Policies For The Transition
Achieving a steady state economy requires adherence to four basic rules or system principles: (1) Maintain the health of ecosystems and the life-support services they provide. (2) Extract renewable resources like fish and timber at a rate no faster than they can be regenerated. (3) Consume non-renewable resources like fossil fuels and minerals at a rate no faster than they can be replaced by the discovery of renewable substitutes. (4) Deposit wastes in the environment at a rate no faster than they can be safely assimilated.
Policies for sticking to these rules are varied. The first rule requires conservation of enough land and water such that healthy ecosystems can flourish and evolve. The second and third rules call for principled regulation of resource extraction rates. Direct forms of regulation include cap and trade systems, extraction quotas, and severance taxes. The fourth rule requires pollution restrictions, such as emissions limits or toxicity standards. In addition to rules aimed at specific extraction and pollution activities, there are general macroeconomic policies and potential management actions that can help stabilize growth and limit throughput to sustainable levels. These types of policies and actions include managing interest rates and the money supply for stability, addition of environmental and social costs to prices, increased flexibility in working hours, and alteration of bank lending practices.
Read more about this topic: Steady State Economy
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