Table of Contents

Handbook of Sustainable Development

Handbook of Sustainable Development

Second Edition

Edited by Giles Atkinson, Simon Dietz, Eric Neumayer and Matthew Agarwala

This timely and important Handbook takes stock of progress made in our understanding of what sustainable development actually is and how it can be measured and achieved.

Chapter 23: Measuring sustainable economic welfare

Philip Lawn

Subjects: economics and finance, environmental economics, environment, environmental economics, environmental geography, valuation


My initial aim in this chapter is to put forward a narrow definition of sustainable development to assist in the measurement of a nation’s sustainable development performance. To do this, I will adopt an ‘economic’ view of human development. This doesn’t mean that non-economic factors critical to human well-being should be overlooked. However, a narrowly-focused approach can serve as a pragmatic means of overcoming the complexities associated with measuring a condition as broad as sustainable development. As is evidenced in this book so far, sustainable development means different things to different people. For the purposes of this chapter, sustainable development will be defined as non-declining economic welfare. A definition of this sort infers two things about sustainable development. First, a nation must take the appropriate steps to ensure its current economic welfare is not declining. Secondly, a nation must take the necessary action to ensure its economic welfare can be sustained into the future. The important point here is that action taken to prevent economic welfare from declining in the present need not be commensurate with the action needed to sustain economic welfare indefinitely. For example, depleting natural resource stocks to increase current consumption levels may increase a nation’s current economic welfare, but it reduces a nation’s capacity to sustain its economic welfare into the future.

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