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Impatience and Intergenerational Equity in a Model of Sustainable Growth

Author

Listed:
  • Lee Endress

    (Asia Pacific Center for Security Studies, Hawaii)

  • Sittidaj Pongkijvorasin

    (Chulalongkorn University)

  • James Roumasset

    (Department of Economics, University of Hawaii at Manoa)

  • Basharat Pitafi

    (Southern Illinois University, Carbondale)

Abstract

We argue that intergenerational neutrality has been prematurely excluded from the dialogue on sustainable growth. By incorporating Burton’s distinction between intragenerational and intergenerational discounting into a model suitable for analyzing sustainability issues, we are able to accommodate some of the underlying concerns. We show that in an economy with a renewable resource, eschewing intergenerational discounting leads to the implication of a sustained growth path, without the necessity of a sustainability constraint. We find that green net national product remains constant along the optimal approach path to golden rule consumption. This avoids the paradox that maximizing sustainable income leads to unsustained consumption and income.

Suggested Citation

  • Lee Endress & Sittidaj Pongkijvorasin & James Roumasset & Basharat Pitafi, 2009. "Impatience and Intergenerational Equity in a Model of Sustainable Growth," Working Papers 200906, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:200906
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_09-6.pdf
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    References listed on IDEAS

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    2. Endress, Lee H. & Roumasset, James A. & Zhou, Ting, 2005. "Sustainable growth with environmental spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 58(4), pages 527-547, December.
    3. Intergovernmental Panel on Climate Change IPCC, 2008. "Intergovernmental Panel on Climate Change: Fourth Assessment Report: Climate Change 2007: Synthesis Report," Working Papers id:1325, eSocialSciences.
    4. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    5. Dasgupta, Partha, 2001. "Human Well-Being and the Natural Environment," OUP Catalogue, Oxford University Press, number 9780199247882.
    6. Robert M. Solow, 1974. "The Economics of Resources or the Resources of Economics," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 12, pages 257-276, Palgrave Macmillan.
    7. Geoffrey Heal (ed.), 1993. "The Economics of Exhaustible Resources," Books, Edward Elgar Publishing, number 554.
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    Cited by:

    1. Lee Endress, 2013. "Sustainable Development and the Hawaii Clean Energy Initiative," Working Papers 2013-4, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.

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    More about this item

    Keywords

    Sustainable development; intergenerational equity; intra-generational discounting; renewable resources; green net national product;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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