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A characterization of sustainability with indicators

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  • Martinet, Vincent

Abstract

Economists favor the use of criteria to characterize sustainability. In practice, policy-makers use indicators, i.e., measurements based on the current economic state and decisions, representing given sustainability issues. In this paper, I introduce a criterion characterizing sustainability with indicators and thresholds acting as constraints. I interpret the thresholds as minimal rights to be guaranteed to all generations, and define sustainable trajectories as those satisfying all the constraints at all times. The new criterion is a "generalized" maximin criterion. The approach is applied to a simple production-consumption economy with non-renewable resources. To derive some policy recommendations on the use of indicators to deal with sustainability, I discuss the implications of such a criterion in terms of trade-off between sustainability thresholds, efficiency, and time-consistency. In particular, the resulting problem is time-inconsistent, and sustainability thresholds may be revised over time. Following the time-inconsistent policy based on indicators, with dynamic revision of the thresholds, may, however, result in a sustained utility path, and even in utility growth.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 61 (2011)
Issue (Month): 2 (March)
Pages: 183-197

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Handle: RePEc:eee:jeeman:v:61:y:2011:i:2:p:183-197

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Sustainability Indicators Criterion Intergenerational equity Minimal rights Time-consistency;

References

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Citations

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Cited by:
  1. Ngo Van Long & Vincent Martinet, 2012. "Combining Rights and Welfarism: A New Approach to Intertemporal Evaluation of Social Alternatives," Cahiers de recherche 01-2012, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  2. Louis Dupuy, 2012. "International Trade and Sustainability : A survey," Working Papers hal-00701426, HAL.
  3. repec:laf:wpaper:201201 is not listed on IDEAS
  4. Vincent Martinet & Michel de Lara & Julio Peña & Héctor Ramirez, 2012. "Risk and Sustainability: Assessing Fisheries Management Strategies," ILADES-Georgetown University Working Papers inv276, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  5. Vincent Martinet & Pedro Gajardo & Michel De Lara & Héctor Ramírez Cabrera, 2011. "Bargaining with intertemporal maximin payoffs," EconomiX Working Papers 2011-7, University of Paris West - Nanterre la Défense, EconomiX.
  6. Louis Dupuy, 2012. "International Trade and Sustainability: A survey," Larefi Working Papers 1201, Larefi, Université Bordeaux 4.

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