An environmental-economic measure of sustainable development

Robert Cairns and Vincent Martinet

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Abstract: A central issue in the study of sustainable development is the interplay of growth and sacrifice in a dynamic economy. This paper investigates the relationship among current consumption, sacrifice and sustainability improvement in a general context and in two canonical, stylized economies. We argue that the maximin value of utility measures what is sustainable and provides the limit to growth. Maximin value is interpreted as a dynamic environmental-economic carrying capacity and current utility as an environmentaleconomic footprint. The time derivative of maximin value is interpreted as net investment in sustainability improvement. It is called durable savings to distinguish it from genuine savings, usually computed with discounted-utilitarian prices.

Keywords: sustainable development; sustainability indicator; maximin (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (27)

Published in European Economic Review, 2014, 69, pp.4-17. ⟨10.1016/j.euroecorev.2014.03.001⟩

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Related works:
Journal Article: An environmental-economic measure of sustainable development (2014)
Working Paper: An Environmental-Economic Measure of Sustainable Development (2013)
Working Paper: An Environmental-Economic Measure of Sustainable Development (2012)
Working Paper: An Environmental-Economic Measure of Sustainable Development (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01173027

DOI: 10.1016/j.euroecorev.2014.03.001

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