Eco-Economics in Cities and Rural Areas

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Abstract

Economic models are built primarily following the classical economic theories, but a challenge to build good models with classical theories is needed to define the exact value of the Earth, which is hardly definable. Quite often national gross product indicator calculation reuses the same performance indicators, where the resource and income distribution system is not linked to production factors. The resource and income distribution system is primarily associated with low productivity (execution of a sales plan, execution of a profit plan, profitability level, increase in market share, personnel turnover rate, hours worked per employee). Changes in the productive and economic structures of the markets result in new innovative growth patterns which, based on customer motivation, are linked to the concentration of capital in regional and national markets, the growth of transnational markets and the development of technology. At the same time, extensive economic development through natural resources leads to deforestation, landscape changes, desertification, swamping and soil fertility renewal. So far, it often has been assumed that economic growth depends on the use of natural resources, and natural resources are unlimited. The results are “resource crisis”: resources are running out and resource prices are rising, thus invalidating a particular model. On the other hand, the eco-economy approach is a sustainable future for the economic modelling. The principle of eco-economy is based on a production system, which relies on re-cyclicality (the basis is the production of zero waste production). For this to happen, a transition to a completely new mind-set is needed. The research results were previously approbated during the graduate meeting of the Baltic DBU scholarship holders from 4 to 6 May 2018 in Latvia.

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