- Email: [email protected]
Weak sustainability and viable technologies
Ecological Economics 22 (1997) 239 – 247
ANALYSIS
Weak sustainability and viable technologies John Gowdy *, Sabine O’Hara Department of Economics, Rensselaer Polytechnic Institute, Troy, New York 12180, USA Received 10 January 1996; accepted 29 July 1996
Abstract The context of the concept of weak sustainability is examined using a three-tier hierarchy of value. We argue that weak sustainability is relevant only in the context of market exchange at a particular point in time. It offers an inadequate guide to the sustainability of social institutions and of the natural world. On the other hand, Georgescu-Roegen’s concept of a viable technology recognizes that the integrity of the social and environmental systems surrounding market activity must be maintained if the human species is to persist through time. The concept of viability recognizes that market activity depends not only upon the sustaining functions of the environment but also upon the social sustaining functions of human institutions. © 1997 Elsevier Science B.V. Keywords: Weak sustainability; Natural capital; Manufactured capital
1. Introduction One of the most controversial ideas in the burgeoning literature on sustainable development is the notion of weak sustainability. Conceptually, weak sustainability is based on the savings rule and the assumption of substitutability between capital and natural resources. It assumes that the total capital stock should be non-decreasing, and
* Corresponding author. Tel.: +1 518 2768094; fax: + 1 518 6743552; e-mail: [email protected]
that the contributions of the non-human world to economic production, ‘natural capital’, and the contributions of human manufactured1 capital are substitutable. Natural capital includes non-renewable resources such as minerals and fossil fuels, and renewable resources such as economically valuable biological species. Manufactured capital 1 In using the term ‘manufactured’ capital instead of the more familiar ‘man-made’ capital we follow Victor et al. (1995). Not only is manufactured capital a more inclusive term, it also gives a more accurate description of the type of capital which is generated by processing material rather than that directly extracted from nature or contributed by humans.
0921-8009/97/$17.00 © 1997 Elsevier Science B.V. All rights reserved. PII S 0 9 2 1 - 8 0 0 9 ( 9 7 ) 0 0 0 9 3 - 1
240
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
consists of all human made machines and tools used in economic production. Its construction requires the physical transformation of natural resources and human labor originating in both natural and human capital (Daly, 1994, p. 26; Victor et al., 1995). Given the substitutability assumption, it is permissible to lump natural and manufactured capital together and be concerned only about maintaining the total capital stock. Following Pearce and Atkinson (1993, p. 104), let Z be a sustainability indicator, S be savings, and dM and dN be, respectively, the depreciation of manufactured and natural capital. Weak sustainability is achieved if an economy saves more than the combined depreciation of the two kinds of capital, that is, Z\ 0 if and only if S \ (dM +dN ). Conceptually, weak sustainability follows a central assumption of neoclassical economic theory and policy, namely, universal substitutability. If such substitution is possible, an economy is sustainable even if it draws down its stock of natural capital, provided it creates enough manufactured capital to compensate for the loss of natural capital. Weak sustainability is an ‘econocentric’ concept. In this world view, the universe of discourse is restricted to the market economy. Market exchange values, arising from individual decisions made at a particular point in time, are the basis for weak sustainability. In contrast, GeorgescuRoegen’s notion of a viable technology is ‘ecocentric’. Used as a policy guide, viable decisions concerning natural resource use are made according to how they affect the biophysical universe whose stability is essential for the long-run survival of our species. Viable policies follow Georgescu-Roegen’s dictum ‘Love thy species as thyself’.
weak sustainability by focusing on capital theory. He points out that there has been a steady trend in the neoclassical literature toward the homogenization of the traditional triad of productive inputs. By treating manufactured and natural capital as substitutes, neoclassical theory eliminates the factor land from the traditional triad of productive inputs. Nordhaus and Tobin (1970 p. 14) write: The prevailing standard model of growth assumes that there are no limits on the feasibility of expanding the supplies of nonhuman agents of production. It is basically a two-factor model in which production depends only on labor and reproducible capital. Land and resources, the third member of the triad, have generally been dropped. Although Pearce and Turner (1990), Pearce et al. (1990) and other members of the London School (Victor, 1991) take a more comprehensive approach toward sustainability by recognizing that natural capital serves other than economic functions, they generally contend that market prices may be established as reliable indicators of the scarcity of all types of capital. Victor takes Pearce and Turner to task for ignoring the overwhelming difficulties (and in fact the impossibility) of constructing a logically consistent price even for manufactured capital, much less for natural resources in situ.2 He also points to the danger of using one word, ‘capital’, to refer to manufactured, natural and human capital (Victor, 1994). If there are limits to substitutability between these three kinds of capital then it is a mistake to homogenize them by simply adding them up and using the single term ‘capital’ for the total. Martinez-Alier’s (1995) criticism of weak sustainability focuses on the empirical results
2. Criticisms of weak sustainability Pearce and Atkinson (1992, 1993) and many others discuss the objections that have been raised as to the substitutability of natural capital and about its quantification and valuation in monetary units. Victor (1991) examines the notion of
2 Georgescu-Roegen (1976, p. xix) is clear on this point: ‘Some economists even speak of the cost of pollution or of resource depletion, thus proving that they are completely unaware of the physics of economic value, i.e., of thermodynamics. Prices are only parochial elements of the economic struggle of the human species.
