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Sustainability is compatible with decreasing social welfare

Author

Listed:
  • Tanguy Isaac

    (Université catholique de Louvain)

Abstract

This note studies the determination of optimal path - i.e. maximizing the intertemporal social welfare - under a sustainability constraint defined as a non-decreasing intertemporal social welfare accross time. We show that this definition suffers from an important drawback : the path obtained is not Pareto optimal. It is a drawback because nothing in our intuition of sustainable allocation justifies to give up a Pareto improvement. This implies also the possibility of false-negative result in the empirical studies aiming to determine if a country is on a sustainable path.

Suggested Citation

  • Tanguy Isaac, 2013. "Sustainability is compatible with decreasing social welfare," Economics Bulletin, AccessEcon, vol. 33(2), pages 1116-1125.
    • Handle: RePEc:ebl:ecbull:eb-12-00803
    as

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    References listed on IDEAS

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    1. Stavins, Robert N. & Wagner, Alexander F. & Wagner, Gernot, 2003. "Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity," Economics Letters, Elsevier, vol. 79(3), pages 339-343, June.
    2. Kenneth Arrow & Partha Dasgupta & Lawrence Goulder & Gretchen Daily & Paul Ehrlich & Geoffrey Heal & Simon Levin & Karl-Göran Mäler & Stephen Schneider & David Starrett & Brian Walker, 2004. "Are We Consuming Too Much?," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 147-172, Summer.
    3. Geir B. Asheim, 2003. "Green national accounting for welfare and sustainability:A Taxonomy Of Assumptions And Results," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 113-130, May.
    4. Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
    5. BONNEUIL, Noël & BOUCEKKINE, Raouf, 2009. "Sustainability, optimality, and viability in the Ramsey model," LIDAM Discussion Papers CORE 2009074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    sustainability; optimal path; Brundtland criterion;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics

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