INTRODUCTION AND EXECUTIVE SUMMARY There was a time when by the "new economics" was meant the Keynesian economics, which was notable as a response to the depression of the 1930s. The new economics that is struggling to grow today is something very different. It constitutes our response to a new set of problems which was only dimly perceived earlier, but has steadily grown in urgency over the last quarter of this century. It attempts to put forward new ideas about how to organise the foundations of a sustainable economy at this juncture in history when there are clear signs that the global economy cannot move much further along the accustomed paths of industrial growth without ending up in total disaster. For the true welfare economist the horizons of enquiry are shifting again in a new direction.... The study of wealth and welfare stands at a new crossroads. Amlan Datta (1997)1 This Briefing was commissioned by the Institute for Prospective Technological Studies (IPTS) on behalf of the Forward Studies Unit of the European Commission in order to provide "a value-added review of recent alternative-economic-paradigms work as it pertains to sustainability, with a particular emphasis on the practical/policy implications".2 Sustainable development has been defined in many different ways. Perhaps the best known definition is that in Our Common Future (page 43) - "development that meets the needs of the present without compromising the ability of future generations to meet their own needs".3 Conventional economic progress fails to meet the needs of many millions of people today and compromises the ability of future generations to meet theirs. The new economics reflects the growing worldwide demand for new ways of economic life and thought that will conserve the Earth and its resources, and empower people to meet their own needs and the needs of others. There is thus a close affinity between sustainable development and the new economics. Both recognise the need for change in today's direction of development and today's ways of economic life and thought. In general, the new economics brings a more radical perspective to sustainable development, and implies more far-reaching changes, than