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
of Pearce and Atkinson (1993) calculations of this measure. By their measure, most of the Northern industrialized countries are judged to be sustainable, as is the world economy as a whole, given the dominance of the North in total gross world product. According to Pearce and Atkinson’s calculations (1993, p. 106) the Japanese economy is the most sustainable since its savings rate is very high and therefore exceeds the combined depreciation of natural and manufactured capital. There are other objections in addition to those raised by Martinez-Alier and Victor, such as difficulties in measuring savings rates, the problem of reducing uncertainty to risk (Bishop, 1979), and the insurmountable difficulties involved in measuring the various attributes and functions of the biophysical world and assigning to them a one-dimensional, monetary value called ‘natural capital’ (Vatn and Bromley, 1994). By lumping all manufactured and biophysical resources together as capital, the depletion of fossil fuels (Beckerman, 1975), the reduction of biodiversity (Solow, 1993) or even disrupting the climate-stabilizing features of the atmosphere (Nordhaus, 1992) are judged to be permissible and consistent with sustainability. As long as the criterion of weak sustainability is met, with savings outstripping capital depletion, there is no conflict between the destruction of species and ecosystems, or the depletion of fossil fuels, and the goal of sustainability. As Daly (1995) points out, the pre-analytic vision of the economy held by neoclassical economists sees the relevant universe as being the market economy. In this econocentric view, all features of the human and natural world are reduced to inputs and outputs within this system. All attributes of the biophysical world and of human societies are reduced to isolated, onedimensional, atomistic market signals. The preanalytic vision of most ecologists and environmentally-oriented economists is ecocentric. It sees the economy as being a subset of the larger biophysical world. As shown in Fig. 1, a third preanalytic view can be added, called ‘anthropocentric’. This view recognizes that the market economy is a subset of a larger world containing all human institutions, customs, and historical
241
Fig. 1. Hierarchies of sustainability
contexts. It is still an anthropocentric view, however, in that it fails to recognize that humans are part of a larger biophysical system and that the long-run sustainability of our species depends on the stability of that system.3 Neoclassical economics sees all attributes of social and biological reality from the viewpoint of only one level in the many hierarchies enveloping our species, namely, market exchange. At this level all decisions are reduced to their most elemental form, those made by isolated individuals and isolated firms. Economic man has no social context and the economic firm has no physical context. Neoclassical theory offers an inadequate framework for a general theory of economic activity relevant to the total environmental context and the social institutions essential for the longterm survival of the human species. It is a theory of isolated exchange in markets and, like the markets it describes, it homogenizes space and time. Any rules for sustainability should be explicit about their context in the hierarchy of ecosystems, social systems, and markets. These are discrete elements in a system of hierarchical structures and each element has its own rules that differ across space and time (Gowdy, 1997). The different preanalytical visions shown in Fig. 1 are based on different hierarchies in a complex system, and each results in a very different view of sustainabil3
In the very long run there is no difference between anthropocentric and ecocentric sustainability (see Cairns and Pratt, 1995).
242
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
ity. Seen in this context, the differences between weak sustainability, based on the level of market exchange, and Georgescu-Roegen’s notion of a viable technology, based on the total biophysical system which we call planet Earth, are clear.
3. Georgescu-Roegen’s concept of a viable technology Georgescu-Roegen’s (1984) definition of a viable technology is based on his distinction between stocks and flows, and funds and services. A stock is a type of productive input that may be used to generate flows at any given rate. For example, we may burn a ton of coal a day for 30 days to produce a certain amount of heat, or we may burn the entire 30 tons in 1 day. A fund, on the other hand, may be used to generate services only at a limited rate. One laborer may dig one ditch a day for a month, but cannot dig 30 ditches in 1 day. A stock is capable of producing a physical flow at any desired rate, but a fund is capable of producing a service only at a given rate. Funds include the sustaining functions which support the economic inputs of labor power, capital, and Ricardian land. Column A in Table 1 shows what a reproducible or steady state process looks like if all funds are in place and all flows enter the process at the necessary rates. Column B shows the process during a specific time interval t. The flow Table 1 Georgescu-Roegen’s representation of a reproducible process Factors
A
B
Flows Inflows from nature
−r
−R
−i +q +w
= −rt −I= −it +Q= qt +W= wt
H K L
H(t)= Ht K(t)= Kt L(t) = Lt
Inflows from other processes Outflows of products Outflows of waste Funds Labor power All capital Ricardian land
entries include inflows from nature, r; inflows from manufacturing processes, i; and outflows of useful products, q and waste, w. Georgescu-Roegen’s fund categories include human labor power (H), manufactured capital (K), and Ricardian land (L). They are the ‘agents of production’ that transform the flow of natural resources into a flow of economically valuable products (Daly, 1995, p. 153). Georgescu-Roegen (1984, p. 26), refers to Ricardian land as some ‘pure terrestrial area’. Here we use L to refer to all economic, and ecological services of natural resources including their assimilative and absorptive capacities. As Georgescu-Roegen shows, the flow entries represent physical quantities while the fund entries represent amounts of services contributed. Funds are measured by their rates of use with respect to time. Every economic process requires flows from nature as inputs and assimilative or absorptive services, referred to as sink functions, for the disposal of waste generated. The relationship between source flows and sinks to production may be used to describe a feasible technology as shown in Table 1. A feasible technology is capable of producing a specific economic product within a specific period of time. Not all feasible technologies, however, are also viable. A technology described by Table 1 is viable if and only if it can maintain the corresponding material structure which supports its resource and sink functions, and consequently support human activity indefinitely under current environmental conditions. A technology that draws down irreplaceable stocks, or generates irreducible pollution, or violates the ability of funds to provide assimilative and restorative services, is not viable. A viable technology must maintain the fund factors H, K, and L. The relevance of all this to the sustainability debate is that all production processes are characterized by supporting services which are ultimately limitational. A weakly sustainable process may be feasible in the very short run but it is not viable. Weak sustainability rules do not insure that a technology can perpetuate itself indefinitely because they permit the drawdown of funds in order to support current production. According to Georgescu-Roegen (1984, p. 26), in a viable
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
technology ‘‘there is no substitution between flow and fund factors of invariable quality’’. Each provision of inflows and each receiving of outflows affects not only the stock and flow factors but also the funds and services necessary to maintain them. Replenishing fund capacities is as necessary to a production process as maintaining the necessary flows. The viability rule recognizes that the integrity of the social and environmental medias surrounding the market economy must be maintained. These surrounding systems affect not only the flow and service factors directly used in production, but also the stocks and funds necessary to maintain production over the long run. The market economy is a sub-system whose existence ultimately depends on the larger social and ecological systems containing it. The sustainability of a system should be judged on the whole system, not just part of it. Under the viability rule it is not permissible to substitute features essential for social and environmental stability in order to subsidize the production of market goods. Without maintaining the sustaining functions of funds, an economic process cannot continue to produce economic flows through time. This is why Georgescu-Roegen always insisted that time must be a parameter in any production function (e.g. Q =G(H,K,L; t)). The length of the time period considered is rarely made explicit in discussions of sustainability but it is the critical point. Georgescu-Roegen (1976, p. 20) writes:
243
qualitatively, other natural or manufactured capital substitutes may temporarily compensate for the loss, but such compensation cannot continue indefinitely. Such substitution is not viable.
