Abstract
This article examines sustainability from a policy perspective rooted in environmental economics and environmental ethics. Endorsing the Brundtland Commission stance that each generation should have undiminished opportunity to meet its own needs, I emphasize the foundational status of the intergenerational commitment. The standard concepts of weak and strong sustainability, WS and SS, are sketched and critiqued simply and intuitively, along with the more recent concept of WS-plus. A recently proposed model of a society dependent on a renewable but vulnerable resource (Barfuss et al. 2018) is introduced as an expositional tool, as its authors intended, and used as a platform for thought experiments exploring the role of risk management tools in reducing the need for safety. Key conclusions include: (i) Safety, in this case, the elimination of risk in uncertain production systems, comes at an opportunity cost that is often non-trivial. (ii) Welfare shocks can be cushioned by savings and diversification, which are enhanced by scale. Scale increases with geographic area, diversity of production, organizational complexity, and openness to trade and human migration. (iii) Increasing scale enables enhancement of sustainable welfare via local and regional specialization, and the need for safety and its attendant opportunity costs is reduced. (iv) When generational welfare is stochastic, the intergenerational commitment should not be abandoned but may need to be adapted to uncertainty, e.g., by expecting less from hard-luck generations and correspondingly more from more fortunate ones. (v) Intergenerational commitments must be resolved in the context of intragenerational obligations to each other in the here and now, and compensation of those asked to make sacrifices for sustainability has both ethical and pragmatic virtue. (vi) Finally, the normative domains of sustainability and safety can be distinguished—sustainability always, but safety only when facing daunting threats.
Highlights
The Brundtland Commission concluded that sustainability would be achieved if each generation bequeathed to the an undiminished opportunity to meet its own needs [1], a stance foreshadowed by Solow [2]
My intention here is to introduce their model as an expositional tool, as its authors intended, and use it as a platform for thought experiments exploring the role of risk management tools in a reassessment of sustainability and safety paradigms
Observe that all of the variables in play—rl, rh, d, and p—influence E(PV(r)), which matters for optimality and sustainability, but the reward for safety is influenced only by rl
Summary
The Sustainability Commitment Is an Intergenerational Obligation. The Brundtland Commission concluded that sustainability would be achieved if each generation bequeathed to the an undiminished opportunity to meet its own needs [1], a stance foreshadowed by Solow [2]. Economists have interpreted needs in terms of welfare opportunities, which should be undiminished [3]. If this commitment is honored by each generation in its turn, the welfare of an unending sequence of generations will be sustained. A generation might be tempted to bequeath a little less in order to consume a little more, and the circumstance of its presence on this earth provides opportunity but not the moral authority to do so. The intergenerational commitment is a moral and ethical obligation
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