Abstract
In this paper, I formalize the idea of sustainable development in terms of intergenerational well-being. I then sketch an argument that has recently been put forward formally to demonstrate that intergenerational well-being increases over time if and only if a comprehensive measure of wealth per capita increases. The measure of wealth includes not only manufactured capital, knowledge and human capital (education and health), but also natural capital (e.g. ecosystems). I show that a country's comprehensive wealth per capita can decline even while gross domestic product (GDP) per capita increases and the UN Human Development Index records an improvement. I then use some rough and ready data from the world's poorest countries and regions to show that during the period 1970–2000 wealth per capita declined in South Asia and sub-Saharan Africa, even though the Human Development Index (HDI) showed an improvement everywhere and GDP per capita increased in all places (except in sub-Saharan Africa, where there was a slight decline). I conclude that, as none of the development indicators currently in use is able to reveal whether development has been, or is expected to be, sustainable, national statistical offices and international organizations should now routinely estimate the (comprehensive) wealth of nations.
Highlights
QUESTIONS AND RESPONSESAre humanity’s dealings with nature sustainable? Can we expect world economic growth to continue in the foreseeable future? Should we be confident that knowledge and skills will increase in such ways as to lessen our reliance on nature in relation to humanity’s growing numbers and rising economic activity?
In this paper, I formalize the idea of sustainable development in terms of intergenerational wellbeing
If we look at specific examples of what economists call natural capital, there is convincing evidence that at the rates at which we currently exploit them they are very likely to change character dramatically for the worse, with little advance notice
Summary
Are humanity’s dealings with nature sustainable? Can we expect world economic growth to continue in the foreseeable future? Should we be confident that knowledge and skills will increase in such ways as to lessen our reliance on nature in relation to humanity’s growing numbers and rising economic activity?. When experts disagree over such a fundamental matter as the direction of causation, there is little to go on Those conflicting intuitions are not unrelated to an intellectual tension between the concerns people share about carbon emissions and acid rains that sweep across regions, nations and continents and about declines in the availability of firewood, fresh water, coastal resources and forest products in as small a locality as a village in a poor country. Dasgupta 1993, 2001; Sachs 2008) In this reckoning, environmental pollutants are the reverse of natural resources. (I am excluding oil and natural gas, which are at the limiting end of self-regenerative resources.) To assume away the physical depreciation of capital assets is to draw a wrong picture of future production and consumption possibilities that are open to a society. In their work on the depreciation of natural resources in Costa Rica, Solorzano et al (1991) found that the depreciation of three resources (forests, soil and fisheries) amounted to about 10 per cent of GDP and over one-third of domestic saving
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