4. Sustaining functions The fact that all human activity depends on the sustaining function performed by biophysical systems is well-known to readers of this journal. There are, however, other kinds of assimilative functions which have been neglected by both neoclassical and ecological economists. These may be referred to as social sustaining functions which contribute to the assimilation and absorption of the effects of economic activity on the human capacity to perform work. Like biophysical sustaining functions, social sustaining functions are usually performed outside the boundaries of the production process itself. These kinds of functions are commonly provided by women in the so-called household sector and by numerous culturally specific private and public networks of human communities. These social and ecological sustaining functions provide a necessary link between input flows, funds and the capacity to receive outflows. Georgescu-Roegen (1984, p. 24) writes:
Perhaps the earth can support even 45 billion people, but certainly not ad infinitum. We should therefore ask ‘how long can the earth maintain a population of 45 billion people?’ And if the answer is, say, 1000 years, we still have to ask ‘what will happen thereafter?’
In every enterprise, in every household, a substantial amount of labor-time and material are steadily devoted to keeping the buildings, the machines, the durable goods, in a useful, workable state....Undoubtedly, when a worker leaves a process, he is a tired individual. But when the same individual returns to work next day he is again a rested worker after being restored in an adjacent household.
Flows may qualitatively change funds. Only an economic system that generates flows which are low enough or benign enough not to have an adverse effect on funds can be considered viable. A system in which flows affect the ability of workers to work or the qualitative character of the biological world can only be considered feasible. If funds are affected and services change
If the capacity to provide human input is not maintained, the ability of the system to maintain input flows is affected by reducing the capacity of funds to produce services. If the capacity to cope with the side effects of production such as stress, mental and physical exhaustion, is not maintained, the necessary, continual restoration of funds cannot take place. As global markets lead
244
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
to the increasing homogenization of labor, diverse human skills are lost, as well as the social systems which support diverse expressions of human capacity (O’Hara, 1995; Postman, 1993). Like ecological sustaining functions, social sustaining functions are the result of interactions in support systems. They are contingent upon a web of relationships which sustain human physical, emotional, and spiritual health. They are not discrete, functionally separable ‘inputs’. Sustaining functions can be supported or destroyed but they cannot be precisely controlled and allocated according to their marginal products. If they are impaired, however, production processes are negatively impacted as the agents of production (funds), as well as flows, are qualitatively changed. Two other considerations arise from the sustainability discussion. First, the reorganization of a production process so as to increase output and lower waste flows (as in the Brundtland report) may rearrange funds in such a way that additional services are required from outside the production process to maintain fund capacities. The net result of decreasing flow and increasing service requirements may thus be an increased demand for fund services from human and ecological support systems. Second, since sustaining funds exist outside the production process itself, input and product prices are incapable of reflecting changes in these funds. A production process which derives its concept of efficiency from the marginal products and the relative prices of inputs, and its output prices from the marginal cost of these inputs, cannot take account adequately of such complex and interrelated support functions. The marginal product, that is, the contribution of inputs to output, and not their contribution to maintaining fund capacities, is the basis for assigning in neoclassical theory.
5. Sustainability and economic valuation Even economists sympathetic to GeorgescuRoegen’s ideas usually see a clear break between his early work in pure theory and his later concern with entropy and bioeconomics. In his early
papers, however, Georgescu-Roegen (1936, 1950, 1954) laid the foundations for his critique of neoclassical value theory that underlies all his later work (Gowdy, 1993). He writes (GeorgescuRoegen, 1968, p. 236): ‘‘In broad perspective the history of economics emerges as a struggle with the problem of value.’’ Two common practices in economic valuation discriminate against viable technologies. First is the recurring criticism that neoclassical economics forces all objects of economic value to be judged in terms of a single common denominator, utility. Georgescu-Roegen called this the ‘ordinalist fallacy’ (Georgescu-Roegen, 1954; see also the discussion in Armstrong, 1958). Dragan and Demetrescu (1986) refer to the assumption as the ‘incommensurability of wants’, and Vatn and Bromley (1994) as the ‘incongruity problem’. In a critique of neoclassical valuation concepts Vatn and Bromley (1994, p. 130) write: Efforts to derive hypothetical values for the complex and interrelated attributes of the environment, a process that compresses this complexity into a simple metric of monetary values, results in a non-trivial loss of information. Utility is further assumed to be accurately reflected in relative prices assigned in perfectly competitive markets. To use the weak sustainability criterion, dollar values must be placed on all the attributes of natural capital (environmental funds). All attributes of nature must be reduced to one metric which must also be equivalent to measures of manufactured capital. The incongruity problem does not originate with neoclassical theory, but rather in the market economy described by that theory. By forcing all choices into a framework requiring the commensurability of wants and productive inputs, market economies can make no distinction between the qualitative differences that exist between stocks and flows, and funds and services. In reality, fund functions are constrained by biological time and the complexity of biological processes. They are not mechanical, replaceable, or even necessarily reversible. To simply treat them as if the utility they generate is comparable to that generated by
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
manufactured output is to assume that we can fully comprehend, evaluate, and meet the longrun support needs of human and ecological systems. This assumption may be workable for relatively homogeneous goods whose production and consumption processes are well-known and well-defined both in their direct and indirect effects. In most cases, however, assuming full information and perfect foresight about the impacts flows generate is problematic. While we can influence many components of the complex processes supporting wants and needs, we are increasingly aware that often unforeseen, uncontrollable, and significant side effects result from our interferences. In addition, the utility measure is based solely on isolated individual valuation of needs or wants made in market contexts (Fig. 1). Yet when ecological or social sustaining functions are affected, or when the choices available to future generations are diminished, decisions based on changes in the utility of isolated individuals living in the immediate present are inadequate. Requirements regarding water quality, pesticide use, or PCB emissions are not based on individual preferences only, but on collective needs. Markets are incapable of conveying collective preferences which are more than the simple aggregation of individual utilities. Distortions are especially likely as the cultural biases of market economies continue to undermine the diverse knowledge base present in numerous cultural and ecological contexts (O’Hara, 1995, 1997). The second feature of purely economic valuation that works against viablility is the practice of discounting the future. Discounting is necessary for the market determination of relative prices, but it further discriminates against the maintenance of funds and favors the use of stocks. Market values are determined by individuals making decisions at a particular point in time. It is impossible for values generated in this way to insure the sustainability of social and biophysical systems operating on vastly different time scales. Georgescu-Roegen (1976, p. 31) was adamant about the inability of markets to address intergenerational equity.
