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Investing Returns from Depleting Renewable Resource Stocks and Intergenerational Equity


  • John M. Hartwick


We demonstrate the following result: if along dynamically efficient development paths, the net current value of the diminution in natural resources stocks, renewable and non-renewable, is invested in reproducible capital, per capita consumption will remain constant over time in a world of unchanging technology and population. This is an extension of an earlier proposition covering only non-renewable or exhaustible resources.

Suggested Citation

  • John M. Hartwick, 1978. "Investing Returns from Depleting Renewable Resource Stocks and Intergenerational Equity," Working Papers 294, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:294

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    References listed on IDEAS

    1. Beach, Charles M. & MacKinnon, James G., 1978. "Full maximum likelihood estimation of second- order autoregressive error models," Journal of Econometrics, Elsevier, vol. 7(2), pages 187-198, June.
    2. Beach, Charles M & MacKinnon, James G, 1978. "A Maximum Likelihood Procedure for Regression with Autocorrelated Errors," Econometrica, Econometric Society, vol. 46(1), pages 51-58, January.
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    1. Kwabena Asomanin Anaman & Felix Agyei-Sasu, 2014. "The Economic Value of Environmental Capital Inputs Used to Produce the Gross Domestic Product in Ghana, 1993 to 2012," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 74-92, September.
    2. Francisco J. André & Emilio Cerdá, 2001. "A Generalized Production Set. The Production and Recycling Function," Economic Working Papers at Centro de Estudios Andaluces E2001/07, Centro de Estudios Andaluces.
    3. Robert U. Ayres & Jeroen C.J.M. van den Bergh & John M. Gowdy, 1998. "Viewpoint: Weak versus Strong Sustainability," Tinbergen Institute Discussion Papers 98-103/3, Tinbergen Institute.
    4. Barbier,Edward B., 2007. "Natural Resources and Economic Development," Cambridge Books, Cambridge University Press, number 9780521706513, March.
    5. Verchère, Alban, 2011. "Le développement durable en question : analyses économiques autour d’un improbable compromis entre acceptions optimiste et pessimiste du rapport de l’Homme à la Nature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 87(3), pages 337-403, septembre.
    6. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," Discussion Papers dp-02-03, Resources For the Future.
    7. Pezzey, John C.V., 2001. "Optimality, Hartwick’s Rule, and Instruments of Sustainability Policy and Environmental Policy," 2001 Conference (45th), January 23-25, 2001, Adelaide 125833, Australian Agricultural and Resource Economics Society.
    8. Hediger, Werner, 2010. "Welfare and capital-theoretic foundations of corporate social responsibility and corporate sustainability," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(4), pages 518-526, August.
    9. Young, Ralph, 1992. "Evaluating Long-Lived Projects: The Issue Of Inter-Generational Equity," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(03), December.
    10. Withagen, C. A. A. M., 1996. "Sustainability and investment rules," Economics Letters, Elsevier, vol. 53(1), pages 1-6, October.
    11. Andre, Francisco J. & Cerda, Emilio, 2005. "On natural resource substitution," Resources Policy, Elsevier, vol. 30(4), pages 233-246, December.
    12. Stern, David I., 1995. "The contribution of the mining sector to sustainability in developing countries," Ecological Economics, Elsevier, vol. 13(1), pages 53-63, April.
    13. Mircea Saveanu, 2014. "Sustainability as a Resource Distribution Constraint," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(2), pages 139-151, April.
    14. Jeroen C.J.M. van den Bergh & Marjan W. Hofkes, 1997. "A Survey of Economic Modelling of Sustainable Development," Tinbergen Institute Discussion Papers 97-107/3, Tinbergen Institute.
    15. Edna Tusak Loehman, 2014. "Social Investment for Sustainability of Groundwater: A Revealed Preference Approach," Sustainability, MDPI, Open Access Journal, vol. 6(9), pages 1-41, August.
    16. Hediger, Werner, 2003. "Sustainable farm income in the presence of soil erosion: an agricultural Hartwick rule," Ecological Economics, Elsevier, vol. 45(2), pages 221-236, June.
    17. Adrian Boos, 2015. "Genuine Savings as an Indicator for “Weak” Sustainability: Critical Survey and Possible Ways forward in Practical Measuring," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-37, April.
    18. James A. Roumasset & Lee Endress, 1996. "The Yin and yang of Sustainable Development: A Case for Win-Win Environmentalism," Working Papers 199604, University of Hawaii at Manoa, Department of Economics.
    19. Emilio Cerdá & Francisco J. André, 2001. "Optimal Substitution Of Renewable And Nonrenewable Natural Resources In Production," Working Papers. Serie AD 2001-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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