Appendix D: A Working Glossary for Earth–Economy Thinking

1 Purpose of this appendix

This book introduced a vocabulary that blends:

  • economics,
  • ecology,
  • systems theory,
  • and policy design.

Many of these words exist elsewhere—but mean something slightly different here.

This glossary is not encyclopedic.

It is operational.

Each term is defined the way it is used in Earth–economy modeling.

2 Core system terms

Stock
A quantity that accumulates over time and carries memory of the past.
Examples: forest area, atmospheric CO₂, soil carbon, human capital.

Flow
A change to a stock per unit time.
Examples: emissions, harvest, regeneration, investment.

Feedback
A loop in which a change in one variable alters another in a way that eventually affects the original variable.
Positive feedback amplifies change; negative feedback stabilizes.

Path / Trajectory
The sequence of system states over time. Sustainability is a property of paths, not moments.

Threshold / Tipping point
A level beyond which system behavior changes qualitatively, often irreversibly.

3 Economic terms (reframed)

Externality
A cost or benefit of an action that falls on others and is not reflected in market prices.

Public good
A good that is non-rival and non-excludable (e.g., climate stability).

Common-pool resource
A resource that is rival but difficult to exclude others from (e.g., fisheries, groundwater).

Partial equilibrium
Analysis that isolates one market while holding others fixed.

General equilibrium
Analysis that allows all markets to adjust simultaneously.

Opportunity cost
What must be given up to obtain something else—including ecological and future losses.

4 Sustainability terms

Natural capital
Stocks of ecosystems and biophysical systems that generate flows of value over time.

Ecosystem services
Benefits people receive from ecosystems (provisioning, regulating, cultural, supporting).

Inclusive wealth
The total value of produced, human, and natural capital.
A society is sustainable if inclusive wealth per person does not decline.

Shadow price
A model-based estimate of an asset’s contribution to future well-being, even without a market price.

Robustness
Performance that remains acceptable across many uncertain futures.

5 Modeling terms

Earth–economy model
An integrated model that represents economies as embedded in biophysical systems, tracking stocks, feedbacks, and futures.

Scenario
A conditional future: if these assumptions hold, then these outcomes follow.

Baseline
A reference scenario representing continuation of assumed trends.

Policy scenario
A scenario that introduces a specific intervention.

Counterfactual
A constructed alternative to what actually happened.

Stress test
Evaluating how a system performs under adverse or uncertain conditions.

6 Design terms

Policy package
A coordinated set of instruments (prices, rules, investments, transfers) designed to work together.

Leakage
When an intervention reduces harm in one place but shifts it elsewhere.

Rebound
When efficiency lowers cost and increases total use.

System design
The practice of shaping rules and incentives to produce desired emergent behavior.

7 The Doughnut lens

Social foundation
The minimum conditions for human dignity and well-being.

Ecological ceiling
The biophysical limits of Earth systems.

Safe-and-just space
The region between social shortfall and ecological overshoot.

In this book, the Doughnut is treated not as metaphor but as:

A constraint on trajectories.

Earth–economy models ask whether paths remain inside it.

8 Exercises

  1. Term translation.
    Choose three terms above.
    Write a sentence using each in a real policy context.

  2. Stock hunt.
    In a news article about the environment, identify:

    • one stock,
    • one flow,
    • one feedback.

  3. Model reading.
    Find a policy report using a “scenario.”
    Rewrite one result in “if–then” form.

This glossary is not meant to be memorized.

It is meant to be used.

Every term is a handle on a system.

And every system is a future in motion.