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Intergenerational equity, efficiency, and constructibility

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  • Luc Lauwers

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Abstract

Global environmental issues - like biodiversity conservation or climate change - are in reality long term issues that are not properly taken into account with traditional models that incorporate the impatience axiom manifested in fixed discount factors and in the use of present discounted utility criteria. When both the short and the very long run are important, one can appeal to overtaking criteria and Chichilnisky criteria. Unfortunately, overtaking criteria are highly incomplete. In order to decrease this incompleteness, stronger anonymity (or equity) axioms were developed. I show that a maximal anonymity axiom compatible with Pareto is a non-constructible object; its existence relies on the Axiom of Choice. The Chichilnisky criterion is based upon two axioms: non dictatorship of the present and non dictatorship of the future. Here, the very long run is captured by a finitely additive measure. Such a measure is a non-constructible object and has therefore no explicit description.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 49 (2012)
Issue (Month): 2 (February)
Pages: 227-242

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Handle: RePEc:spr:joecth:v:49:y:2012:i:2:p:227-242

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Web page: http://link.springer.de/link/service/journals/00199/index.htm

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Related research

Keywords: Intergenerational justice; Sustainability; Chichilnisky’s criterion; Overtaking; Axiom of Choice; D63; D71; Q01;

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References

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  1. Geir B. Asheim, 2010. "Intergenerational Equity," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 197-222, 09.
  2. M. Fleurbaey & P. Michel, 1997. "Intertemporal equity and the extension of the Ramsey criterion," THEMA Working Papers 97-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  3. Geir B. Asheim & Claude d’Aspremont & Kuntal Banerjee, 2008. "Generalized time-invariant overtaking," Working Papers 08004, Department of Economics, College of Business, Florida Atlantic University.
  4. Kohei Kamaga & Takashi Kojima, 2010. "On the leximin and utilitarian overtaking criteria with extended anonymity," Social Choice and Welfare, Springer, vol. 35(3), pages 377-392, September.
  5. Lauwers, Luc, 2010. "Ordering infinite utility streams comes at the cost of a non-Ramsey set," Journal of Mathematical Economics, Elsevier, vol. 46(1), pages 32-37, January.
  6. Franck Lecocq & Jean-Charles Hourcade, 2012. "Unspoken ethical issues in the climate affair: Insights from a theoretical analysis of negotiation mandates," Economic Theory, Springer, vol. 49(2), pages 445-471, February.
  7. Asheim, Geir B. & Mitra, Tapan, 2010. "Sustainability and discounted utilitarianism in models of economic growth," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 148-169, March.
  8. Graciela Chichilnisky, 1996. "An axiomatic approach to sustainable development," Social Choice and Welfare, Springer, vol. 13(2), pages 231-257, April.
  9. Asheim, Geir B. & Mitra, Tapan & Tungodden, Bertil, 2006. "Sustainable recursive social welfare functions," Memorandum 18/2006, Oslo University, Department of Economics.
  10. Armon Rezai & Duncan Foley & Lance Taylor, 2012. "Global warming and economic externalities," Economic Theory, Springer, vol. 49(2), pages 329-351, February.
  11. Geir B. Asheim & Kuntal Banerjee, 2010. "Fixed-step anonymous overtaking and catching-up," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 149-165.
  12. Li, Chuan-Zhong & Lofgren, Karl-Gustaf, 2000. "Renewable Resources and Economic Sustainability: A Dynamic Analysis with Heterogeneous Time Preferences," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 236-250, November.
  13. Francisco Alvarez-Cuadrado & Ngo Van Long, 2007. "A Mixed Bentham-Rawls Criterion For Intergenerational Equity: Theory And Implications," Departmental Working Papers 2007-03, McGill University, Department of Economics.
  14. Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
  15. Chichilnisky, Graciela, 2009. "The topology of fear," Journal of Mathematical Economics, Elsevier, vol. 45(12), pages 807-816, December.
  16. John Chipman & Guoqiang Tian, 2012. "Detrimental externalities, pollution rights, and the “Coase theorem”," Economic Theory, Springer, vol. 49(2), pages 309-327, February.
  17. Luc LAUWERS, 2010. "Purely finitely additive measures are non-constructible objects," Center for Economic Studies - Discussion papers ces10.10, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  18. Christopher Chambers, 2009. "Intergenerational equity: sup, inf, lim sup, and lim inf," Social Choice and Welfare, Springer, vol. 32(2), pages 243-252, February.
  19. Zame, William R., 2007. "Can intergenerational equity be operationalized?," Theoretical Economics, Econometric Society, vol. 2(2), June.
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Citations

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Cited by:
  1. Marc Fleurbaey & Stéphane Zuber, 2013. "Inequality aversion and separability in social risk evaluation," Economic Theory, Springer, vol. 54(3), pages 675-692, November.
  2. Burniaux, Jean-Marc & Oliveira Martins, Joaquim, 2012. "Carbon leakages : a general equilibrium view," Economics Papers from University Paris Dauphine 123456789/7970, Paris Dauphine University.
  3. John Chipman & Guoqiang Tian, 2012. "Detrimental externalities, pollution rights, and the “Coase theorem”," Economic Theory, Springer, vol. 49(2), pages 309-327, February.
  4. Alain Ayong Le Kama & Thai Ha-Huy & Cuong Le Van & Katheline Schubert, 2014. "A never-decisive and anonymous criterion for optimal growth models," Economic Theory, Springer, vol. 55(2), pages 281-306, February.
  5. John A Weymark, . "Social Welfare Functions," Vanderbilt University Department of Economics Working Papers vuecon-sub-13-00018, Vanderbilt University Department of Economics.
  6. Prajit Dutta & Roy Radner, 2012. "Capital growth in a global warming model: will China and India sign a climate treaty?," Economic Theory, Springer, vol. 49(2), pages 411-443, February.
  7. Elinor Ostrom, 2012. "Nested externalities and polycentric institutions: must we wait for global solutions to climate change before taking actions at other scales?," Economic Theory, Springer, vol. 49(2), pages 353-369, February.

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