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A characterization of sustainability with indicators

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  • Martinet, Vincent

Abstract

Economists favor the use of criteria to characterize sustainability. In practice, policy-makers use indicators, i.e., measurements based on the current economic state and decisions, representing given sustainability issues. In this paper, I introduce a criterion characterizing sustainability with indicators and thresholds acting as constraints. I interpret the thresholds as minimal rights to be guaranteed to all generations, and define sustainable trajectories as those satisfying all the constraints at all times. The new criterion is a "generalized" maximin criterion. The approach is applied to a simple production-consumption economy with non-renewable resources. To derive some policy recommendations on the use of indicators to deal with sustainability, I discuss the implications of such a criterion in terms of trade-off between sustainability thresholds, efficiency, and time-consistency. In particular, the resulting problem is time-inconsistent, and sustainability thresholds may be revised over time. Following the time-inconsistent policy based on indicators, with dynamic revision of the thresholds, may, however, result in a sustained utility path, and even in utility growth.

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  • Martinet, Vincent, 2011. "A characterization of sustainability with indicators," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 183-197, March.
  • Handle: RePEc:eee:jeeman:v:61:y:2011:i:2:p:183-197
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    Citations

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    Cited by:

    1. Ngo Long & Vincent Martinet, 2018. "Combining rights and welfarism: a new approach to intertemporal evaluation of social alternatives," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(1), pages 35-64, January.
    2. Stergios Athanasoglou & Valentina Bosetti & Laurent Drouet, 2017. "A Simple Framework for Climate-Change Policy under Model Uncertainty," Working Papers 2017.13, Fondazione Eni Enrico Mattei.
    3. Martin F. Quaas & Ralph Winkler, 2017. "A Market Mechanism for Sustainable and Efficient Resource Use under Uncertainty," CESifo Working Paper Series 6524, CESifo Group Munich.
    4. Gerlagh, Reyer, 2017. "Generous Sustainability," Ecological Economics, Elsevier, vol. 136(C), pages 94-100.
    5. repec:laf:wpaper:201201 is not listed on IDEAS
    6. Lin, Yu-Hsuan, 2015. "Sustainability and International Environmental Agreements," MPRA Paper 83823, University Library of Munich, Germany.
    7. Doyen, L. & Martinet, V., 2012. "Maximin, viability and sustainability," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1414-1430.
    8. Vincent Martinet & Julio Peña-Torres & Michel Lara & Hector Ramírez C., 2016. "Risk and Sustainability: Assessing Fishery Management Strategies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 683-707, August.
    9. Péreau, J.-C. & Doyen, L. & Little, L.R. & Thébaud, O., 2012. "The triple bottom line: Meeting ecological, economic and social goals with individual transferable quotas," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 419-434.
    10. Vincent Martinet & Michel de Lara & Julio Peña & Héctor Ramirez, 2012. "Risk and Sustainability: Assessing Fisheries Management Strategies," ILADES-Georgetown University Working Papers inv276, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
    11. Louis Dupuy, 2012. "International Trade and Sustainability : A survey," Working Papers hal-00701426, HAL.
    12. Grossmann, Volker & Steger, Thomas M. & Trimborn, Timo, 2013. "The macroeconomics of TANSTAAFL," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 76-85.
    13. Vincent Martinet & Pedro Gajardo & Michel De Lara & Héctor Ramírez Cabrera, 2011. "Bargaining with intertemporal maximin payoffs," EconomiX Working Papers 2011-7, University of Paris Nanterre, EconomiX.
    14. Fleurbaey, Marc, 2015. "On sustainability and social welfare," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 34-53.
    15. Susanna Sironen & Jyri Seppälä & Pekka Leskinen, 2015. "Towards more non-compensatory sustainable society index," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 17(3), pages 587-621, June.

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