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Sustainability when capital management has stochastic consequences

Author

Listed:
  • Kjell Arne Brekke

    () (Centre for Development and the Environment, University of Oslo, P.O. Box 1116, Blindern, N-0317 Oslo, Norway)

  • Geir B. Asheim

    () (Department of Economics, University of Oslo, P.O. Box 1095 Blindern, N-0317 Oslo, Norway)

Abstract

Sustainability is usually defined as a requirement of each generation to manage its stocks of man-made and natural capital such that the utility that it ensures itself can be shared by all future generations. Here we extend this definition to the case where capital management does not have deterministic consequences. A characterization is offered where the sustainability of one generation's behavior can be determined by comparing its utility with the utility of the succeeding generation, provided that the latter behaves in a sustainable manner. The properties of the definition are investigated and illustrated.

Suggested Citation

  • Kjell Arne Brekke & Geir B. Asheim, 2002. "Sustainability when capital management has stochastic consequences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(4), pages 921-940.
  • Handle: RePEc:spr:sochwe:v:19:y:2002:i:4:p:921-940
    Note: Received: 26 April 1994/Accepted: 15 April 2002
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    Citations

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    Cited by:

    1. Asheim, Geir B. & Zuber, Stéphane, 2016. "Evaluating intergenerational risks," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 104-117.
    2. Asheim, Geir B. & Buchholz, Wolfgang & Tungodden, Bertil, 2001. "Justifying Sustainability," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 252-268, May.
    3. Frank Krysiak, 2009. "Sustainability and its relation to efficiency under uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 297-315, November.
    4. Derissen, Sandra & Quaas, Martin F. & Baumgärtner, Stefan, 2011. "The relationship between resilience and sustainability of ecological-economic systems," Ecological Economics, Elsevier, vol. 70(6), pages 1121-1128, April.
    5. Minh Ha-Duong & Nicolas Treich, 1999. "Recursive Intergenerational Utility in Global Climate Risk Modeling," CIRANO Working Papers 99s-40, CIRANO.
    6. Paolo Giovanni Piacquadio, 2014. "Fair Intergenerational Utilitarianism: Risk, its Resolution over Time, and Discounting," CESifo Working Paper Series 5143, CESifo Group Munich.
    7. Gerlagh, Reyer, 2017. "Generous Sustainability," Ecological Economics, Elsevier, vol. 136(C), pages 94-100.
    8. Baumgärtner, Stefan & Quaas, Martin F., 2009. "Ecological-economic viability as a criterion of strong sustainability under uncertainty," Ecological Economics, Elsevier, vol. 68(7), pages 2008-2020, May.
    9. Piacquadio, Paolo G., 2015. "The Ethics of Intergenerational Risk," Memorandum 15/2015, Oslo University, Department of Economics.
    10. Fleurbaey, Marc, 2015. "On sustainability and social welfare," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 34-53.
    11. repec:eee:matsoc:v:94:y:2018:i:c:p:19-31 is not listed on IDEAS
    12. Frank Krysiak, 2009. "Risk Management as a Tool for Sustainability," Journal of Business Ethics, Springer, vol. 85(3), pages 483-492, April.

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