sustainability concepts: efficiency

I am no economist.  Absolutely.  However, in my approach to “domestic” economics, i.e. my family budget, our goal is to maximise our lifestyle (for the immediate and the long term) whilst incurring a minimum of debt.   We have some ideologies which underpin this very simple theory which is also to minimize the harm we do… so within the bounds of our ability to control we purchase fair trade items, use free range food products and cruelty free personal products. 

So you could say (although economists would likely not) that the Grey family economic efficiency is the ratio:

Created value (assets and acceptable services) gained

 Grey ecological system (debt/opportunity cost & freedom) sacrificed

This quest for efficiency can be equated to the sustainability economic theory of Comprehensive Efficiency Identity, which considers the challenge for the macro economy for now and for the future i.e. to the efficiency with which capital (MMK and NK) is used to provide life supporting and life-enhancing services.

Overall ecological-economic efficiency is the ratio:

MMK services gained

Ecosystem services sacrificed

where MMK is man made capital and Ecosystem or NK is natural capital.

The  Comprehensive Efficiency Identity uses one primary ratio subdivided into four components,

(1) service efficiency,

(2) throughput efficiency,

(3)  growth efficiency, and

(4)  Sacrifice of ecosystem service ratio.

As I attempt to understand it, this ratio and its components are used when reviewing a service or supply chain and solicit questioning which reflects how efficiently the process, industry, and/or overarching philosophy utlises ecosystem resources to reach the projected/desired level of value creation in product or service.

This ratio recognises that the services we get from man-made capital (the numerator) can come at a cost to the ecosystem services obtained from natural capital (the denominator) and just as in the Grey family ecosystem we want to maximise the services gained whilst minimising the (pay for it later, negative) impact.