Neoclassical Natural Capital Theory and "Weak" Indicators for Sustainability

Sylvie Faucheux, Eliot Muir and SMartin O'Connor

Land Economics, 1997, vol. 73, issue 4, 528-552

Abstract: We appraise neoclassical theory of growth with natural capital for the estimation of indicators for sustainability. Relationships between four theoretically distinct measures are clarified: Hicksian "change in capital stock value"; the Hartwick "net savings" (which excludes capital gains); "sustainable national income" (SNI); and "environmentally-adjusted net national product" (gNNP). An overlapping generations (OLG) general equilibrium model with depletable natural capital demonstrates the significance of model parameters determining technical feasibility and intertemporal distribution of consumption. Irremediable uncertainties in model specification and empirical measurement mean that the neoclassical theory is not robust for defining or estimating indicators for sustainability.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:73:y:1997:i:4:p:528-552

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