Avoiding Extinction: Equal Treatment of the Present and the Future

Graciela Chichilnisky ()

No 2009-8, Economics Discussion Papers from Kiel Institute for the World Economy

Abstract: Equal treatment for the present and the future was required in two axioms for sustainable development introduced by the author. This article shows that the two axioms are equivalent to awareness of physical limits in the long run future. We prove that two optimization problems are equivalent : maximizing discounted utility with a long run survival constraint, and maximizing utilites that treat equally the present and the future. The equal treatment axioms are therefore the essence of sustainable development. The "weight" 'lambda' given to the long run future is identified with the marginal utility of the nvironmental asset along a path that narrowly avoids extinction. An existence theorem is provided for optimizing according to the welfare criterion that treats equally the present and the future. We show that no prior welfare criteria satisfy the axioms for sustainable development introduced in [12].

Keywords: Sustainable development; sustainable preferences; axioms for sustainable development; the present and the future (search for similar items in EconPapers)
JEL-codes: D63 Q01 D71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env
Date: 2009
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Related works:
Working Paper: Avoiding Extinction: Equal Treatment of the Present and the Future (2009)
Journal Article: Avoiding extinction: equal treatment of the present and the future (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:ifwedp:7487

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