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TOPIC 2 CONTINUED… AN INTRODUCTION TO SUSTAINABILITY

TOPIC 2 CONTINUED… AN INTRODUCTION TO SUSTAINABILITY. Defining Sustainable Development: Early Efforts. Pezzey (1989) analysed different development paths: (a) sustainable (C ≤ C MAX ) (b) sustained (change in C over time ≤ 0) (c) survivable (C > C SURV ) . (a). (b). Consumption (C).

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TOPIC 2 CONTINUED… AN INTRODUCTION TO SUSTAINABILITY

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  1. TOPIC 2 CONTINUED…AN INTRODUCTION TO SUSTAINABILITY

  2. Defining Sustainable Development: Early Efforts • Pezzey (1989) analysed different development paths: (a) sustainable (C ≤ CMAX) (b) sustained (change in C over time ≤ 0) (c) survivable (C > CSURV) (a) (b) Consumption (C) (c) Time

  3. Goodland and Ledec (1993) suggested sustainability requires that we: • optimize among efficiency and equity, as well as non-economic goals • conservatively assume that future generations require as many natural resources as us • use non-renewable resources so as not to preclude easy access by future generations • deplete non-renewable energy resources slow enough to allow transition to renewable energy • maintain agricultural and biological productivity at the local or site level (

  4. Ecological economists emphasized: • critical thresholds governing ecosystem functioning • resilience of natural systems Rise in average temperature Source:Adapted from Perrings and Pearce (1994)

  5. Six concepts of sustainability from Perman et al. (1999): • A sustainable state is one in which utility (or consumption is non-declining through time. • A sustainable state is one in which resources are managed so as to maintain production opportunities for the future. • A sustainable state is one in which the natural capital stock is non-declining through time. • A sustainable state is one in which resources are managed so as to maintain a sustainable yield of services. • A sustainable state is one which satisfies minimum conditions of ecosystem stability and resilience through time. • Sustainable development as capacity and consensus building

  6. Howarth’s (2007)fair-sharing principle: “Protecting the rights of future generations requires either the conservation of environmental resources or compensatory measures … that ensure the fair and proportionate sharing of net benefits over intergenerational time scales” (p656) 

  7. Measuring Sustainability: What’s wrong with GNP? • defensive expenditures • residual pollution damages • non-market environmental goods & services • depletion of natural capital

  8. Example: The Gulf of Mexico Oil Spill The following effects would emanate from a serious coastal oil spill. Indicate which increase, decrease or have no effect on GNP (+/- or 0). • loss of oil (ie. reduction in stocks)? • costs of the oil spill cleanup? • wildlife damage and deaths (not related to tourism)? • impact on commercial fishing? • impact on tourism? • repair or replacement of the drilling platform? What do you think the overall effect would be?

  9. Alternative 1: Measuring Sustainable Income (Green Accounts) Sustainable income is defined as (Hicks 1930): “the level of national income that does not reduce the value of assets and therefore productive capacity and can be produced in perpetuity.” From GNP, • deduct preventive or defensive expenditures • deduct value of residual pollution damage • deduct depreciation of manufactured capital • deduct depletion of natural capital

  10. GDP and NDP as a Measure of Sustainable Income in Indonesia, 1974-84

  11. Alternative 2: Improved Measures of Welfare (non-GNP) • Often referred to as Genuine Savings approaches • Index of Sustainable Economic Welfare (ISEW) developed by Daly and Cobb (1989) or Genuine Progress Indicators (GPI). • Pearce-Atkinson Indicator and later extensions (Net Adjusted Savings) that calculate genuine savings by deducting (a) manufactured capital depreciation and (b) natural capital depletion, and other components, from savings in the economy

  12. The Pearce-Atkinson Sustainability Indicator,Selected Sub-Saharan African Countries (% of GDP) Source: Pearce and Atkinson 1995

  13. Adjusted Net Saving in the Six Black Sea Countries, 1996 - 2004 Source: http://web.worldbank.org. Calculation of Adjusted Net Savings involves deducting (a) depreciation of manufactured capital, (b) depletion of natural resources and (c) residual pollution damages and adding (d) current education expenditures.

  14. Alternative 3: Physical or Satellite Accounts • Separate physical accounts are prepared for natural and environmental resources, but in physical stock and flow units. • Examples include Norway and France.

  15. Structure of Material Resource Accounts for Norway Source: Alfsen, Bye, and Lorentsen (1987).

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