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An environmental-economic measure of sustainable development

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  • Cairns, Robert D.
  • Martinet, Vincent

Abstract

A central issue in the study of sustainable development is the interplay of growth and sacrifice in a dynamic economy. This paper investigates the relationship among current consumption, sacrifice and sustainability improvement in a general context and in two canonical, stylized economies. We argue that the maximin value of utility measures what is sustainable and provides the limit to growth. Maximin value is interpreted as a dynamic environmental-economic carrying capacity and current utility as an environmental-economic footprint. The time derivative of maximin value is interpreted as net investment in sustainability improvement. It is called durable savings to distinguish it from genuine savings, usually computed with discounted-utilitarian prices.

Suggested Citation

  • Cairns, Robert D. & Martinet, Vincent, 2014. "An environmental-economic measure of sustainable development," European Economic Review, Elsevier, vol. 69(C), pages 4-17.
    • Handle: RePEc:eee:eecrev:v:69:y:2014:i:c:p:4-17
    DOI: 10.1016/j.euroecorev.2014.03.001
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    Cited by:

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    2. Cairns, Robert D. & Martinet, Vincent, 2021. "Growth and long-run sustainability," Environment and Development Economics, Cambridge University Press, vol. 26(4), pages 381-402, August.
    3. John M. Hartwick & Ngo Van Long, 2020. "Sustainability with endogenous discounting," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(2), pages 216-221, June.
    4. Olga Gorbaneva & Guennady Ougolnitsky, 2022. "Sustainability of Intertwined Supply Networks: A Game-Theoretic Approach," Games, MDPI, vol. 13(3), pages 1-21, April.
    5. Jian Wu & Guangdong Wu & Qing Zhou & Mi Li, 2014. "Spatial Variation of Regional Sustainable Development and its Relationship to the Allocation of Science and Technology Resources," Sustainability, MDPI, vol. 6(9), pages 1-18, September.
    6. Lucas Bretschger, 2018. "Greening Economy, Graying Society," CER-ETH Press, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich, edition 2, number 18-001.
    7. Nana Yang & Jiansong Li & Binbin Lu & Minghai Luo & Linze Li, 2019. "Exploring the Spatial Pattern and Influencing Factors of Land Carrying Capacity in Wuhan," Sustainability, MDPI, vol. 11(10), pages 1-16, May.
    8. Anetta Barska & Janina Jędrzejczak-Gas & Joanna Wyrwa & Krzysztof Kononowicz, 2020. "Multidimensional Assessment of the Social Development of EU Countries in the Context of Implementing the Concept of Sustainable Development," Sustainability, MDPI, vol. 12(18), pages 1-24, September.
    9. Martinet, Vincent & Del Campo, Stellio & Cairns, Robert D., 2022. "Intragenerational inequality aversion and intergenerational equity," European Economic Review, Elsevier, vol. 144(C).
    10. Van Long, Ngo, 2016. "The Impacts of Other-Regarding Preferences and Ethical Choice on Environmental Outcomes: A Review of the Literature," Strategic Behavior and the Environment, now publishers, vol. 6(1-2), pages 1-35, December.
    11. Diana Mihaela Pociovălișteanu & Isabel Novo-Corti & Mirela Ionela Aceleanu & Andreea Claudia Șerban & Eugenia Grecu, 2015. "Employment Policies for a Green Economy at the European Union Level," Sustainability, MDPI, vol. 7(7), pages 1-20, July.
    12. Patenema Ouedraogo, 2022. "The Impact Of Public Debt On The Sustainability Of The Economy," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 16(1), pages 334-350.
    13. Gerlagh, Reyer, 2017. "Generous Sustainability," Ecological Economics, Elsevier, vol. 136(C), pages 94-100.
    14. Roman, Philippe & Thiry, Géraldine, 2016. "The inclusive wealth index. A critical appraisal," Ecological Economics, Elsevier, vol. 124(C), pages 185-192.
    15. Guennady Ougolnitsky & Anatoly Usov, 2023. "Differential Game-Theoretic Models of Cournot Oligopoly with Consideration of the Green Effect," Games, MDPI, vol. 14(1), pages 1-18, January.
    16. Gennady Ougolnitsky & Olga Gorbaneva, 2022. "Sustainable Management in Active Networks," Mathematics, MDPI, vol. 10(16), pages 1-22, August.
    17. Cairns, Robert D., 2018. "Economic Accounting in the Simple Hotelling Model," Resource and Energy Economics, Elsevier, vol. 51(C), pages 18-27.
    18. Hartwick, John M. & Long, Ngo Van, 2018. "Sustainability with endogenous discounting when utility depends on consumption and amenities," Mathematical Social Sciences, Elsevier, vol. 95(C), pages 31-36.
    19. Antony, Jürgen & Klarl, Torben, 2022. "Poverty and sustainable development around the world during transition periods," Energy Economics, Elsevier, vol. 110(C).
    20. Fleurbaey, Marc, 2015. "On sustainability and social welfare," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 34-53.
    21. Siddharth Shankar Rai & Shivam Rai & Nitin Kumar Singh, 2021. "Organizational resilience and social-economic sustainability: COVID-19 perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 12006-12023, August.

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    More about this item

    Keywords

    Sustainable development; Maximin; Sustainability indicator;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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