Sustainability ≡ Dynamic Efficiency + Intergenerational Equity
Abstract:
Economists have confined the concept of ‘sustainability’ to intertemporal distributional equity. We propose a broader definition, combining dynamic efficiency and intergenerational equity, and relate it to two concepts from neoclassical economics: potential Pareto-improvements and inter-personal compensation.
Published paper: “Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity” (full text)
Citation:
Stavins, Robert N., Alexander F. Wagner, and Gernot Wagner. “Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity.” Economics Letters 79, no. 3 (2003): 339-343.