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An Environmental-Economic Measure of Sustainable Development

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  • Robert D. Cairns
  • Vincent Martinet

Abstract

A central issue in the study of sustainable development is the interplay of growth and sacrifice in a dynamic economy. This paper investigates the relationship among current consumption, growth, and sustained consumption in two canonical, stylized economies and in a more general context. It is found that the maximin value measures what is sustainable and provides the limit to growth. Maximin value is interpreted as an environmental-economic carrying capacity and current consumption or utility as an environmental-economic footprint. The time derivative of maximin value is interpreted as net investment in sustainability improvement. It is called durable savings to distinguish it from genuine savings, usually computed with discounted utilitarian prices.

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File URL: http://economix.fr/pdf/dt/2012/WP_EcoX_2012-02.pdf
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Bibliographic Info

Paper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2012-2.

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Length: 34 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:drm:wpaper:2012-2

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Keywords: sustained development; growth; maximin; sustainability indicator;

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  1. Asheim, Geir B. & Buchholz, Wolfgang & Tungodden, Bertil, 2001. "Justifying Sustainability," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 252-268, May.
  2. Partha Dasgupta, 2009. "The Welfare Economic Theory of Green National Accounts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(1), pages 3-38, January.
  3. Tapan Mitra & Geir B Asheim & Wolfgang Buchholz & Cees Withagen, 2012. "Characterizing the Sustainability Problem in an Exhaustible Resource Model," OxCarre Working Papers 083, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  4. Martinet, V. & Doyen, L., 2007. "Sustainability of an economy with an exhaustible resource: A viable control approach," Resource and Energy Economics, Elsevier, vol. 29(1), pages 17-39, January.
  5. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2011. "“A dynamic analysis of human welfare in a warming planet”," Journal of Public Economics, Elsevier, vol. 95(11), pages 1607-1620.
  6. John Hartwick, 1976. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," Working Papers 220, Queen's University, Department of Economics.
  7. Geir B. Asheim & Wolfgang Buchholz & John M. Hartwick & Tapan Mitra & Cees A. Withagen, 2005. "Constant Savings Rates and Quasi-Arithmetic Population Growth under Exhaustible Resource Constraints," CESifo Working Paper Series 1573, CESifo Group Munich.
  8. Antoine d'Autume & Katheline Schubert, 2009. "Zero discounting and optimal paths of depletion of an exhaustible resource with an amenity value," Documents de travail du Centre d'Economie de la Sorbonne 09012, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  9. Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-65.
  10. Cairns, Robert D. & Long, Ngo Van, 2006. "Maximin: a direct approach to sustainability," Environment and Development Economics, Cambridge University Press, vol. 11(03), pages 275-300, June.
  11. Vincent Martinet & Luc Doyen, 2010. "Maximin, Viability and Sustainability," EconomiX Working Papers 2010-19, University of Paris West - Nanterre la Défense, EconomiX.
  12. repec:ecl:ucdeco:09-5 is not listed on IDEAS
  13. Pezzey, J.C.V.John C. V., 2004. "One-sided sustainability tests with amenities, and changes in technology, trade and population," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 613-631, July.
  14. Asheim, Geir B., 2007. "Can NNP be used for welfare comparisons?," Environment and Development Economics, Cambridge University Press, vol. 12(01), pages 11-31, February.
  15. Cairns, Robert D. & Tian, Huilan, 2010. "Sustained development of a society with a renewable resource," Journal of Economic Dynamics and Control, Elsevier, vol. 34(6), pages 1048-1061, June.
  16. Chichilnisky, Graciela & Heal, Geoffrey & Beltratti, Andrea, 1995. "The Green Golden Rule," Economics Letters, Elsevier, vol. 49(2), pages 175-179, August.
  17. Burmeister, Edwin & Hammond, P J, 1977. "Maximin Paths of Heterogeneous Capital Accumulation and the Instability of Paradoxical Steady States," Econometrica, Econometric Society, vol. 45(4), pages 853-70, May.
  18. Dasgupta, Partha & M Ler, Karl-G Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 69-93, February.
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