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History

The roots of eco-capitalism can be traced back to the late 1960's. The "Tragedy of the Commons" an essay published in 1968 in Science by Garrett Hardin claimed the inevitability of malthusian catastrophe largely because of the policy of liberal or democratic governments to leave family size matters to the family, and enabling the welfare state to willingly care for potential overpopulation. Hardin argued that if families were given freedom of choice in the matter but were removed from a welfare state, that parents choosing to overbear would not have the resources to provide for their "litter", thus solving the problem of overpopulation. This represents an early argument made from an eco-capitalist standpoint; overpopulation would technically be solved by a free market. A collaborator with Garrett Hardin on other works including Managing the Commons, John Baden founded the Political Economy Research Center, now called the Property and Environment Research Center, in 1982. One of the first eco-capitalist organizations created, PERC's mission is "improving environmental quality through property rights and markets."

Traits

The ideology of eco-capitalism was adopted to satisfy two competing needs: 1) the desire for generating profit by businesses in a capitalist society and 2) the urgency for proper actions to address the struggling environment in the face of human activity. Under the doctrine of eco-capitalism, businesses commodify the act of addressing environmental issues.,

The following are common principles in the transition to eco-capitalism.

Full Cost Accounting

Environmental full cost accounting summarizes corporate actions on the basis of the triple bottom line, which is best summarized as "people, planet, and profit". As a concept of corporate social responsibility, full cost accounting not only considers social and economic costs and benefits but also the environmental implications of specific corporate actions.

Genuine Progress Indicator

The current standard of using the Gross Domestic Product (GDP) as an indicator of welfare is criticized for being inaccurate. An alternative to GDP, the Genuine Progress Indicator compensates for the shortcomings of the GDP as a welfare indicator by accounting for environmental harms as well as other factors that affect consumption, such as crime and income inequality.

Pollution credit

Creating perhaps the first major eco-capitalist endorsement, many political and economic institutions support a system of pollution credits. Such a system, which assigns property rights to emissions, is considered to be the most "efficient and effective" way for regulating greenhouse gas emissions in the current neoliberal global economy. Especially in the case of tradable pollution credits, the resulting market-based system of emissions regulation is believed to motivate businesses to invest in technology that reduce greenhouse gas emissions using positive reinforcement (i.e. ability to trade unused credits) and punishment (i.e. the need to buy more credits).

Green consumption

At the conception of the ideology, major theorists of eco-capitalism, Paul Hawken, Lester Brown, and Francis Cairncross, saw an opportunity to establish a different approach to environmentalism in a capitalist society. These theorists thought that not only producers but also consumers could shoulder the social responsibility of environmental restoration if "green technology, green taxes, green labeling, and eco-conscious shopping" existed. The resulting "shopping our way to sustainability" mentality encouraged the development of organic farming, renewable energy, green certifications as well as other eco-friendly practices.