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Intergenerational justice when future worlds are uncertain

Author

Listed:
  • Joaquim Silvestre
  • Joaquim Silvestre
  • John E. Roemer
  • Joaquim Silvestre

    (Department of Economics, University of California Davis)

Abstract

Let there be a positive (exogenous) probability that, at each date, the human species will disappear. We postulate an Ethical Observer (EO) who maximizes intertemporal welfare under this uncertainty, with expected-utility preferences. Various social welfare criteria entail alternative von Neumann- Morgenstern utility functions for the EO: utilitarianism, Rawlsianism, and an extension of the latter that corrects for the size of population. Our analysis covers, first, a cake-eating economy, where the utilitarian and Rawlsian recommend the same allocation. Second, a productive economy with education and capital. There, however, the recommendations of the two Ethical Observers are in general different. But when the utilitarian program diverges, then it is optimal for the extended Rawlsian to ignore the uncertainty concerning the possible disappearance of the human species in the future. We conclude discussing the implications for intergenerational welfare maximization in the presence of global warming.

Suggested Citation

  • Joaquim Silvestre & Joaquim Silvestre & John E. Roemer & Joaquim Silvestre, 2009. "Intergenerational justice when future worlds are uncertain," Working Papers 94, University of California, Davis, Department of Economics.
  • Handle: RePEc:cda:wpaper:09-4
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    File URL: http://wp.econ.ucdavis.edu/09-4.pdf
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    References listed on IDEAS

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    1. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    2. E. S. Phelps & J. G. Riley, 1978. "Rawlsian Growth: Dynamic Programming of Capital and Wealth for Intergeneration "Maximin" Justice," Review of Economic Studies, Oxford University Press, vol. 45(1), pages 103-120.
    3. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2011. "“A dynamic analysis of human welfare in a warming planet”," Journal of Public Economics, Elsevier, pages 1607-1620.
    4. Basu, Kaushik & Mitra, Tapan, 2007. "Utilitarianism for infinite utility streams: A new welfare criterion and its axiomatic characterization," Journal of Economic Theory, Elsevier, vol. 133(1), pages 350-373, March.
    5. Dasgupta, Partha, 1974. "On some alternative criteria for justice between generations," Journal of Public Economics, Elsevier, vol. 3(4), pages 405-423, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michele Lombardi & Roberto Veneziani, 2009. "Liberal Egalitarianism and the Harm Principle," Global COE Hi-Stat Discussion Paper Series gd09-078, Institute of Economic Research, Hitotsubashi University.
    2. Wolf, Stephan, 2010. "An intergenerational social contract for common resource usage: A reality-check for Harsanyi and Rawls," The Constitutional Economics Network Working Papers 02-2010, University of Freiburg, Department of Economic Policy and Constitutional Economic Theory.
    3. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2011. "“A dynamic analysis of human welfare in a warming planet”," Journal of Public Economics, Elsevier, pages 1607-1620.
    4. JU, Biung-Ghi & MORENO-TERNERO, Juan, 2014. "Fair allocation of disputed properties," CORE Discussion Papers 2014024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. repec:spr:sochwe:v:49:y:2017:i:3:d:10.1007_s00355-016-0977-9 is not listed on IDEAS
    6. Ingmar Schumacher, 2014. "The Aggregation Dilemma in Climate Change Policy Evaluation," Working Papers 2014-428, Department of Research, Ipag Business School.
    7. Humberto Llavador & John E. Roemer & Joaquim Silvestre, 2013. "Should we sustain? And if so, sustain what? Consumption or the quality of life?," Chapters,in: Handbook on Energy and Climate Change, chapter 30, pages 639-665 Edward Elgar Publishing.
    8. W. Botzen & Jeroen Bergh, 2014. "Specifications of Social Welfare in Economic Studies of Climate Policy: Overview of Criteria and Related Policy Insights," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 1-33, May.
    9. Wojciech Rybicki, 2012. "Discounting and ideas of intergenerational equity and sustainability," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 1, pages 63-84.
    10. Geir B. Asheim, 2017. "Sustainable growth," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 825-848, December.
    11. repec:wly:econjl:v:126:y:2016:i:597:p:2173-2196 is not listed on IDEAS

    More about this item

    Keywords

    discounted utilitarianism; Rawlsian; sustainability; maximin; uncertainty; expected utility; von Neumann-Morgenstern; dynamic welfare maximization;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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