Giles Atkinson

Capital theory and the measurement of sustainable development: an indicator of "weak" sustainability

The measurement of sustainable development is not without considerable difficulties, yet this should not detract from the positive advances that can be made in this direction. In this paper we present one form that a “weak” sustainability indicator can take. Derived from a simple but intuitive savings rule, it incorporates the idea that the level of overall capital stock should be non-decreasing. Although subject to qualification at this stage, some interesting results emerge from the application of the rule to 18 countries.

Handbook of Sustainable Development

Contents:Preface1. IntroductionGiles Atkinson, Simon Dietz and Eric NeumayerPART I: FUNDAMENTALS OF SUSTAINABLE DEVELOPMENT2. Ethics and Sustainable Development: An Adaptive Approach to Environmental ChoiceBryan G. Norton3. The Capital Approach to SustainabilityGiovanni Ruta and Kirk Hamilton4. Sustainable Development in Ecological EconomicsJeroen C.J.M. van den Bergh5. Ecological and Social ResilienceW. Neil Adger6. Benefit-Cost Analysis and a Safe Minimum Standard of ConservationAlan RandallPART II: INTERGENERATIONAL EQUITY7. Valuing the Far-off Future: Discounting and its AlternativesCameron Hepburn8. Population and SustainabilityGeoffrey McNicoll9. Technological Lock-in and the Role of Innovation Timothy J. FoxonPART III: INTRAGENERATIONAL EQUITY AND THE SOCIAL DIMENSION10. Distribution, Sustainability and Environmental PolicyGeoffrey Heal and Bengt Kristrom11. Environmental Justice and SustainabilityJulian Agyeman12. Vulnerability, Poverty and Sustaining Well-being W. Neil Adger and Alexandra WinkelsPART IV: GROWTH, CONSUMPTION AND NATURAL WEALTH 13. The Resource Curse and Sustainable DevelopmentRichard M. Auty14. Structural Change, Poverty and Natural Resource DegradationRamon Lopez15. Economic Growth and the EnvironmentMatthew A. Cole16. Sustainable ConsumptionTim JacksonPART V: PROGRESS IN MEASURING SUSTAINABLE DEVELOPMENT 17. Environmental and Resource AccountingGlenn-Marie Lange18. Genuine Saving as an Indicator of SustainabilityKirk Hamilton and Katharine Bolt19. Measuring Sustainable Economic WelfareClive Hamilton20. Environmental Space, Material Flow Analysis and Ecological FootprintingIan MoffattPART VI: SUSTAINABLE DEVELOPMENT AT DIFFERENT SCALES21. Sustainable Cities and Local SustainabilityYvonne Rydin22. Sustainable AgricultureClement A. Tisdell23. Corporate Sustainability: Accountability or Impossible Dream?Rob Gray and Jan BebbingtonPART VII: THE INTERNATIONAL DIMENSION 24. International Environmental Cooperation: The Role of Political FeasibilityCamilla Bretteville Froyn25. Trade and Sustainable DevelopmentKevin P. Gallagher26. The International Politics of Sustainable DevelopmentJohn Vogler27. Financing for Sustainable DevelopmentDavid PearceIndex

Measuring sustainable development: progress on indicators *

The search for sustainability indicators should be guided by a theory of sustainable development (SD). In this paper we investigate two such theoretical frameworks and the indicators that they suggest. Indicators associated with weak sustainability are characterized by aggregative indicators such as green national income. We conclude, however, that a more promising offshoot of green accounting is measures of genuine savings (i.e. savings adjusted for loss of assets). To achieve SD, genuine savings rates must not be persistently negative. Strong sustainability indicators accord a more central role to the conservation of critical natural assets within the broader goal of prudently managing a nations portfolio of assets over time. We discuss two approaches—carrying capacity and resilience—and conclude that, while measures of resilience are potentially attractive, more research is required regarding the resilience–SD link. However, an important conclusion that we can make is that, even in an economy operating under a strong sustainability regime, genuine savings are still key indicators of SD and are complementary to measures of changes in stocks of critical natural assets.

