The recognition of two important concepts in science, namely, the assimilative capacity of nature (resilience) and the entropy law of thermodynamics enables the formulation of an alternative framework for factor utilisation in economics. This framework, which explicitly includes environmental capital as a factor, enables the illustration of the entropy law being the driver of diminishing marginal returns and the limited ranges of substitutability between factors. Such revisions have profound implications for policy formulation. Stabilising environmental capital becomes an important instrument of policy at all levels.
|Number of pages||5|
|Journal||Economic and Political Weekly|
|Publication status||Published - 13 Sep 2014|