245
One of the most important ecological problems of mankind, therefore, is the relationship of the quality of life of one generation with another, more specifically, the distribution of mankind’s dowry among all generations. Economics cannot even dream of solving this problem. Discounting will tend to favor the use of a resource as a stock (e.g. logging a rainforest) which can be used up immediately rather than maintaining it as a fund capable of producing a smaller, but steady and indefinite, service (e.g. sustainable harvesting of rainforest products). Maintaining funds through time-dependent processes of assimilation, absorption, or regeneration is consequently less valuable, since discounted funds are judged less productive than immediately available stocks. The logic of market valuation discriminates against biological and in favor of mechanical processes whose physical limitation and maintenance needs are less complex and less demanding (Mellor, 1994).
6. Conclusion Does the ‘viability rule’ mean that everything in the natural world be kept absolutely intact no matter what the effect on people living in the present? If not, when is it permissible to draw down irreplaceable resources in order to benefit present generations? The concern with sustainable development implies two things. First, it implies that our current way of living is not sustainable or we would not be discussing sustainable development in the first place. Second, it implies some desirable end state of affairs, different than the current state. This end point, sustainability, should be viable, that is, capable of perpetuating itself for some reasonably long period of time. So sustainable development implies some definite path to get from where we are now to the desired end state. In this context, the question is ‘How much of our natural inheritance are we willing to sacrifice to make people living in the present better off while we are on the path toward sustainability?’ Referring again to Fig. 1, on what level(s) should these decisions be made? At the
246
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
level of the market, human society as a whole, or the biophysical ‘home’ we inhabit? To offer guidance for sustainable economic activity a variety of monetary measures, non-monetary measures, and qualitative descriptions are needed. These measures and descriptions should capture the diversity of complex systems instead of homogenizing them. They should also capture the complementarity between human labor, nature, and manufactured capital rather than assuming substitutability without consequences. Recognizing the distinctions between stocks and flows and funds and services calls into question the standard notions of substitutability, homogenization, and pure time preference. Economic processes are sustainable only if they sustain the funds that support them. Considering the significant loss of information and the drastic simplification of complexity necessary to construct weak sustainability measures, weak sustainability rules cannot provide significant insight even into economic sustainability as defined by market exchange, much less ecological sustainability or the sustainability of the funds provided by human labor and nature. Georgescu-Roegen’s concept of viability offers a better foundation for sustainable policies than do weak sustainability rules based upon the neoclassical model of production. His concept allows us to define sustainability in terms of positive flows produced, and funds maintained, by the economic process. It is probably true, as Georgescu-Roegen alluded to4 that the only viable economies were those of hunter-gatherers. Thus it should be explicitly recognized that a sustainable (stationary state) economy can only be defined approximately for a specific time period. Unlike weak sustainability, viability requires that the duration of the time period be clearly spelled out. The next task is to operationalize Georgescu-Roegen’s representation by developing measures of the heterogeneous contributions to human well-being and to more adequately define 4 …although [the amount of depleted resources per person] is a historical variable, it cannot be zero or even negligible unless mankind reverts sometime to a berry-picking economy’’ (Georgescu-Roegen, 1976, p. 23).
the complex, complementary, and hierarchical relationships which connect them. Acknowledgements We thank Kozo Mayumi and Herman Daly for comments on an earlier version of this paper. References Armstrong, R., 1958. Utility and the ‘ordinalist fallacy’. Rev. Econ. Stud. 25, 172 – 181. Beckerman, W., 1975. The fallacy of finite resources. Bank of New South Wales Review 14 – 10. Bishop, R., 1979. Endangered species, irreversibility, and uncertainty: a reply. Amer. J. Agri. Econ. 61, 376 – 379. Cairns, J., Pratt, J.R., 1995. The relationship between ecosystem health and delivery of ecosystem services. In: Rapport, D.J., Gaudet, C.L., Carlow, P. (Eds.), Evaluating and Monitoring the Health of Large-Scale Ecosystems, NATO ASI series, Springer, Berlin. Daly, H., 1994. Operationalizing sustainable development by investing in natural capital. In: Jansson, A., Hammer, M., Folke, C., Costanza, R., (Eds.), Investing in Natural Capital, Island Press, Washington DC. Daly, H., 1995. On Nicholas Georgescu-Roegen’s contributions to economics: an obituary essay. Ecol. Econ. 13, 149 – 154. Dragan, C., Demetrescu, M., 1986. Entropy and Bioeconomics. Nagard Press, Milan. Georgescu-Roegen, N., 1936. The pure theory of consumer’s behavior. Q. J. Econ. 50, 545 – 593. Georgescu-Roegen, N., 1950. The theory of choice and the constancy of economic laws. Q. J. Econ. 64, 125 – 138. Georgescu-Roegen, N., 1954. Choice, expectations, and measurability. Q. J. Econ. 68, 503 – 534. Georgescu-Roegen, N., 1976. Foreword to Energy and Economic Myths. Pergamon Press, New York. Georgescu-Roegen, N. 1968. Utility. In: International Encyclopedia of the Social Sciences. Macmillan, New York. Georgescu-Roegen, N., 1984. Feasible recipes and viable technologies. Atlantic Econ. J. 12, 21 – 30. Gowdy, J., 1993. Georgescu-Roegen’s utility theory applied to environmental economics. In: Dragan, C., Seifert, E., Demetrescu, M. (Eds.), Entropy and Bioeconomics. Milan, Nagard Press. Gowdy, J., 1997. The value of biodiversity: markets, society, and ecosystems. Land Econ. 73, 25 – 41. Martinez-Alier, J., 1995. The environment as a luxury good or too poor to be green. Ecol. Econ. 13, 1 – 10. Mellor, M., 1994. Materialist communal politics: getting from there to here. Paper presented at the Third Biannual Meeting of the International Society for Ecological Economics, San Jose, Costa Rica.
