Abstract
AbstractEqual treatment for the present and the future was required in two axioms introduced in the articles by Chichilnisky of the years 1996 and 1997. These articles provide a characterization of the decision criterion that satisfies the axioms and shows that the two axioms are equivalent to physical limits in the long-run future. The author proves that maximizing discounted utility with a long-run survival constraint is equivalent to maximizing a criterion that treats equally the present and the future. The equal treatment axioms are therefore the essence of sustainable development. The “weight”λgiven to the long-run future is here identified with the marginal utility of the environmental asset along a path that narrowly misses extinction. An existence theorem is also provided for optimizing according to the welfare criterion that treats equally the present and the future. The author shows that no prior welfare criteria satisfy the axioms for sustainable development introduced in her article of the year 1996.
Highlights
Global warming and the plight of extinguishing species are attracting increasing public attention, and leading to calls for new forms of economic development
The need for development that satis...es the basic needs of present and future generations was introduced 30 years ago1 (Chichilnisky 1977a, 1977b; Herrera et al 1976), it was developed by the ILO and the World Bank in country studies, and rea¢ rmed by international vote as a global development priority 17 years ago2 (Brundtland 1987
What this article shows is that once we become aware of new long term physical constraint on resources, such as the possible extinction of a species, this invokes new behavioral axioms introduced in Chichilnisky (1996) requiring equal treatment of the present and the future— and we behave according to the decision criterion they imply
Summary
Global warming and the plight of extinguishing species are attracting increasing public attention, and leading to calls for new forms of economic development. What this article shows is that once we become aware of new long term physical constraint on resources, such as the possible extinction of a species, this invokes new behavioral axioms introduced in Chichilnisky (1996) requiring equal treatment of the present and the future— and we behave according to the decision criterion they imply. Implementing sustainable development is a moving target that requires more than public attention and a change in values and preferences. The crux of the matter is how, through markets, we can de...ne economic values that go beyond immediate individual gain and encompass the needs of future generations.5 This motivation led the author to propose in 1993 two. This article shows that this awareness leads us to behave according to the new equal treatment axioms (Chichilnisky 1996) and the decision criterion that they imply
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