Intergenerational justice when future worlds are uncertain

Humberto Llavador (), John E. Roemer and Joaquim Silvestre
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Humberto Llavador: http://www.econ.upf.edu/en/people/onefaculty.php?id=p2073

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We study the problem of intergenerational welfare maximization when the existence of future worlds is uncertain. One of the major examples of this problem today concerns global warming, and how to structure resource use intertemporally in its presence. The theoretical issues raised by uncertainty are quite complex, and in the interest of clarity, we will study only two simple models in this article – and neither of them explicitly models the effect of production on the biosphere and global temperature. In a companion paper (Llavador, Roemer, and Silvestre, 2009), we study a more complex version of the second model of this article, which does take into account the biosphere as a renewable resource: but that paper studies only the case with no uncertainty concerning the existence of future generations. The conclusions of the present paper suggest some inferences for the more complex problem. We study several (intergenerational) social welfare functions: utilitarian, Rawlsian, ‘extended Rawlsian,’ and ‘Rawlsian with growth.’ The Rawlsian function is identified with the view of sustainability, in a model with production.1 Sustainability, in our parlance, means sustaining human welfare over time at the highest possible level. This is often called ‘weak sustainability,’ to be contrasted with ‘strong sustainability’, which advocates sustaining the physical stock of bio-resources – species variety, forests, and so on. (See, for instance, Neumayer, 2003, and the articles in Asheim, 2007.) In another dimension, it is to be contrasted with the discountedutilitarian approach, which does not advocate sustaining human welfare over time, but rather the maximization of a weighted sum of generational welfare levels.

Keywords: Discounted utilitarianism; Rawlsian; sustainability; maximin; uncertainty; expected utility; von Neumann-Morgenstern; dynamic welfare maximization (search for similar items in EconPapers)
JEL-codes: D63 D81 O40 Q54 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-mic
Date: 2009-10
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Working Paper: Intergenerational Justice when Future Worlds Are Uncertain (2009)
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