Sustainable Development Planning: Allowing for Future Generations, Time and Uncertainty
AbstractThe most widely accepted view of sustainable economic development is that it is economic development ensuring that each succeeding generation is no less well off than its predecessor. This mainstream approach, however, has several limitations. It can, for example, result in a development path being chosen in which at least some generations could be better off with none being worse off, that is a Paretian inefficient development path. The above mentioned criterion for sustainable development has been justified on the basis of Rawls’ principle of justice, even though the Paretian inefficient case mentioned is inconsistent with this principle. Nonetheless, even if Rawls’ principle is correctly applied to economic development choices, it is doubtful whether it would result in the most desirable social outcome. An alternative criterion is suggested. Apart from this, Rawls’ principle is anthropocentric and influenced by implicit cosmic assumptions. There are also several other philosophical and practical issues that need to be resolved in planning for sustainable development. These include how many future generations should be taken into account in undertaking planning for sustainable development? Should the welfare of each count equally or should less weight be put on the welfare of more distant generations than less distant ones? Is the latter necessary because of greater uncertainty about more distant events or because current generations only feel empathy for their children and grandchildren? Issues involving these matters have, for example, been raised by Herman Daly and by David Pearce. A related matter is what role should discount rates play in planning for sustainable development. For example, is the use of a low or zero social discount rate appropriate in sustainable development planning? Even the application of zero discount rates to human welfare may fail to result in the choice of an optimal development path. Dealing with the presence of uncertainty about future events (which tends to increase for predictions further into the future) remains a major challenge for sustainable development planning. How should this uncertainty be allowed for? Furthermore, it is necessary to consider the implications of bounded rationality for the processes involved in sustainable development planning, and this aspect is also discussed.
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Bibliographic InfoPaper provided by University of Queensland, School of Economics in its series Economics, Ecology and Environment Working Papers with number 125210.
Date of creation: Jun 2012
Date of revision:
coefficient of concern for future generation; discounting; intergenerational equity; Rawls’ principle of justice; sustainable development; time horizons; Environmental Economics and Policy; Food Security and Poverty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-08 (All new papers)
- NEP-ENV-2012-07-08 (Environmental Economics)
- NEP-HME-2012-07-08 (Heterodox Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Economics, Ecology and Environment Working Papers
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