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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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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I2-P105.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Noël Bonneuil & Raouf Boucekkine, 2009. "Sustainability, optimality, and viability in the Ramsey model," Working Papers 2009_34, Business School - Economics, University of Glasgow.
    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. 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.
    5. Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
    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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