Valuing the future : economic theory and sustainability

Abstract

I develop a framework for thinking about some aspects of sustainability. The framework is one for modeling the dynamic interactions of economic and biological systems, studying the time paths that can emerge from these, and then selecting one of these as optimal. I investigate alternative approaches to optimality, inquiring whether there is a concept of optimality that captures the concerns that underlie the emerging interest in sustainability. I suggest that the essence of sustainability lies in three points: a treatment of the present and the future that places a positive value on the very long run, recognition of all the ways in which environmental assets or natural capital contribute to economic well-being, and recognition of the constraints on economic activity implied by the dynamics of environmental assets.