From ecological footprint to ecological rent: An economic indicator for resource constraints

Abstract

This paper takes as a starting point a combination of an input–output model with a national Ecological Footprint account for Germany in the spirit of Wiedmann et al. [Wiedmann, T., Minx, J., Barrett, J., Wackernagel, M., 2006. Allocating ecological footprints to final consumption categories with input–output analysis. Ecological Economics. 56, 28–48]. Footprint as well as Biocapacity is dealt with at the industry level. Gross output of each industry and final demand for each industry can then be split up into a share that is reconcilable with Biocapacity and another share that corresponds to the ‘Ecological Deficit’. The Ecological Footprint concept is extended in this study by introducing the additional biocapacity necessary for sustaining the given level of economic activity. It is assumed that each industry had to rent the corresponding areas and to apply a given technology in order to make this additional land biophysically productive. That results in an additional technology for each industry leading to an increase in costs and prices. The new price level is directly linked to the share of output that corresponds to Biocapacity overshooting, which is defined by the ‘Ecological Deficit’. Economic indicators can be derived by measuring the income difference brought about by the price increase. This difference corresponds to a Ricardian rent which is due to resource constraints on output growth.