Siblings, Not Triplets: Social Preferences for Risk, Inequality and Time in Discounting Climate Change

Arguments about the appropriate discount rate often start by assuming a Utilitarian social welfare function with isoelastic utility, in which the consumption discount rate is a function of the (constant) elasticity of marginal utility along with the (much discussed) utility discount rate. In this model, the elasticity of marginal utility simultaneously reflects preferences for intertemporal substitution, aversion to risk, and aversion to (spatial) inequality. While these three concepts are necessarily identical in the standard model, this need not be so: well-known models already enable risk to be separated from intertemporal substitution. Separating the three concepts might have important implications for the appropriate discount rate, and hence also for long-term policy. This paper investigates these issues in the context of climate-change economics, by surveying the attitudes of over 3000 people to risk, income inequality over space and income inequality over time. The results suggest that individuals do not see the three concepts as identical, and indeed that preferences over risk, inequality and time are only weakly correlated. As such, relying on empirical evidence of risk or inequality preferences may not necessarily be an appropriate guide to specifying the elasticity of intertemporal substitution.

Wealth, Welfare and Sustainability

This important book presents fresh thinking and new results on the measurement of sustainable development. Economic theory suggests that there should be a link between future wellbeing and current wealth. This book explores this linkage under a variety of headings: population growth, technological change, deforestation and natural resource trade. While the relevant theory is presented briefly, the chief emphasis is on empirical measurement of the change in real wealth: this measure of net or ‘genuine’ saving is a key indicator of sustainable development. The methodological and empirical work is bolstered by tests of the predictive power of genuine saving in explaining future consumption and economic growth. Just as importantly, the authors show that many resource-abundant countries would be considerably wealthier today had they managed to save and invest the profits from natural resource exploitation in the past.

Air pollution and green accounts

A simple model treating air emissions as cumulative pollutants is used to derive measures of ‘green net national product’. The model implies that pollution emissions are properly valued at their marginal social costs in the measurement of green NNP. The level of genuine savings, net savings less the value of resource depletion and pollution emissions, is shown to provide a useful indicator of sustainable development. Recent figures on the social costs of fuel cycles are used to derive genuine savings measures for the UK and other European nations. Several countries had negative genuine savings during the 1980s.

Accounting for the impact of conservation on human well-being

Conservationists are increasingly engaging with the concept of human well-being to improve the design and evaluation of their interventions. Since the convening of the influential Sarkozy Commission in 2009, development researchers have been refining conceptualizations and frameworks to understand and measure human well-being and are starting to converge on a common understanding of how best to do this. In conservation, the term human well-being is in widespread use, but there is a need for guidance on operationalizing it to measure the impacts of conservation interventions on people. We present a framework for understanding human well-being, which could be particularly useful in conservation. The framework includes 3 conditions; meeting needs, pursuing goals, and experiencing a satisfactory quality of life. We outline some of the complexities involved in evaluating the well-being effects of conservation interventions, with the understanding that well-being varies between people and over time and with the priorities of the evaluator. Key challenges for research into the well-being impacts of conservation interventions include the need to build up a collection of case studies so as to draw out generalizable lessons; harness the potential of modern technology to support well-being research; and contextualize evaluations of conservation impacts on well-being spatially and temporally within the wider landscape of social change. Pathways through the smog of confusion around the term well-being exist, and existing frameworks such as the Well-being in Developing Countries approach can help conservationists negotiate the challenges of operationalizing the concept. Conservationists have the opportunity to benefit from the recent flurry of research in the development field so as to carry out more nuanced and locally relevant evaluations of the effects of their interventions on human well-being. Consideración del Impacto de la Conservación sobre el Bienestar Humano Resumen Los conservacionistas cada vez más se comprometen con el concepto del bienestar humano para mejorar el diseño y la evaluación de sus intervenciones. Desde la convención de la influyente Comisión Sarkozy en 2009, los investigadores del desarrollo han estado refinando las conceptualizaciones y los marcos de trabajo para entender y medir el bienestar humano y están comenzando a convergir con un entendimiento común de cuál es la mejor forma de hacer esto. En la conservación el término bienestar humano tiene un uso amplio, pero existe la necesidad de la orientación en su operación para medir los impactos de las intervenciones de la conservación sobre la gente. Presentamos un marco de trabajo para entender el bienestar humano que podría ser útil particularmente en la conservación. El marco de trabajo incluye tres condiciones: cumplir con las necesidades, perseguir objetivos y experimentar una calidad satisfactoria de vida. Resumimos algunas de las complejidades involucradas en la evaluación de los efectos del bienestar de las intervenciones de la conservación con el entendimiento de que el bienestar varía entre la gente, en el tiempo y con las prioridades del evaluador. Los retos clave para la investigación de los impactos del bienestar de las intervenciones de la conservación incluyen la necesidad de crear una colección de estudios de caso para trazar lecciones generalizables: hacer uso del potencial de la tecnología moderna para apoyar la investigación del bienestar; y contextualizar espacial y temporalmente las evaluaciones de los impactos de la conservación sobre el bienestar dentro del marco más amplio del cambio social. Existen caminos que atraviesan la confusión que rodea al término bienestar, y los marcos de trabajo existentes, como el del acercamiento de Bienestar en Países en Desarrollo, pueden ayudar a los conservacionistas a negociar los obstáculos de la operación del concepto. Los conservacionistas tienen la oportunidad de beneficiarse del frenesí reciente de investigación en el campo del desarrollo para así realizar evaluaciones más matizadas y relevantes localmente de los efectos de sus intervenciones sobre el bienestar humano.

