Perhaps the greatest disagreement in sustainability science stems from the question: Does GDP invariably indicate environmental impact? Some say yes it must, while others adamantly say no, but many respondents neither proffer nor accept anything definitive. Their general sense seems to be that GDP has corresponded with environmental impact but that, hypothetically, if the economy was structured differently, GDP could grow without concomitant increases in environmental impact. That hypothesis, however, is not congruent with the ecological principles pertaining to trophic levels. In the economy of nature, producers (i.e., plants) are required to support primary consumers (herbivores), which support secondary consumers (omnivores and predators) and service providers (e.g., scavengers). In the human economy, producers (i.e., farmers and extractors) are required to support primary consumers (heavy manufacturing sectors), which support secondary consumers (light manufacturing) and service providers (e.g., transportation). The trophic theory of money is that money originates via the agricultural surplus that frees the hands for the division of labor into manufacturing and service sectors, and therefore reflects the environmental impact of human economic activity. The primary corollary is that stocks and flows of money (such as GDP) indicate the amount of agricultural surplus and related extractive activity at the trophic base of the economy, and therefore the environmental impact of such activity.
Results/Conclusions
The trophic theory of money has anthropological and ecological support. Money originated only in societies where agricultural success was widespread and long-lasting. Today, GDP is strongly correlated with environmental impact measures such as biodiversity loss, greenhouse gas emissions, pollution in general, and ecological footprint. Results are preliminary, but in every case investigated thus far, strong correlation is accompanied by compelling evidence for causality. With biodiversity loss, for example, the expansion of the human trophic base occurs at the expense of wildlife habitats in the USA. GDP is also strongly correlated with money supplies including M0 and M1. The tight linkage between GDP and money supplies is reflected in the work of the Federal Reserve, which strives to prevent inflation or deflation of money supplies relative to real production (such as measured via GDP). Aside from inflation, technological progress and international trade affect the precise relationship of real (i.e., inflation-adjusted) money supplies to environmental impact in any given country, without affecting the underlying trophic structure. Technological progress itself is a function of GDP and therefore the agro-extractive surplus at the trophic base of the economy.