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247 Nordhaus, W., 1992. An optimal transition path for controlling greenhouse gases. Science 258, 1315–1319. Nordhaus, W., Tobin, J., 1970. Is growth obsolete? National Bureau of Economic Research. Quoted in H. Daly, Steady State Economics, San Francisco, W.H. Freeman (1977). O’Hara, S., 1995. Valuing socio-diversity. Int. J. of Soc. Econ. 22 (5), 31 – 49. O’Hara, S., 1997. Toward a sustaining production theory. Ecol. Econ. 20, 141 – 154. Pearce, D.W., Atkinson, G.D., 1992. Are National Economies Sustainable? Measuring Sustainable Development. Centre for Social and Economic Research in the Global Environment (CSERGE) Working Paper 92-11. University College London. Pearce, D.W., Atkinson, G.D., 1993. Capital theory and the measurement of sustainable development: an indicator of weak sustainability. Ecol. Econ. 8, 103–108. Pearce, D.W., Turner, K., 1990. Economics of Natural Resour-
.
247
ces and the Environment. Johns Hopkins Press, Baltimore. Pearce, D., Markandya, A., Barbier, D.E., 1990. Blueprint for a Green Economy. Earthscan, London. Postman, N., 1993. Technology: The Surrender of Culture to Technology. Vintage Books, New York. Solow, R., 1993. Sustainability: an economist’s perspective. In: Dorfman, R., Dorfman, N., (Eds.), Economics of the Environment. Norton, New York. Vatn, A., Bromley, D., 1994. Choices without prices without apologies. J. Environ. Econ. Manage. 26, 126 – 148. Victor, P.A., 1991. Indicators of sustainable development: some lessons from capital theory. Ecol. Econ. 4, 191 – 213. Victor, P.A., 1994. Natural capital, substitution and indicators of sustainable development. Paper presented at the Third Biennial Meeting of the International Society for Ecological Economics, San Jose, Costa Rica. Victor, P.A., Hanna, J.E., Kubursi, A., 1995. How strong is weak sustainability? Economie Applique 48, 75 – 94.
.
ANALYSIS
Weak sustainability and viable technologies John Gowdy *, Sabine O’Hara Department of Economics, Rensselaer Polytechnic Institute, Troy, New York 12180, USA Received 10 January 1996; accepted 29 July 1996
Abstract The context of the concept of weak sustainability is examined using a three-tier hierarchy of value. We argue that weak sustainability is relevant only in the context of market exchange at a particular point in time. It offers an inadequate guide to the sustainability of social institutions and of the natural world. On the other hand, Georgescu-Roegen’s concept of a viable technology recognizes that the integrity of the social and environmental systems surrounding market activity must be maintained if the human species is to persist through time. The concept of viability recognizes that market activity depends not only upon the sustaining functions of the environment but also upon the social sustaining functions of human institutions. © 1997 Elsevier Science B.V. Keywords: Weak sustainability; Natural capital; Manufactured capital
1. Introduction One of the most controversial ideas in the burgeoning literature on sustainable development is the notion of weak sustainability. Conceptually, weak sustainability is based on the savings rule and the assumption of substitutability between capital and natural resources. It assumes that the total capital stock should be non-decreasing, and
* Corresponding author. Tel.: +1 518 2768094; fax: + 1 518 6743552; e-mail: [email protected]
that the contributions of the non-human world to economic production, ‘natural capital’, and the contributions of human manufactured1 capital are substitutable. Natural capital includes non-renewable resources such as minerals and fossil fuels, and renewable resources such as economically valuable biological species. Manufactured capital 1 In using the term ‘manufactured’ capital instead of the more familiar ‘man-made’ capital we follow Victor et al. (1995). Not only is manufactured capital a more inclusive term, it also gives a more accurate description of the type of capital which is generated by processing material rather than that directly extracted from nature or contributed by humans.
0921-8009/97/$17.00 © 1997 Elsevier Science B.V. All rights reserved. PII S 0 9 2 1 - 8 0 0 9 ( 9 7 ) 0 0 0 9 3 - 1
240
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
consists of all human made machines and tools used in economic production. Its construction requires the physical transformation of natural resources and human labor originating in both natural and human capital (Daly, 1994, p. 26; Victor et al., 1995). Given the substitutability assumption, it is permissible to lump natural and manufactured capital together and be concerned only about maintaining the total capital stock. Following Pearce and Atkinson (1993, p. 104), let Z be a sustainability indicator, S be savings, and dM and dN be, respectively, the depreciation of manufactured and natural capital. Weak sustainability is achieved if an economy saves more than the combined depreciation of the two kinds of capital, that is, Z\ 0 if and only if S \ (dM +dN ). Conceptually, weak sustainability follows a central assumption of neoclassical economic theory and policy, namely, universal substitutability. If such substitution is possible, an economy is sustainable even if it draws down its stock of natural capital, provided it creates enough manufactured capital to compensate for the loss of natural capital. Weak sustainability is an ‘econocentric’ concept. In this world view, the universe of discourse is restricted to the market economy. Market exchange values, arising from individual decisions made at a particular point in time, are the basis for weak sustainability. In contrast, GeorgescuRoegen’s notion of a viable technology is ‘ecocentric’. Used as a policy guide, viable decisions concerning natural resource use are made according to how they affect the biophysical universe whose stability is essential for the long-run survival of our species. Viable policies follow Georgescu-Roegen’s dictum ‘Love thy species as thyself’.
