Edited by Henk Folmer, H. Landis Gabel, Shelby Gerking and Adam Rose
Chapter 13: Resilience and sustainability
Charles Perrings 1 SUSTAINABLE DEVELOPMENT At its most general, development may be thought of as the evolution of an economic system and the environment by which it is supported. Many of the most signiﬁcant advances in the economic analysis of the process stem from the realization that the economy and its environment are jointly determined, and that the dynamics of the joint system are highly sensitive to the size and rate of growth of the economy relative to its environment. Development implies a process of evolutionary change: a process that has all the dynamical properties of complex systems. It is characterized by path dependence, sensitivity to initial conditions, non-linearities and discontinuous change around threshold values for both environmental resources and ecological functions. For any economy there are many possible states: that is, there are many equilibria. The sustainability of any particular state (or any particular development path) depends on the properties of the stability domain corresponding to that state. The economic literature on the concept and implementation of sustainability includes two main approaches. The ﬁrst is associated with the welfarist tradition in philosophy. It assumes that the appropriate way to represent human preferences for future consumption is through the intertemporal welfare function, and the appropriate way to discuss sustainability is via the optimal consumption path for a given intertemporal welfare function (Dasgupta, 1995; Dasgupta and Mäler, 1995). These authors admit that sustainability concepts may have a role in identifying consumption paths that might satisfy the Koopmans axioms but...
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