. These concepts have gained increasing popularity in business circles due to their alignment with the goal of making economic activities more sustainable. Elements related to new patterns of consumption behavior are particularly relevant for rethinking production systems suited to a resource-constrained economy. Terms such as rational and conscious consumption, repair, reuse, and recycling, beyond being passing trends, must contribute to the construction of new rational foundations for consumer behavior.

A key novelty brought about by the broader dissemination of these ideas is the emphasis on the urgent need for a transition from an economic engine dependent on non-renewable resources to one based on renewable resources. Furthermore, this movement is closely intertwined with the current wave of innovation within capitalism–Industry 4.0, which was initially promoted by the German government in the early 2010s.

In the context of ecological macroeconomics, it is important to acknowledge that, due to a variety of historical, endogenous, and exogenous factors, countries exhibit different development trajectories and levels. As such, imposing the same set of constraints on growth policies across nations can be counterproductive. These asymmetries give rise to distinct ecological and social challenges. While some societies have already reached a level of development that allows for the fulfillment of basic needs, others are still undergoing a transition toward mass consumption, though now under the imperative of doing so sustainably. In these contexts, the expansion of the production and consumption of basic goods remains essential.

Clearly, such asymmetries call for differentiated responses, pointing to the need for a political economy of growth and post-growth that can accommodate the distinct patterns of developed and developing countries. As a guiding principle of ecological macroeconomics, this approach recognizes countries’ divergent historical trajectories in terms of environmental degradation, social stability, and equitable income distribution, as well as their varied vulnerabilities and capacities to cope with ecological collapse. It also underscores the need for differentiated treatment among nations.

In the case of already developed countries, the goal of material and energy stability, combined with socioeconomic stability, becomes essential. This is because there is growing evidence that these countries have already surpassed their optimal macroeconomic scale, and that further increases in throughput no longer lead to improvements in well-being. For this reason, an ecological macroeconomics tailored to developed economies should revisit the principles of the steady-state economy [67] and/or draw on frameworks such as “prosperity without growth” [68,69].

For developing countries, however, it must be recognized that aspirations for greater material and energy comfort, alongside the urgent need to build and upgrade basic infrastructure (e.g., sanitation and transportation), will require expansion of their economic systems. Nonetheless, due to the diffusion of the consumption patterns of wealthy nations, some developing societies already exhibit excessive consumption of positional goods and services. Thus, the expansion in access to basic goods and services should take precedence over the proliferation of positional consumption. In this light, it is reasonable to argue that economic growth remains a legitimate and desirable objective in these societies, but one that should unfold within the theoretical and methodological framework of EE. This raises a fundamental question: can LMICs achieve sustainability without replicating the environmentally destructive pathways followed by industrialized countries? This possibility, though uncertain, merits closer investigation and should be central to future comparative studies within ecological macroeconomics.

Ecological macroeconomics for developing countries should prioritize the adoption of policies that are environmentally conditioned, enabling their socioeconomic development paths to diverge from the environmentally harmful trajectories historically followed by developed nations. The greatest challenge for a macroeconomic-ecological perspective tailored to the Global South lies in identifying alternative material and energy development trajectories that avoid the uncritical replication of conventional development models. This vision aligns with the concept of ecodevelopment, initially proposed by Maurice Strong and later popularized by Ignacy Sachs, which advocates for development strategies grounded in local and regional potential, along with the rational use of available resources and technologies.

An additional contribution to this debate is the “a-growth” perspective, proposed by Van den Bergh [70,71], which argues that societies should adopt a position of indifference toward GDP growth and instead focus directly on environmental quality, social well-being, and institutional resilience. Rather than framing growth as either inherently good or bad, the a-growth approach shifts attention to designing policies and economic systems that are robust under various growth scenarios. This may be particularly relevant in the context of ecological macroeconomics for both developed and developing countries, as it invites a pragmatic stance that avoids growth-centered strategies without necessarily embracing radical degrowth.

Both ecological microeconomics and ecological macroeconomics are inherently long-term in orientation, focused on structural transformations rather than short-term adjustments or countercyclical policies. This is due to the recognition that ongoing transitions–such as the energy transition, entail not only profound changes in the technological base of society but also civilizational shifts. For this reason, both research fronts must be guided by a strong ethical orientation.

Finally, some brief methodological reflections are in order, even though a more thorough discussion falls beyond the scope of this article. Both ecological microeconomics and ecological macroeconomics must move away from models centered on the assumption of perfectly rational agents. Instead, they should acknowledge the bounded rationality of individuals and the complexity of human behavior under conditions of structural uncertainty.

Economic decisions are not made in a vacuum of optimization, but rather in evolving social and ecological contexts that shape preferences, values, and perceptions. Within this framework, it becomes essential to recognize the potential emergence of ecological altruism, a behavioral dimension grounded not in self-interest but in a collectively constructed ecological consciousness, which may serve as a normative foundation for transitions toward sustainability.

6. Concluding Remarks

This article emerged in the context of a growing need to consolidate the identity and analytical contribution of EE within economic thought. Its main objective was to offer an initial proposal for the systematization of two complementary research fronts, ecological microeconomics and ecological macroeconomics, as a means of organizing ongoing academic efforts and fostering more effective dialogue with other strands of economic analysis. After revisiting the fundamental principles of EE and distinguishing its foundations from those of EEc, the article outlined the micro and macro dimensions of ecological analysis, highlighting their respective scopes, variables of interest, and analytical challenges.

Ecological microeconomics was presented as a field focused on the reduction of material and energy intensity in production and consumption, emphasizing the integration of natural capital as a complementary factor of production and encouraging a systemic redesign of firms and consumption patterns. It critically engages with tools from bioeconomy, circular economy, and IE, while recognizing the risks of green rebound effects and the limits of technological optimism. It also highlights the importance of fostering ecologically rational behavior grounded in collective awareness.

On the other hand, ecological macroeconomics addresses the structural and long-term constraints imposed by ecological limits on economic systems. Its analytical core lies in the concept of economic-ecological scale, both in its sustainable (maximum) and optimal dimensions, and it calls for the revision of national accounting systems and macroeconomic indicators to include the biophysical foundations of economic activity. This front also considers the asymmetries between developed and developing countries, proposing a differentiated political economy of growth and post-growth, aligned with principles of historical responsibility, justice, and solidarity.

Looking ahead, the delineation of ecological microeconomics and ecological macroeconomics offers a basis for future research and educational strategies. In the short term, this framework invites the development of empirical studies that explore how these two domains interact with specific socio-metabolic profiles, technological innovations, and institutional arrangements. In the long term, we envision a research agenda that consolidates ecological economics as a more structured field, capable of informing macroeconomic models, production systems, and public policies grounded in ecological limits and intergenerational justice. Moreover, future efforts should address the operationalization of these analytical categories through indicators, modeling, and applied policy tools.

We also recognize the limitations of this contribution, given its conceptual nature. The proposed categories require further development, both theoretically and empirically, across diverse social, ecological, and geographical contexts. Nonetheless, we hope this framework provides a foundation for more coordinated and focused research efforts within ecological economics.

By delineating these two fronts, the article seeks not to rigidly categorize research within EE but to contribute to a broader understanding of its analytical scope and to stimulate more structured and impactful research and teaching strategies. Ultimately, both ecological microeconomics and macroeconomics are united by the challenge of reimagining prosperity within the biophysical limits of the Earth system, an endeavor that requires analytical innovation, ethical commitment, and political legitimacy.