Sustainability : ethical foundations and economic properties
The author interprets development to be sustainable if it involves a nondecreasing quality of life. He introduces a concept of justice, and shows that a development path must be sustainable to prevent injustice. He argues, and illustrates through growth models, that altruism alone does not - even in the context of an economically efficient market economy - ensure sustainability. In particular, technologies with complementarity between manmade and natural capital represent cases where sustainability need not result. Thus, policies aimed at economic efficiency, such as internalizing external effects, need not generate sustainable development. The author argues that a positive interest rate is not inconsistent with sustainable development. He also maintains that, even in a perfect market economy, prices may not convey whether investments in manmade capital are sufficient to compensate for the depletion of natural capital. In particular, a non-negative market value of net investment is not sufficient for the present quality of life to be sustainable. Finally, he emphasizes that public policy aimed at sustainable development should strengthen the mechanisms for redistribution from the present to the future.
|Date of creation:||31 May 1994|
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