Plimsoll line of the economy

Indian Economy glossary

Also called: Herman Daly's rules · Topic: Environment and Sustainable Development · NCERT: Class 11, Ch 7 "Environment and Sustainable Development"

Meaning

A Plimsoll line is a mark on a ship's side. It shows the maximum safe load, and loading past it can sink the ship. Herman Daly used this image for the economy. The total size of the economy, including its population, must stay within the environment's carrying capacity, which is the limit the environment can support. This is the first of Daly's five rules for sustainable development. The other four are:

  • make technology input-efficient, not input-consuming
  • extract renewable resources no faster than they regenerate
  • use up non-renewable resources no faster than renewable substitutes are created
  • correct the inefficiencies caused by pollution

Example

Suppose a region pumps groundwater faster than rain recharges it. Its economy has gone "below the Plimsoll line". Output may rise for a while, but the resource base is sinking.

Don't confuse with

  • Barbier's definition of sustainable development: Barbier focuses on raising the living standard of the poor at the grassroots. Daly's rules focus on the physical limits of the environment.

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