Some environmental concerns are well addressed in the paradigm described above. The general investment logic is as follows. Governments use evidence-informed methods to decide to tax away some resources from today’s consumption in order to invest in, say, subsidized childcare or public housing. Such investments can be worthwhile on the basis of building better lives in the future in exchange for a small wellbeing cost today. The life satisfaction approach in principle allows for all the diverse costs and benefits to be added up and compared in a sensible way, informing a choice about the “right” amount to spend.
Such spending will naturally include many environmental investments. There is already a large set of studies within the subjective wellbeing literature that quantifies the impact of environmental goods on life satisfaction (Maddison et al. 2020). Therefore, many environmental exposure variables will naturally end up in the DoHC, and our understanding of how policy can affect those exposures in the future will inform certain environmental policies. For instance, exposure to noise, pollution, and green space appear to have an immediate, quantifiable, and sustained effect on life satisfaction (e.g., van Praag and Baarsma 2005; Levinson 2018; Ambrey and Fleming 2014). Reduction of exposure to lead, or ensuring the viability of a fishery, may be predicted to affect other life conditions, listed in the DoHC, over a generation. Thus, cumulative policy impacts on life satisfaction may be estimated based on those life conditions.
When the calculus fails
However, some future outcomes are too complex to predict well. How might gradual topsoil erosion, land use change, groundwater depletion, or fossil fuel extraction be incorporated into a government decision-making framework? One untenable option is as follows. Abiding by some variant of the Brundtland et al. (1987) definition of sustainability, or by the logic of “weak sustainability” articulated by Solow (1991), we would ensure that, overall, the wellbeing of those in the future is at least as high as our own. We would project how current policy options would affect objective outcomes in the future, coupled with a DoHC to calculate the corresponding impacts on overall life quality. The goal would be to calculate the optimal level and kinds of consumption to maximize current well-being while ensuring that, taking into account the numerous other gifts we bequeath to our descendants, future generations would still have good lives overall.
That plan is a mirage. For long-run, unfamiliar, unpredictable, complex, and uncertain dynamics, these calculations are not feasible. In those cases, it is not possible to choose an optimum based on accumulated knowledge about returns to investment (‘Investments over the life course’) and the DoHC, because no consensus on sufficiently precise predictions will be possible. Thus, the wellbeing approach fails in these cases and, one might say, the domain of “sustainability” considerations begins.Footnote 2 The rest of this section explains how using material constraints on human activities can address these sustainability considerations, without compromising the technical feasibility and conceptual clarity of a wellbeing approach for most policies.
While the approach oriented around quality of life and epitomized by the DoHC is in principle highly rationalized, preservation of complex systems—especially natural ones—need not be justified in terms of calculable impacts on human well-being.
For instance, reflecting on the contribution of academic economics to the question of how to manage greenhouse gases, it seems that two decades were squandered theorizing about the right discount rate and preference parameters which, if known, would point to a particular optimal combination of mitigating climate change versus adapting to it. Instead, had society been equipped already with norms and institutions for an alternative, precautionary approach, we could more easily have recognized that the optimal abatement question could not be precisely settled based on quantitative arguments about wellbeing.
An approach to long-run risk
How, then, are we to incorporate a concern for long-run risk or conservation into a framework which privileges human wellbeing?
Above all, the answer is to be willing to separate them (Neumayer 1999; Stiglitz et al. 2009). There needs to be a second rationale, besides accountability to predicted changes in human wellbeing, that society accepts to justify limits. A sensible approach is to address long-run problems through physical constraints, rather than optimization of wellbeing, when these problems are too complex or risky to treat through a system of prediction and quantitative balancing of human outcomes.
For example, in the case of greenhouse gases, a plan to stop the expansion of emissions could have been put in place in the late 20th century while further studies sought better precision on the future risks.Footnote 3 More generally, our extraction of material resources from the earth and our addition of material pollutants to natural reservoirs could be subject to controls, sometimes in the form of explicit limits, justified not by calculable future well-being but by a principle of conservation, or an aversion to rapid change in natural or complex systems.
The approach can be applied to governments at all levels with enforcement authority: a city may decide to limit the growth of its footprint; a regional government in charge of mining may put an annual quota on both extraction rates and surface damage; and a national government may limit use of each ocean resource. In each case, a quota could be designed at first to halt further expansion of the rate of material extraction or effluent release, in ignorance of an “optimal” rate. The quota may subsequently be decreased, year over year, or otherwise adjusted based on arguments about the stability of the resource, as ecological evidence is available.