weak sustainability by focusing on capital theory. He points out that there has been a steady trend in the neoclassical literature toward the homogenization of the traditional triad of productive inputs. By treating manufactured and natural capital as substitutes, neoclassical theory eliminates the factor land from the traditional triad of productive inputs. Nordhaus and Tobin (1970 p. 14) write: The prevailing standard model of growth assumes that there are no limits on the feasibility of expanding the supplies of nonhuman agents of production. It is basically a two-factor model in which production depends only on labor and reproducible capital. Land and resources, the third member of the triad, have generally been dropped. Although Pearce and Turner (1990), Pearce et al. (1990) and other members of the London School (Victor, 1991) take a more comprehensive approach toward sustainability by recognizing that natural capital serves other than economic functions, they generally contend that market prices may be established as reliable indicators of the scarcity of all types of capital. Victor takes Pearce and Turner to task for ignoring the overwhelming difficulties (and in fact the impossibility) of constructing a logically consistent price even for manufactured capital, much less for natural resources in situ.2 He also points to the danger of using one word, ‘capital’, to refer to manufactured, natural and human capital (Victor, 1994). If there are limits to substitutability between these three kinds of capital then it is a mistake to homogenize them by simply adding them up and using the single term ‘capital’ for the total. Martinez-Alier’s (1995) criticism of weak sustainability focuses on the empirical results
2. Criticisms of weak sustainability Pearce and Atkinson (1992, 1993) and many others discuss the objections that have been raised as to the substitutability of natural capital and about its quantification and valuation in monetary units. Victor (1991) examines the notion of
2 Georgescu-Roegen (1976, p. xix) is clear on this point: ‘Some economists even speak of the cost of pollution or of resource depletion, thus proving that they are completely unaware of the physics of economic value, i.e., of thermodynamics. Prices are only parochial elements of the economic struggle of the human species.
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
of Pearce and Atkinson (1993) calculations of this measure. By their measure, most of the Northern industrialized countries are judged to be sustainable, as is the world economy as a whole, given the dominance of the North in total gross world product. According to Pearce and Atkinson’s calculations (1993, p. 106) the Japanese economy is the most sustainable since its savings rate is very high and therefore exceeds the combined depreciation of natural and manufactured capital. There are other objections in addition to those raised by Martinez-Alier and Victor, such as difficulties in measuring savings rates, the problem of reducing uncertainty to risk (Bishop, 1979), and the insurmountable difficulties involved in measuring the various attributes and functions of the biophysical world and assigning to them a one-dimensional, monetary value called ‘natural capital’ (Vatn and Bromley, 1994). By lumping all manufactured and biophysical resources together as capital, the depletion of fossil fuels (Beckerman, 1975), the reduction of biodiversity (Solow, 1993) or even disrupting the climate-stabilizing features of the atmosphere (Nordhaus, 1992) are judged to be permissible and consistent with sustainability. As long as the criterion of weak sustainability is met, with savings outstripping capital depletion, there is no conflict between the destruction of species and ecosystems, or the depletion of fossil fuels, and the goal of sustainability. As Daly (1995) points out, the pre-analytic vision of the economy held by neoclassical economists sees the relevant universe as being the market economy. In this econocentric view, all features of the human and natural world are reduced to inputs and outputs within this system. All attributes of the biophysical world and of human societies are reduced to isolated, onedimensional, atomistic market signals. The preanalytic vision of most ecologists and environmentally-oriented economists is ecocentric. It sees the economy as being a subset of the larger biophysical world. As shown in Fig. 1, a third preanalytic view can be added, called ‘anthropocentric’. This view recognizes that the market economy is a subset of a larger world containing all human institutions, customs, and historical
241
Fig. 1. Hierarchies of sustainability
contexts. It is still an anthropocentric view, however, in that it fails to recognize that humans are part of a larger biophysical system and that the long-run sustainability of our species depends on the stability of that system.3 Neoclassical economics sees all attributes of social and biological reality from the viewpoint of only one level in the many hierarchies enveloping our species, namely, market exchange. At this level all decisions are reduced to their most elemental form, those made by isolated individuals and isolated firms. Economic man has no social context and the economic firm has no physical context. Neoclassical theory offers an inadequate framework for a general theory of economic activity relevant to the total environmental context and the social institutions essential for the longterm survival of the human species. It is a theory of isolated exchange in markets and, like the markets it describes, it homogenizes space and time. Any rules for sustainability should be explicit about their context in the hierarchy of ecosystems, social systems, and markets. These are discrete elements in a system of hierarchical structures and each element has its own rules that differ across space and time (Gowdy, 1997). The different preanalytical visions shown in Fig. 1 are based on different hierarchies in a complex system, and each results in a very different view of sustainabil3
In the very long run there is no difference between anthropocentric and ecocentric sustainability (see Cairns and Pratt, 1995).
242
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
ity. Seen in this context, the differences between weak sustainability, based on the level of market exchange, and Georgescu-Roegen’s notion of a viable technology, based on the total biophysical system which we call planet Earth, are clear.
3. Georgescu-Roegen’s concept of a viable technology Georgescu-Roegen’s (1984) definition of a viable technology is based on his distinction between stocks and flows, and funds and services. A stock is a type of productive input that may be used to generate flows at any given rate. For example, we may burn a ton of coal a day for 30 days to produce a certain amount of heat, or we may burn the entire 30 tons in 1 day. A fund, on the other hand, may be used to generate services only at a limited rate. One laborer may dig one ditch a day for a month, but cannot dig 30 ditches in 1 day. A stock is capable of producing a physical flow at any desired rate, but a fund is capable of producing a service only at a given rate. Funds include the sustaining functions which support the economic inputs of labor power, capital, and Ricardian land. Column A in Table 1 shows what a reproducible or steady state process looks like if all funds are in place and all flows enter the process at the necessary rates. Column B shows the process during a specific time interval t. The flow Table 1 Georgescu-Roegen’s representation of a reproducible process Factors
A
B
Flows Inflows from nature
−r
−R
−i +q +w
= −rt −I= −it +Q= qt +W= wt
H K L
H(t)= Ht K(t)= Kt L(t) = Lt
Inflows from other processes Outflows of products Outflows of waste Funds Labor power All capital Ricardian land
