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One-sided Unsustainability Tests and NNP Measurement with Multiple Consumption Goods

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  • John C. V. Pezzey

    () (Australian National University, Centre for Resource and Environmental Studies
    University of Bath, Department of Economics)

Abstract

In an economy with multiple consumption goods (including environmental amenities) that uniquely maximises the present value of utility with constant or falling augmented green net national product, or zero or negative augmented investment, at any time implies that the economy is unsustainable then. "Augmented" means that time is included as a productive stock, which incorporates future exogenous technical progress and changes in world prices in a unified accounting framework. Examples are given of calculating accounting prices for multiple goods. The practical and philosophical rationale for testing sustainability in a present-value maximising, and therefore fully prescribed, development path is discussed.

Suggested Citation

  • John C. V. Pezzey, 2002. "One-sided Unsustainability Tests and NNP Measurement with Multiple Consumption Goods," Economics and Environment Network Working Papers 0208, Australian National University, Economics and Environment Network.
  • Handle: RePEc:anu:eenwps:0208
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    File URL: http://een.anu.edu.au/download_files/een0208.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:ksb:journl:v:4:y:2011:i:1:p:89-103 is not listed on IDEAS
    2. Geir Asheim & Wolfgang Buchholz & Cees Withagen, 2003. "The Hartwick Rule: Myths and Facts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 129-150, June.
    3. Geir B. Asheim, 2003. "Green national accounting for welfare and sustainability:A Taxonomy Of Assumptions And Results," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 113-130, May.
    4. Haradhan Kumar Mohajan, 2011. "The Real Net National Product in Sustainable Development," KASBIT Business Journals, Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 89-103, December.

    More about this item

    Keywords

    sustainability; net investment; net national product; optimality; green accounting;

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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