Discounting and Sustainability
The discounting of future benefits has long been one of the most controversial, and in many ways, unsatisfactory, aspects of benefit -cost analysis. This concern has been heightened by the rise of the environmental movement and, particularly by the debate over sustainable development. The sustainability approach is presented as an alternative to the standard benefit-cost analysis approach to the question of inter-generational equity. Sustainability is in fashion, and, as with all fashionable terms, it has been used in many ways and in support of many different policy agendas. A summary and critique of the literature is given by Ule (1991). I shall interpret sustainability very broadly to encompass two main concerns: (i) The interests of future generations should be given equal weight with our own in making decisions affecting the long term future; (ii) It should not be assumed that capital (that is, technology embodied in produced goods) can be substituted indefinitely to compensate for land (taken broadly to include all the contributions of the natural environment to human welfare, and agricultural production in particular). In this paper, the relationship between the idea of sustainability and the older literature on optimal growth is examined and implications for discounting, income distribution and the treatment of uncertainty are explored.
Volume (Year): 60 (1992)
Issue (Month): 02 (August)
|Contact details of provider:|| Postal: |
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
References listed on IDEAS
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.:
- Lele, Sharachchandra M., 1991. "Sustainable development: A critical review," World Development, Elsevier, vol. 19(6), pages 607-621, June.
- E B Barbier & A Markandya & D W Pearce, 1990.
"Environmental Sustainability and Cost-Benefit Analysis,"
Environment and Planning A,
, vol. 22(9), pages 1259-1266, September.
- E B Barbier & A Markandya & D W Pearce, 1990. "Environmental sustainability and cost - benefit analysis," Environment and Planning A, Pion Ltd, London, vol. 22(9), pages 1259-1266, September.
- John Hartwick, 1976.
"Intergenerational Equity and the Investing of Rents from Exhaustible Resources,"
220, Queen's University, Department of Economics.
- Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December.
- Hartwick, John M, 1978. "Substitution among Exhaustible Resources and Intergenerational Equity," Review of Economic Studies, Wiley Blackwell, vol. 45(2), pages 347-54, June.
When requesting a correction, please mention this item's handle: RePEc:ags:remaae:10340. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.