Sustainability in Theory

Posted on March 1, 2011 by

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clip_image002What is sustainable development? It’s talked about a lot isn’t it? Well, though the concept is famously a little fuzzy, and tends to be bent (especially by politicians and businesspeople) to suit people’s ends, it does have relatively firm theoretical underpinnings in economic and philosophical theory. Most readers here are probably all sick to the back teeth of the theory of sustainable development, having studied it for a year. However, for those who haven’t, here’s a very brief introduction to some of the key theoretical aspects.

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Figure 1. The three pillars of sustainability as connected in a Venn diagram by Barbier (top), and a more modern conception with the environment bounding the other pillars (bottom).

Development has been traditionally measured, at least by politicians, financially via Gross Domestic Product (GDP) (Hecht, 2010, El Serafy, 1995), with policies and resource usage maximizing GDP thus favoured. GDP has been increasingly questioned as a welfare measure as it fails to correlate to happiness (Easterlin, 1973, Easterlin et al., 2010), ignores inequality of distribution within the

present generation and between generations, and fails to take account of benefits from the natural environment and unmonetarized sectors (Osberg and Sharpe, 2002, Soubottina, 2004). Composite indices such as the United Nations Development Programme (UNDP)’s Human Development Index (HDI) (Noorbakhsh, 1998) have thus been developed, but even this fails to take into account environmental quality and the sustainability of welfare improvements. Sustainable development (SD) is defined as a development meeting the needs of the present without compromising the ability of future generations to meet their needs (United Nations World Commission on Environment and Development, UN WCED, 1987). SD aims to reconcile justly distributed and long-term economic welfare with maintenance if not growth of unpriced welfare deriving from the social and natural environments (Soubottina, 2004).

In SD theory value is often broken down into three capital stocks (pillars): natural/the environment, social/society and economic/the economy. The sum of these capitals must be maintained for sustainability to be achieved, but opinions differ on whether these capitals can be interchanged or if natural capital should not be reduced (Daly, 1973). Can trees be replaced by pretend trees? The pillars were interconnected in a Venn diagram (Barbier 1987) (Fig.1, top), with more recent conceptions placing the environment surrounding society, and society the economy, emphasizing reliance of the latter on the former in each case (Lozano, 2008) (Fig.1, bottom). The idea with this is recognizing the importance of environmental and social stability for economic growth. Dividing things into the different types of capitals is rather tricky though, and isn’t perhaps the most rigorous way to assess SD.

Potentially more satisfyingly solid principles of “spatial” (intragenerational) and “temporal” (intergenerational) distributive justice, and their economic
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Figure 2. Kant (left) and Rawls (right).

counterparts, also underpin SD. Rawlsian justice holds gains in welfare by members of society at the expense of poorer members to be wrong (Rawls, 1971), based on Kant’s social contract. SD extends this concept to intergenerational (as opposed to intragenerational) justice. Intragenerational inequalities are also a concern for intergenerational justice as in the long term they may cause environmental degradation and social collapse, affecting even those in prosperous groups (Lemons and Brown, 1995). These ethical conceptions can be described economically. A standard economic welfare function corresponds to the additive income of all members of society, where W is social welfare and Yi the welfare of individual i among n individuals in the society:

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A max-min welfare value function however corresponds to Rawlsian justice, with increased welfare to society only gained by increasing the welfare of its poorest member:

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Similarly, Sen (1973) relates welfare inversely to income inequality (the Gini coefficient), with welfare being proportional to the mean per capita income of a society multiplied by its Gini coefficient (G) subtracted from 1:

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This means that the higher the income inequality, the lower the benefits of increased income to society. Not only is use of resources which reduces the resource’s value, or that of other resources, thus unsustainable. So too are welfare increases from resource use unless allotted to the poorest generation or present individuals or equally across society if all have equal initial welfare, if such allocation is physically possible. An unrestrained free market tends not to allocate in this manner unfortunately. Thus SD is often the domain of the left, who didn’t think the market was all that great anyway. However, often the social aspects of SD are ignored, with focus on maintenance of environmental quality and natural capitals. This is possible to have without social equity, and thus the right wing can profess to be sustainable here, and also economically in that they (at least say that they) tend not to build up debt quite as much, which would impact negatively in the future.

…Well! Told you it would be brief, but hope that helps. If any bits aren’t clear, please comment.

References

Barbier, E.,1987. The Concept of Sustainable Economic Development. Environmental Conservation, 14, 101-110

Daly, H. (1973) Steady State Economics. San Francisco, California: W.H. Freeman

Easterlin, R.A. (1973) Does money buy happiness? Public Interest 30, 3–10

Easterlin, R.A., Angelescu McVey, L., Switek, M., Swangfa, O., Zweig Smith, J. (2010) The happiness-income paradox revisited. Proceedings of the National Academy of Sciences of the United States of America 107, 22463-22468

El Serafy, S. (1995) Depletion of natural resources. In: W. van Dieren (Editor), Taking Nature into Account: Towards a Sustainable National Income–A Report to the Club of Rome. Copernicus Verlag, New York.

Hecht, J. (2010) Book Reviews: The Road to Sustainability: GDP and Future Generations. Ecological Economics 69, 2645

Lemons, J. And Brown, D.A. eds. (1995) Sustainable Development: Science, Ethics and Public Policy. Dordrecht: Kluwer.

Lozano, R. (2008) Envisioning sustainability three-dimensionally. Journal of Cleaner Production 16, 1838-1846

Noorbakhsh, F. (1998) A Modified Human Development Index. World Development 26, 517-528

Osberg, L. and Sharpe, A. (2002) An index of economic well-being for selected OECD countries. Review of Income and Wealth 3, 291-326

Rawls, J. (1971) A Theory of Justice. Cambridge, Massachusetts: Belknap Press of Harvard University Press

Soubottina, T.P. (2000) Beyond Economic Growth: An Introduction to Sustainable Development. World Bank, Washington D.C.

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