Assessing the Relationship Between Human Well-being and Ecosystem Services: A Review of Frameworks

Focusing on the most impoverished populations, we critically review and synthesise key themes from dominant frameworks for assessing the relationship between well-being and ecosystem services in developing countries. This requires a differentiated approach to conceptualising well-being that appropriately reflects the perspectives of the poorest-those most directly dependent on ecosystem services, and their vulnerability to external and policy-driven environmental change. The frameworks analysed draw upon environmental sciences, economics, psychology, sociology, and anthropology, and were selected on the basis of their demonstrated or potential ability to illustrate the relationship between environmental change and human well-being, as well as their prevalence in real world applications. Thus, the synthesis offered here is informed by the various theoretical, methodological, and hermeneutical contributions from each field to the notion of well-being. The review highlights several key dimensions that should be considered by those interested in understanding and assessing the impact of environmental change on the well-being of the worlds poorest people: the importance of interdisciplinary consideration of well-being, the need for frameworks that integrate subjective and objective aspects of well-being, and the central importance of context and relational aspects of well-being. The review is of particular interest to those engaged in the post-2015 development agenda.

International trade and the ‘ecological balance of payments’

The role that international trade plays in measuring sustainable development has come under recent scrutiny. We examine international resource flows using an input–output framework that is akin to ‘ecological balance of payments’ analysis. This framework allows us to use to calculate the derived demand for resources in the country of final use. The empirical section of this paper applies this model to data on global trade and natural resource depletion in 1980, 1985 and 1990. Our results provide a quantitative assessment of the significance of direct and indirect imports of resources required by Japan, the United States and the European Union. These results can also be disaggregated to permit an examination of trade relations vis-a-vis individual resource exporting countries. It is interesting to note that a number of these resource exporters appear to be unsustainable at least on the basis of the criterion that the savings rate net of asset consumption (i.e. genuine savings) should not be negative. These findings, in turn, could form the basis of policies to assist exporters in adopting prudent resource and public investment policies.

'Amenity' or 'eyesore'? Negative willingness to pay for options to replace electricity transmission towers

A frequent scenario in public decision-making is that of choosing between a number of proposed changes from the status quo. In such a case, stated preference surveys, such as the contingent valuation method, are often undertaken to assess the size of the benefits associated with each proposed change. For certain undesirable options, respondents may prefer the status quo; however, it may not be credible to directly elicit negative willingness to pay or willingness to accept to endure the change. This study, using contingent valuation, outlines an indirect means of measuring negative willingness to pay – for the problem of visual disamenity arising from alternative electricity transmission tower designs – based on the elicitation of indicators of how inconvenienced respondents would feel if a less preferred option were to replace the status quo; that is, the time and cost respondents were prepared to commit to opposing the change. The results show that taking account of negative willingness to pay matters and this significantly changes value estimates for some of the least liked options.