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“Intergenerational justice when future worlds are uncertain”

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  • Joaquim Silvestre
  • Joaquim Silvestre
  • John E. Roemer
  • Joaquim Silvestre

    (Department of Economics, University of California Davis)

Abstract

Let there be a positive (exogenous) probability that, at each date, the human species will disappear. We postulate an Ethical Observer (EO) who maximizes intertemporal welfare under this uncertainty, with expected-utility preferences. Various social welfare criteria entail alternative von Neumann- Morgenstern utility functions for the EO: utilitarianism, Rawlsianism, and an extension of the latter that corrects for the size of population. Our analysis covers, first, a cake-eating economy, where the utilitarian and Rawlsian recommend the same allocation. Second, a productive economy with education and capital. There, however, the recommendations of the two Ethical Observers are in general different. But when the utilitarian program diverges, then it is optimal for the extended Rawlsian to ignore the uncertainty concerning the possible disappearance of the human species in the future. We conclude discussing the implications for intergenerational welfare maximization in the presence of global warming.

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Bibliographic Info

Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 94.

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Length: 48
Date of creation: 26 Mar 2009
Date of revision:
Handle: RePEc:cda:wpaper:09-4

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Keywords: discounted utilitarianism; Rawlsian; sustainability; maximin; uncertainty; expected utility; von Neumann-Morgenstern; dynamic welfare maximization;

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References

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  1. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2008. "A dynamic analysis of human welfare in a warming planet," Economics Working Papers 1110, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 2010.
  2. Basu, Kaushik & Mitra, Tapan, 2003. "Utilitarianism for Infinite Utility Streams: A New Welfare Criterion and Its Axiomatic Characterization," Working Papers 03-05, Cornell University, Center for Analytic Economics.
  3. Dasgupta, Partha, 1974. "On some alternative criteria for justice between generations," Journal of Public Economics, Elsevier, vol. 3(4), pages 405-423, November.
  4. Phelps, Edmund S & Riley, J G, 1978. "Rawlsian Growth: Dynamic Programming of Capital and Wealth for Intergeneration "Maximin" Justice," Review of Economic Studies, Wiley Blackwell, vol. 45(1), pages 103-20, February.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. What intertemporal policy objective to take?
    by Economic Logician in Economic Logic on 2009-12-09 04:04:00
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Cited by:
  1. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2009. "A Dynamic Analysis of Human Welfare in a Warming Planet," Cowles Foundation Discussion Papers 1673R, Cowles Foundation for Research in Economics, Yale University.
  2. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2012. "Should we sustain? And if so, sustain what? Consumption or the quality of life?," Working Papers 1222, University of California, Davis, Department of Economics.
  3. Ingmar Schumacher, 2014. "The Aggregation Dilemma in Climate Change Policy Evaluation," Working Papers 2014-428, Department of Research, Ipag Business School.
  4. Lombardi, Michele & Miyagishima, Kaname & Veneziani, Roberto, 2013. "Liberal Egalitarianism and the Harm Principle," MPRA Paper 48458, University Library of Munich, Germany.
  5. W. Botzen & Jeroen Bergh, 2014. "Specifications of Social Welfare in Economic Studies of Climate Policy: Overview of Criteria and Related Policy Insights," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 58(1), pages 1-33, May.
  6. Wojciech Rybicki, 2012. "Discounting and ideas of intergenerational equity and sustainability," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 1, pages 63-84.
  7. Wolf, Stephan, 2010. "An intergenerational social contract for common resource usage: A reality-check for Harsanyi and Rawls," The Constitutional Economics Network Working Papers 02-2010, University of Freiburg, Department of Economic Policy and Constitutional Economic Theory.

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