entries include inflows from nature, r; inflows from manufacturing processes, i; and outflows of useful products, q and waste, w. Georgescu-Roegen’s fund categories include human labor power (H), manufactured capital (K), and Ricardian land (L). They are the ‘agents of production’ that transform the flow of natural resources into a flow of economically valuable products (Daly, 1995, p. 153). Georgescu-Roegen (1984, p. 26), refers to Ricardian land as some ‘pure terrestrial area’. Here we use L to refer to all economic, and ecological services of natural resources including their assimilative and absorptive capacities. As Georgescu-Roegen shows, the flow entries represent physical quantities while the fund entries represent amounts of services contributed. Funds are measured by their rates of use with respect to time. Every economic process requires flows from nature as inputs and assimilative or absorptive services, referred to as sink functions, for the disposal of waste generated. The relationship between source flows and sinks to production may be used to describe a feasible technology as shown in Table 1. A feasible technology is capable of producing a specific economic product within a specific period of time. Not all feasible technologies, however, are also viable. A technology described by Table 1 is viable if and only if it can maintain the corresponding material structure which supports its resource and sink functions, and consequently support human activity indefinitely under current environmental conditions. A technology that draws down irreplaceable stocks, or generates irreducible pollution, or violates the ability of funds to provide assimilative and restorative services, is not viable. A viable technology must maintain the fund factors H, K, and L. The relevance of all this to the sustainability debate is that all production processes are characterized by supporting services which are ultimately limitational. A weakly sustainable process may be feasible in the very short run but it is not viable. Weak sustainability rules do not insure that a technology can perpetuate itself indefinitely because they permit the drawdown of funds in order to support current production. According to Georgescu-Roegen (1984, p. 26), in a viable
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
technology ‘‘there is no substitution between flow and fund factors of invariable quality’’. Each provision of inflows and each receiving of outflows affects not only the stock and flow factors but also the funds and services necessary to maintain them. Replenishing fund capacities is as necessary to a production process as maintaining the necessary flows. The viability rule recognizes that the integrity of the social and environmental medias surrounding the market economy must be maintained. These surrounding systems affect not only the flow and service factors directly used in production, but also the stocks and funds necessary to maintain production over the long run. The market economy is a sub-system whose existence ultimately depends on the larger social and ecological systems containing it. The sustainability of a system should be judged on the whole system, not just part of it. Under the viability rule it is not permissible to substitute features essential for social and environmental stability in order to subsidize the production of market goods. Without maintaining the sustaining functions of funds, an economic process cannot continue to produce economic flows through time. This is why Georgescu-Roegen always insisted that time must be a parameter in any production function (e.g. Q =G(H,K,L; t)). The length of the time period considered is rarely made explicit in discussions of sustainability but it is the critical point. Georgescu-Roegen (1976, p. 20) writes:
243
qualitatively, other natural or manufactured capital substitutes may temporarily compensate for the loss, but such compensation cannot continue indefinitely. Such substitution is not viable.
4. Sustaining functions The fact that all human activity depends on the sustaining function performed by biophysical systems is well-known to readers of this journal. There are, however, other kinds of assimilative functions which have been neglected by both neoclassical and ecological economists. These may be referred to as social sustaining functions which contribute to the assimilation and absorption of the effects of economic activity on the human capacity to perform work. Like biophysical sustaining functions, social sustaining functions are usually performed outside the boundaries of the production process itself. These kinds of functions are commonly provided by women in the so-called household sector and by numerous culturally specific private and public networks of human communities. These social and ecological sustaining functions provide a necessary link between input flows, funds and the capacity to receive outflows. Georgescu-Roegen (1984, p. 24) writes:
Perhaps the earth can support even 45 billion people, but certainly not ad infinitum. We should therefore ask ‘how long can the earth maintain a population of 45 billion people?’ And if the answer is, say, 1000 years, we still have to ask ‘what will happen thereafter?’
In every enterprise, in every household, a substantial amount of labor-time and material are steadily devoted to keeping the buildings, the machines, the durable goods, in a useful, workable state....Undoubtedly, when a worker leaves a process, he is a tired individual. But when the same individual returns to work next day he is again a rested worker after being restored in an adjacent household.
Flows may qualitatively change funds. Only an economic system that generates flows which are low enough or benign enough not to have an adverse effect on funds can be considered viable. A system in which flows affect the ability of workers to work or the qualitative character of the biological world can only be considered feasible. If funds are affected and services change
If the capacity to provide human input is not maintained, the ability of the system to maintain input flows is affected by reducing the capacity of funds to produce services. If the capacity to cope with the side effects of production such as stress, mental and physical exhaustion, is not maintained, the necessary, continual restoration of funds cannot take place. As global markets lead
244
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
to the increasing homogenization of labor, diverse human skills are lost, as well as the social systems which support diverse expressions of human capacity (O’Hara, 1995; Postman, 1993). Like ecological sustaining functions, social sustaining functions are the result of interactions in support systems. They are contingent upon a web of relationships which sustain human physical, emotional, and spiritual health. They are not discrete, functionally separable ‘inputs’. Sustaining functions can be supported or destroyed but they cannot be precisely controlled and allocated according to their marginal products. If they are impaired, however, production processes are negatively impacted as the agents of production (funds), as well as flows, are qualitatively changed. Two other considerations arise from the sustainability discussion. First, the reorganization of a production process so as to increase output and lower waste flows (as in the Brundtland report) may rearrange funds in such a way that additional services are required from outside the production process to maintain fund capacities. The net result of decreasing flow and increasing service requirements may thus be an increased demand for fund services from human and ecological support systems. Second, since sustaining funds exist outside the production process itself, input and product prices are incapable of reflecting changes in these funds. A production process which derives its concept of efficiency from the marginal products and the relative prices of inputs, and its output prices from the marginal cost of these inputs, cannot take account adequately of such complex and interrelated support functions. The marginal product, that is, the contribution of inputs to output, and not their contribution to maintaining fund capacities, is the basis for assigning in neoclassical theory.