Key features of a system of sustainability constraints are that (1) the constraints are related directly or indirectly to objective physical measures, not to human benefits or wellbeing, and (2) that the physical measures are particular to each resource or waste stream, rather than being aggregated into an overall measure of environmental status or damage.Footnote 4
For the purposes of making a distinction between wellbeing-driven policies and those justified by conservation considerations, there is no need to proceed into the details of how physical limits are implemented. The feasibility of building a democratic consensus for a particular level of emissions or rate of emissions cuts, the feasibility of solving collective action problems across multiple governments, and the problem of mechanism design for implementing controls, all lie beyond the scope of this paper. The focus is instead on protecting a life satisfaction approach from being burdened by non-commensurable objectives that it cannot accommodate. It is for this reason that society must have a complementary principle by which to manage certain long-run risks. That principle relates to controlling change, especially in natural resources and systems, when future implications of current consumption are unclear.
Without a set of principles and practices for dealing with sustainability issues, the policy reorientation towards wellbeing, described in prior sections, would be impracticable. That is, any realignment of policy away from an implicit production-growth bias, towards something more accountable to human experience, will run into trouble if it does not recognize that this accountability has finite practical scope. The life satisfaction framework may be enormously integrative in comparison to preexisting approaches, but there must be a social expectation that some regulations will be justified on a different, precautionary basis.
The justification behind a physical limits framework is ultimately to slow the pace of change of natural support systems in the face of uncertainty. For questions that are in this sense sustainability issues, it is universally the case that the true social cost of an activity is unknown, or the natural dynamics are too fragile or complex to predict well, or the social dynamics are subtle or complex. In these cases, an important starting point is to control the pace of material effects on those systems.Footnote 5
As mentioned above, this begs the question of how to implement such conservation-minded constraints. In the greenhouse gas case, for example, carbon neutrality has become a principled goal for firms, regions, and nations. Early action could have been to institute a steadily and predictably rising price of emissions, without initial knowledge of how high it should end up. A price instrument can adjust over time to meet a more quantity-based decarbonization rule, with the principle remaining one of sustainability rather than optimization of wellbeing. An established instance of that principle is again carbon neutrality, which does not relate to any particular level of human wellbeing; in this sense it is arbitrary. Acceptance of conservation constraints, and tolerance of uncertainty about the long-run costs to wellbeing, are key to this policy framing.
Within the space defined by such constraints, policy can continue to focus on maximizing human wellbeing using the life satisfaction approach. Thus, a system of constraints protects the depletion of natural stocks of many kinds, but within those constraints society is generally directed to improve human experience according to the best available knowledge.
Figure 2 depicts the combined institutions. The measurement and inferential processes which monitor the population and generate the DoHC are shown on the left. The green box represents sustainability constraints to policy, i.e., those necessitated by ignorance of certain long-run costs, and the “Systems Knowledge” oval represents the content of ‘Investments over the life course’, that is, the translation of prospective policies today into objective outcomes in the future. The DoHC in turn translates these into a population distribution of expected human experience, upon which preferences among policies can be based.
To reiterate the nature of the present proposal, let me point out that there is no description in this diagram of how to choose the stringency of conservation, such as the rate of convergence to zero for non-renewable extraction or pollution flows. The enormous literature on this subject remains relevant in the context of the green box in Fig. 2, and is not addressed here. Instead, my point is that there is a practical fallacy in casting all conservation considerations as components of wellbeing. This mistake can be avoided if public discourse admits a second principle for policy, using a conservation or precautionary rationale to justify the stabilization of ecological (or other) systems.
Three possible critiques
A false dichotomy between wellbeing and sustainability?
Like most dichotomies, this one is not rigid. Governments already impose limits in the name of conservation, without embracing the dichotomy proposed here between wellbeing and sustainability. Material limits are most likely to be considered and introduced when there is a perceived risk to future human wellbeing. Later, when relevant natural and social science becomes sufficiently well understood that a calculus of future wellbeing can be applied, the material limit designed for ecological sustainability may be replaced by one fine-tuned for long-run wellbeing.
Conversely, every prospective policy comes with some risk, i.e., an imperfect prediction of its future consequences to human wellbeing. Predictions are, technically speaking, distributions of probabilities over different possible outcomes. For instance, a government model of human life course development may recognize some uncertainty in life expectancy of current generations and in future immigration flows; these possibilities will be reflected in a range of expected policy outcomes expressed in terms of wellbeing.
In part for this reason, there will always remain room for democratic will and political preference in policy, even in an environment where the population expects justification in terms of, and accountability to, a quality of life measure. The difference between this uncertainty in future wellbeing and that which motivates a physically denominated limit to conserve some resource is in principle only a matter of degree; however practically speaking two separate rationale—human wellbeing and principled conservation—are easier to understand and, I suggest, to institutionalize.
The dichotomy also has some internal coherence. Stabilizing natural systems and shifting to a reliance on sustainable resources may help to reduce uncertainty about the structure of life in future decades, thereby facilitating the kind of projections needed for a wellbeing approach to other policies. Conversely, focusing on an optimistic, quality-of-life-oriented discourse within the context of some material constraints should make the principled imposition of those constraints more palatable for all involved.
