Advertisement

Environmental Management

, Volume 14, Issue 6, pp 771–778 | Cite as

Economic sustainability and the preservation of environmental assets

  • George Foy
Forum

Abstract

The core requirement of sustainability is that current economic activities should not result in an excessive burden on future generations. This criterion is general enough to imply different decision rules for the preservation of environmental assets. Neoclassical economics does not have a sustainability criterion for environmental assets independent of the intertemporal efficiency criterion, which allocates environmental and man-made capital based on projected monetary benefits and costs. This criterion is examined in terms of the feasibility of valuing the benefits of environmental assets, the substitution possibilities between natural and man-made capital, and the ethical grounds for using efficiency as the sole determinant of the allocation of environmental assets. An alternative ecological sustainability criterion is the preservation of safe minimum levels of environmental assets in physical terms rather than the dollar value of a composite of natural and man-made capital. Safe minimum standards for environmental assets constrain the efficiency criterion in order to ensure the sustainability of economic systems. It is argued that the ecological approach to sustainability should limit the economic approach for decisions involving the allocation of environmental assets.

Key words

Sustainability of economic systems Ecological assets Economic efficiency Safe minimum standard 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Literature Cited

  1. Arbuckle, J. G., G. W. Frick, R. M. Hall, Jr., M. L. Miller, T. F. P. Sullivan, and T. A. Vanderver, Jr. 1983. Environmental law handbook, 7th ed. Government Institutes, Inc., Rockville, Maryland.Google Scholar
  2. Barnett, H. J., and C. Morse. 1963. Scarcity and growth. John Hopkins Press, Baltimore.Google Scholar
  3. Bishop, R. C. 1978. Endangered species and uncertainty: the economics of a safe minimum standard.American Journal of Agricultural Economics 60:10–18.Google Scholar
  4. Bishop, R. C. 1979. Endangered species, irreversibilities, and uncertainty: a reply.American Journal of Agricultural Economics 61:376–379.Google Scholar
  5. Brown, B. J., M. E. Hanson, D. M. Liverman, R. W. Meredith, Jr. 1987. Global sustainability: toward definition.Environmental Management 11:713–719.CrossRefGoogle Scholar
  6. Brown, L. R. 1988. State of the world. W.W. Norton, New York.Google Scholar
  7. Brundtland Commission (World Commission on Environment and Development). 1987. Our common future. Oxford University Press, Oxford.Google Scholar
  8. Ciriacy-Wantrup, S. V. 1968. Resource conservation: economics and policies, 3rd ed. University of California Division of Agricultural Science, Berkeley and Los Angeles.Google Scholar
  9. Clark, C. W. 1976. Mathematical bioeconomics. John Wiley, New York.Google Scholar
  10. Costanza, R. and H. Daly. 1987. Toward an ecological economics.Ecological Modelling 38:1–7.CrossRefGoogle Scholar
  11. Cummings, R. G., D. S. Brookshire, and W. D. Schulze. 1986. Valuing environmental goods: an assessment of the contingent valuation method. Rowman and Allanheld, Totowa, New Jersey.Google Scholar
  12. Daly, H. E. 1984. Alternative strategies for integrating economics and ecology. Pages 19–29.In Integration of economy and ecology—an outlook for the eighties. A. M. Jansson (ed.), Wallenberg Foundation for International Cooperation in Science, Stockholm.Google Scholar
  13. Dana, S. T., and S. K. Fairfax. 1980. Forest and range policy, 2nd ed. McGraw-Hill, New York.Google Scholar
  14. Ehrlich, P. R. 1989. The limits to substitution: meta-resource depletion and a new economic-ecological paradigm.Ecological Economics 1:9–16.CrossRefGoogle Scholar
  15. Fisher, A. C. 1981. Resource and environmental economics. Cambridge University Press, Cambridge, UK.Google Scholar
  16. Fisher, A. C., and J. V. Krutilla. 1974. Valuing long run ecological consequences and irreversibilities.Journal of Environmental Economics and Management 1:96–108.CrossRefGoogle Scholar
  17. Fisher, A. C., and J. V. Krutilla. 1975. The economics of natural environments. John Hopkins University Press, Baltimore.Google Scholar
  18. Goodland, R., and G. Ledec. 1987. Neoclassical economics and principles of sustainable development.Ecological Modelling 38:19–46.CrossRefGoogle Scholar
