Question

5. The four-quadrant model of the economy has been named an ecological economics model. a. Please explain the four-quadrat model of the economy and its components. b. Why has the four-quadrant model been called an ecological economics model that seeks to pattern the economy after nature? Please explain.

Answer 1

5. a) Maini (2003) has shown that any country across the world can be placed in one of the four quadrants by plotting forest cover and GDP per capita on the axes in a two-dimensional tabular form.

	Q2 Higher forest area Lower GDP per capita	Q4 Higher forest area Higher GDP per capita
Forest Cover Per Capita (ha/capita)	Q1 Lower forest area Lower GDP per capita	Q3 Lower forest area Higher GDP per capita
	GDP Per Capita (US$/capita)

The above schematic presentation explains the four quadrants. This tabular form represents a way to meaningfully cluster countries as per their priority areas. The two central variables, namely, forest cover and GDP per capita are proxies for economic growth and environmental degradation. These proxy variables are also used to test the Environmental Kuznet Curve (EKC) hypothesis. EKC hypothesis states that there exists an inverted U-shaped relationship between economic growth and environmental degradation. In the present case EKC ppostulates that deforestation increases as income increases. However, after reaching a maximum, as the income level continues to grow, environmental degradation decreases.

b) The four quadrant model is an ecological economics model because it examines the schematic formulation between forest area and GDP per capita as proxies to economic growth and environmental degradation.