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Environmental management problems, future generations and social decisions

Author

Listed:
  • Joan Pasqual

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • Emilio Padilla

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

Abstract

The decisions of many individuals and social groups, taking according to well-defined objectives, are causing serious social and environmental problems, in spite of following the dictates of economic rationality. There are many examples of serious problems for which there are not yet appropriate solutions, such as management of scarce natural resources including aquifer water or the distribution of space among incompatible uses. In order to solve these problems, the paper first characterizes the resources and goods involved from an economic perspective. Then, for each case, the paper notes that there is a serious divergence between individual and collective interests and, where possible, it designs the procedure for solving the conflict of interests. With this procedure, the real opportunities for the application of economic theory are shown, and especially the theory on collective goods and externalities. The limitations of conventional economic analysis are shown and the opportunity to correct the shortfalls is examined. Many environmental problems, such as climate change, have an impact on different generations that do not participate in present decisions. The paper shows that for these cases, the solutions suggested by economic theory are not valid. Furthermore, conventional methods of economic valuation (which usually help decision-makers) are unable to account for the existence of different generations and tend to obviate long-term impacts. The paper analyzes how economic valuation methods could account for the costs and benefits enjoyed by present and future generations. The paper studies an appropriate consideration of preferences for future consumption and the incorporation of sustainability as a requirement in social decisions, which implies not only more efficiency but also a fairer distribution between generations than the one implied by conventional economic analysis.

Suggested Citation

  • Joan Pasqual & Emilio Padilla, 2005. "Environmental management problems, future generations and social decisions," Working Papers wpdea0502, Department of Applied Economics at Universitat Autonoma of Barcelona.
    • Handle: RePEc:uab:wprdea:wpdea0502
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    References listed on IDEAS

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    Cited by:

    1. Joan Pasqual Rocabert, 2005. "Nuevos instrumentos de política ambiental," Working Papers wpdea0510, Department of Applied Economics at Universitat Autonoma of Barcelona.

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    More about this item

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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