  19. Hotelling, H. 1931. The economics of exhaustible resources.Journal of Political Economy 39:137–175.CrossRefGoogle Scholar
  20. Hueting, R. 1980. New scarcity and economic growth. North-Holland, Amsterdam.Google Scholar
  21. Hufschmidt, M., and E. Hyman. 1979. A survey of economic and related approaches to analysis of natural resource and environmental aspects of development. Tycooly International Publishing Limited, Dublin.Google Scholar
  22. IUCN (International Union for Conservation of Nature and Natural Resources). 1980. World conservation strategy: living resource conservation for sustainable development. IUCN, Morges, Switzerland.Google Scholar
  23. Kelman, S. 1981. Cost benefit analysis: an ethical critique.Regulation 5:33–40.Google Scholar
  24. Knight, F. 1921. Risk, uncertainty, and profit. Houghton Mifflin, Boston.Google Scholar
  25. Lee, J. A. 1985. The environment, public health, and human ecology. John Hopkins University Press, Baltimore.Google Scholar
  26. Loomis, J. B., and R. G. Walsh. 1986. Assessing wildlife and environmental values in cost—benefit analysis: state of the art.Journal of Environmental Management 22:125–131.Google Scholar
  27. Markandya, A., and D. Pearce. 1988. Environmental considerations and the choice of the discount rate in developing countries. World Bank Environment Department Working paper No. 3. Washington, D.C.Google Scholar
  28. Nordhaus, W., and J. Tobin. 1972. Is growth obsolete? Pages 1–24.In National Bureau of Economic Research, 50th Anniversary Colloquium, Vol 5, Economic Growth. National Bureau of Economic Research, New York.Google Scholar
  29. Page, T. 1977. Conservation and economic efficiency. John Hopkins University Press, Baltimore.Google Scholar
  30. Pearce, D. 1987. Foundations of an Ecological Economics. Ecological Modelling 38:9–18.CrossRefGoogle Scholar
  31. Pearce, D. 1988. Optimal prices for sustainable development. Pages 57–66.In D. Cóllard, D. Pearce, and D. Ulph (eds.), Economics, growth and sustainable environments. Essays in memory of Richard Lecomber. St. Martin's Press, New York.Google Scholar
  32. Rich, B. 1985. The multilateral development banks, environmental policy, and the United States.Ecology Law Quarterly 12:681–745.Google Scholar
  33. Sagoff, M. 1982. At the Shrine of Our Lady of Fatima, or why political questions are not all economic.Arizona Legal Review 23:221–234.Google Scholar
  34. Sagoff, M. 1988. Some problems with environmental economics.Environmental Ethics 10:55–74.Google Scholar
  35. Smith, V. K. 1980. The evaluation of natural resource adequacy: elusive quest or frontier of economic analysis?Land Economics 56:257–298.CrossRefGoogle Scholar
  36. Smith, V. K. 1983. Option value: a conceptual overview.Southern Economic Journal 49:654–668.CrossRefGoogle Scholar
  37. Smith, V. K., and J. V. Krutilla. 1979. Endangered species, irreversibilities, and uncertainty: a comment. American Journal of Agricultural Economics 61:371–375.Google Scholar
  38. Soderbaum, P. 1986. Economics, ethics and environmental problems.The Journal of Interdisciplinary Economics 1:139–154.Google Scholar
  39. Solow, R. 1974. Intergenerational equity and exhaustible resources.Review of Economic Studies Symposium 41:29–46.Google Scholar
  40. Stiglitz, J. E. 1979. A neoclassical analysis of the economics of natural resources. Pages 36–66.In V. Kerry Smith (ed.), Scarcity and growth reconsidered. The John Hopkins University Press, Baltimore.Google Scholar
  41. Tisdell, C. 1988. Sustainable development: differing perspectives of ecologists and economists, and relevance to LDCs.World Development 16:373–384.CrossRefGoogle Scholar
  42. USDA. 1982. Soil Conservation Service in cooperation with Arkansas Soil and Water Conservation Commission. Natural resources inventory. Little Rock, Arkansas.Google Scholar
  43. USDA. 1990. Forest Service, Ouachita National Forest. Land and Resource Management Plan. Hot Springs, Arkansas.Google Scholar
  44. WRI (World Resources Institute and International Institute for Environment and Development). 1987. World Resources 1987. Basic Books, New York.Google Scholar

Copyright information

© Springer-Verlag New York Inc. 1990

Authors and Affiliations

  • George Foy
    • 1
  1. 1.Department of Economics and FinanceUniversity of Central ArkansasConwayUSA

Personalised recommendations