Lastly, in some contexts, a commitment to conservation principles is likely to buttress social cohesion and identity, and in turn life satisfaction. Indeed, an important support for life satisfaction is the degree to which people feel a connection to a meaningful social identity and a sense of cultural continuity (Chandler and Lalonde 1998). Another is the opportunity to act in support of others, which is a powerful promoter of individual wellbeing (Aknin et al. 2013). While the cultural benefits of embracing a principled conservation policy may be as difficult to calculate as the anthropocentric environmental benefits, they may be considerable. One might speculate that the promise of separating policy rationale about individual and collective happiness from stories about conservation may open the door to more narrative approaches, maybe akin to those which Indigenous peoples have used for millennia, for explaining the imposition of resource limiting rules. That is, allowing conservation constraints to be portrayed as part of a people’s identity rather than subject to arguments about wellbeing may have some immediate benefits for people’s wellbeing.
Unbounded costs to conservation?
Another possible critique of my argument is that the costs to wellbeing of an unnecessary or overly conservative constraint may be just as high as the potential damage of not imposing controls. There are two important premises which may make the physical limits approach compelling in the face of this concern.
The first relevant premise is one of the major insights from life satisfaction research. It is that the scope for improving, or indeed diminishing, life experience through non-material changes to society is enormous, while the scope for changing lives through material means is relatively limited (Barrington-Leigh 2016b). This may be counter-intuitive in the context of developing economies; nevertheless, the evidence spans all levels of development. Projections based on past development suggest that changes in GDP per capita and healthy life expectancy between now and 2050 are unlikely to change world average life satisfaction by even 1 point on the 11-point scale ( Barrington-Leigh and Galbraith 2019). By contrast, different feasible trajectories of a few non-material variables by 2050 account for a variation of nearly 3.5 points on the same scale, with the optimistic end leaving the average country as happy as today’s Belgium and Costa Rica. One interpretation is that the scope for improving lives may be surprisingly undiminished under the imposition of some material constraints.
The second proposition in defense of precautionary constraints is that on moderate time scales, innovation partly compensates for supply limitations. When material constraints are transparent and predictable, markets respond appropriately through innovation and substitution. The idea that such constraints can spur innovation so strongly as to be beneficial even in the short term (Porter and Van der Linde 1995) has support in a variety of contexts, although it will not apply universally. Nevertheless, the innovation bred by transparent constraints on a given material flow will always increase efficiency in the use or production of the constrained material, and will always mitigate the reduction in consumption benefit that would otherwise be experienced. We can be certain, for instance, that had oil become expensive 100 years ago, wind and solar power technology and electric transportation infrastructure would have advanced much earlier than it has. Policy should therefore focus on optimizing human wellbeing within a set of ecologically motivated constraints, rather than giving undue focus to opportunity lost to those constraints.
Sustainability problems not solved?
Another possible objection to the proposal of this section is the opposite of the previous one. It is that constraining resource extraction or pollution does not necessarily entail constraining it sufficiently. While true, this critique is more relevant to specific approaches to instituting consumption constraints, rather than to the general idea of imposing them.
Different environmental control instruments are appropriate in different situations. In instituting such protections, there are plenty of problems to do with free-riding across jurisdictions, intermingled with those to do with public will. However, these are likely either ameliorated or unaffected by implementing the ideas in this paper, which emphasizes separating a physical or ecological rationale for policy from one based on the science of wellbeing. If a public accepts a wellbeing-subject-to-limits approach, and if the institutions to enforce limits are in place, then updating limits in light of new ecological science, for instance, may be easier than debating the social costs and benefits of running down a natural stock.
Precedents for physical limits
Fortunately, as with the institutions described in earlier sections, the institutions for limiting physical throughput are not entirely novel either in concept or in practice.
A number of resources are now capped at non-zero values. For instance, water extraction quantities, SO\(_{2}\) emissions, fishery catches, forestry cut volumes, urban development perimeters, and CO\(_{2}\) emissions are examples of material flows subject to caps, often allocated by auctions of tradeable quotas, or other material controls.
The idea has been around for even longer, but the proposal for widespread use of quotas to limit many principal material flows is due to Daly (1973). He recommended that quotas converge toward levels that abide by certain principles of sustainability for renewable and non-renewable resources (Daly 1990). In some cases these are practicable; in others, however, those levels suffer from uncertainty in natural or social sciences, just like insufficiently informed future wellbeing calculations. In both contexts, science will inform better targets over time.
Pigouvian taxes, i.e., taxes on environmental externalities, also have a long pedigree. In many situations the optimal instrument provides price certainty in the short run but is adjusted to meet physical constraint objectives in the long run. An example is the Western Climate Initiative’s carbon pricing approach for Quebec and California.Footnote 6 In any case, the key relevant feature in a wellbeing policy framework is that there is an expectation that principled conservation criteria, not social costs, may be used as justification for limits.
In practice, international competition and political pressures will limit how stringent governments are willing to be in imposing controls. Nevertheless, expanding institutions and social acceptance for self-imposed limits expressed in physical and ecological terms, rather than those justified by projected human benefits, is an important complement to wellbeing-based policy making.