Sustainable Preferences and Damage Abatement:Value Judgments and Implications for Consumption Streams
This paper examines the implications of adopting alternative value judgements when evaluating future consumption streams in the context of damage abatement. The paper focusses on a form of ‘sustainable preferences’ designed to avoid either a dictatorship by present or by future generations which can arise when using a ‘standard’ social welfare function. Numerical examples are reported, based on a simple growth model, under alternative damage abatement parameters and welfare functions. The results illustrate how sustainable preferences effectively reduce the damages on future consumption by shifting consumption from the present to the future. This implies an intergenerational trade-off. An explicit policy of damage abatement under a standard social welfare function implies a similar intergenerational trade-off. However, the results suggest that damage abatement does not penalise current generations as much under sustainable preferences as it does under standard value judgements
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia|
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Web page: http://fbe.unimelb.edu.au/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Creedy & Ross Guest, 2006.
"Population Ageing And Intertemporal Consumption: Representative Agent Versus Social Planner,"
Department of Economics - Working Papers Series
972, The University of Melbourne.
- Creedy, John & Guest, Ross, 2008. "Population ageing and intertemporal consumption: Representative agent versus social planner," Economic Modelling, Elsevier, vol. 25(3), pages 485-498, May.
- Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
- Graciela Chichilnisky, 1997. "What Is Sustainable Development?," Land Economics, University of Wisconsin Press, vol. 73(4), pages 467-491.
- David I. Laibson, 1996. "Hyperbolic Discount Functions, Undersaving, and Savings Policy," NBER Working Papers 5635, National Bureau of Economic Research, Inc.
- Stavins, Robert & Wagner, Alexander & Wagner, Gernot, 2002.
"Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity,"
Working Paper Series
rwp02-018, Harvard University, John F. Kennedy School of Government.
- 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.
- Stavins, Robert & Wagner, Alexander & Wagner, Gernot, 2002. "Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity," Discussion Papers dp-02-29, Resources For the Future.
- Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
- Solow, Robert, 1993. "An almost practical step toward sustainability," Resources Policy, Elsevier, vol. 19(3), pages 162-172, September.
- Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, Oxford University Press, vol. 88(2), pages 312-319.
- Padilla, Emilio, 2002. "Intergenerational equity and sustainability," Ecological Economics, Elsevier, vol. 41(1), pages 69-83, April.
- Li, Chuan-Zhong & Lofgren, Karl-Gustaf, 2000. "Renewable Resources and Economic Sustainability: A Dynamic Analysis with Heterogeneous Time Preferences," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 236-250, November.
When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:1026. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katherine Perez)
If references are entirely missing, you can add them using this form.