The economy is a subset of the natural ecosystem. The ecosystem acts both as a source and a sink. Economic growth cannot go on indefinitely unless protection is rendered towards the ecosystem. Economic growth has brought about degradation to the environment and prompted an exploration of energy sources beyond traditional means. Hence, policy options should be developed to address the Economic Growth and Ecosystem Preservation nexus.
An economy cannot grow forever without any consideration to the ecosystem. For sustainable economic growth, there must be a balance between economic growth and ecosystem utilization.
Moderated economic growth and regular maintenance of the ecosystem allow natural resources to realize its full economic potential. A slower rate of economic growth relative to the rate of environmental degradation ensures a balance between economic growth and environmental sustainability.
Preservation of the ecosystem can be examined from the consumer and producer. Consumers could delay present consumption for future which reduces the demand from the environment. Producers could engage green production methods which are less taxing to the environment.
The ecosystem could also be preserved with sustainable initiatives which enhances its source and sink capacity.
Development of policy options requires an appreciation that energy and environmental policies be considered in tandem in order to achieve sustainable growth.
The cases which have been studied include resource rich economies (Australia and Canada); Asian economies (China and Korea); and city states (Singapore and Taiwan).