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Quantifying environmental sustainability using an aggregate index reflecting increasing marginal damage costs

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  • Jan Bentzen

Abstract

In an environmental economics context increasing marginal damage costs are usually assumed, and a methodology for calculating a sustainability index in accordance with this assumption is presented. The aggregate index is constructed from an n-element vector including the values of the (n) subset indicators, and the length of this vector in Euclidian space is perceived as an alternative measurement scale. Increasing values for any of the elements in the vector will influence the total result more than proportionately and hence in accordance with an assumption of increasing marginal damage costs.

Suggested Citation

  • Jan Bentzen, 2011. "Quantifying environmental sustainability using an aggregate index reflecting increasing marginal damage costs," Applied Economics Letters, Taylor & Francis Journals, vol. 18(14), pages 1383-1386.
  • Handle: RePEc:taf:apeclt:v:18:y:2011:i:14:p:1383-1386
    DOI: 10.1080/13504851.2010.537626
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    References listed on IDEAS

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    1. Bohringer, Christoph & Jochem, Patrick E.P., 2007. "Measuring the immeasurable -- A survey of sustainability indices," Ecological Economics, Elsevier, vol. 63(1), pages 1-8, June.
    2. Stavins, Robert N. & Wagner, Alexander F. & Wagner, Gernot, 2003. "Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity," Economics Letters, Elsevier, vol. 79(3), pages 339-343, June.
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    Cited by:

    1. Mainali, Brijesh & Silveira, Semida, 2015. "Using a sustainability index to assess energy technologies for rural electrification," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1351-1365.

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