5. Sustainability and economic valuation Even economists sympathetic to GeorgescuRoegen’s ideas usually see a clear break between his early work in pure theory and his later concern with entropy and bioeconomics. In his early
papers, however, Georgescu-Roegen (1936, 1950, 1954) laid the foundations for his critique of neoclassical value theory that underlies all his later work (Gowdy, 1993). He writes (GeorgescuRoegen, 1968, p. 236): ‘‘In broad perspective the history of economics emerges as a struggle with the problem of value.’’ Two common practices in economic valuation discriminate against viable technologies. First is the recurring criticism that neoclassical economics forces all objects of economic value to be judged in terms of a single common denominator, utility. Georgescu-Roegen called this the ‘ordinalist fallacy’ (Georgescu-Roegen, 1954; see also the discussion in Armstrong, 1958). Dragan and Demetrescu (1986) refer to the assumption as the ‘incommensurability of wants’, and Vatn and Bromley (1994) as the ‘incongruity problem’. In a critique of neoclassical valuation concepts Vatn and Bromley (1994, p. 130) write: Efforts to derive hypothetical values for the complex and interrelated attributes of the environment, a process that compresses this complexity into a simple metric of monetary values, results in a non-trivial loss of information. Utility is further assumed to be accurately reflected in relative prices assigned in perfectly competitive markets. To use the weak sustainability criterion, dollar values must be placed on all the attributes of natural capital (environmental funds). All attributes of nature must be reduced to one metric which must also be equivalent to measures of manufactured capital. The incongruity problem does not originate with neoclassical theory, but rather in the market economy described by that theory. By forcing all choices into a framework requiring the commensurability of wants and productive inputs, market economies can make no distinction between the qualitative differences that exist between stocks and flows, and funds and services. In reality, fund functions are constrained by biological time and the complexity of biological processes. They are not mechanical, replaceable, or even necessarily reversible. To simply treat them as if the utility they generate is comparable to that generated by
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
manufactured output is to assume that we can fully comprehend, evaluate, and meet the longrun support needs of human and ecological systems. This assumption may be workable for relatively homogeneous goods whose production and consumption processes are well-known and well-defined both in their direct and indirect effects. In most cases, however, assuming full information and perfect foresight about the impacts flows generate is problematic. While we can influence many components of the complex processes supporting wants and needs, we are increasingly aware that often unforeseen, uncontrollable, and significant side effects result from our interferences. In addition, the utility measure is based solely on isolated individual valuation of needs or wants made in market contexts (Fig. 1). Yet when ecological or social sustaining functions are affected, or when the choices available to future generations are diminished, decisions based on changes in the utility of isolated individuals living in the immediate present are inadequate. Requirements regarding water quality, pesticide use, or PCB emissions are not based on individual preferences only, but on collective needs. Markets are incapable of conveying collective preferences which are more than the simple aggregation of individual utilities. Distortions are especially likely as the cultural biases of market economies continue to undermine the diverse knowledge base present in numerous cultural and ecological contexts (O’Hara, 1995, 1997). The second feature of purely economic valuation that works against viablility is the practice of discounting the future. Discounting is necessary for the market determination of relative prices, but it further discriminates against the maintenance of funds and favors the use of stocks. Market values are determined by individuals making decisions at a particular point in time. It is impossible for values generated in this way to insure the sustainability of social and biophysical systems operating on vastly different time scales. Georgescu-Roegen (1976, p. 31) was adamant about the inability of markets to address intergenerational equity.
245
One of the most important ecological problems of mankind, therefore, is the relationship of the quality of life of one generation with another, more specifically, the distribution of mankind’s dowry among all generations. Economics cannot even dream of solving this problem. Discounting will tend to favor the use of a resource as a stock (e.g. logging a rainforest) which can be used up immediately rather than maintaining it as a fund capable of producing a smaller, but steady and indefinite, service (e.g. sustainable harvesting of rainforest products). Maintaining funds through time-dependent processes of assimilation, absorption, or regeneration is consequently less valuable, since discounted funds are judged less productive than immediately available stocks. The logic of market valuation discriminates against biological and in favor of mechanical processes whose physical limitation and maintenance needs are less complex and less demanding (Mellor, 1994).
6. Conclusion Does the ‘viability rule’ mean that everything in the natural world be kept absolutely intact no matter what the effect on people living in the present? If not, when is it permissible to draw down irreplaceable resources in order to benefit present generations? The concern with sustainable development implies two things. First, it implies that our current way of living is not sustainable or we would not be discussing sustainable development in the first place. Second, it implies some desirable end state of affairs, different than the current state. This end point, sustainability, should be viable, that is, capable of perpetuating itself for some reasonably long period of time. So sustainable development implies some definite path to get from where we are now to the desired end state. In this context, the question is ‘How much of our natural inheritance are we willing to sacrifice to make people living in the present better off while we are on the path toward sustainability?’ Referring again to Fig. 1, on what level(s) should these decisions be made? At the
246
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247
level of the market, human society as a whole, or the biophysical ‘home’ we inhabit? To offer guidance for sustainable economic activity a variety of monetary measures, non-monetary measures, and qualitative descriptions are needed. These measures and descriptions should capture the diversity of complex systems instead of homogenizing them. They should also capture the complementarity between human labor, nature, and manufactured capital rather than assuming substitutability without consequences. Recognizing the distinctions between stocks and flows and funds and services calls into question the standard notions of substitutability, homogenization, and pure time preference. Economic processes are sustainable only if they sustain the funds that support them. Considering the significant loss of information and the drastic simplification of complexity necessary to construct weak sustainability measures, weak sustainability rules cannot provide significant insight even into economic sustainability as defined by market exchange, much less ecological sustainability or the sustainability of the funds provided by human labor and nature. Georgescu-Roegen’s concept of viability offers a better foundation for sustainable policies than do weak sustainability rules based upon the neoclassical model of production. His concept allows us to define sustainability in terms of positive flows produced, and funds maintained, by the economic process. It is probably true, as Georgescu-Roegen alluded to4 that the only viable economies were those of hunter-gatherers. Thus it should be explicitly recognized that a sustainable (stationary state) economy can only be defined approximately for a specific time period. Unlike weak sustainability, viability requires that the duration of the time period be clearly spelled out. The next task is to operationalize Georgescu-Roegen’s representation by developing measures of the heterogeneous contributions to human well-being and to more adequately define 4 …although [the amount of depleted resources per person] is a historical variable, it cannot be zero or even negligible unless mankind reverts sometime to a berry-picking economy’’ (Georgescu-Roegen, 1976, p. 23).
the complex, complementary, and hierarchical relationships which connect them. Acknowledgements We thank Kozo Mayumi and Herman Daly for comments on an earlier version of this paper. References Armstrong, R., 1958. Utility and the ‘ordinalist fallacy’. Rev. Econ. Stud. 25, 172 – 181. Beckerman, W., 1975. The fallacy of finite resources. Bank of New South Wales Review 14 – 10. Bishop, R., 1979. Endangered species, irreversibility, and uncertainty: a reply. Amer. J. Agri. Econ. 61, 376 – 379. Cairns, J., Pratt, J.R., 1995. The relationship between ecosystem health and delivery of ecosystem services. In: Rapport, D.J., Gaudet, C.L., Carlow, P. (Eds.), Evaluating and Monitoring the Health of Large-Scale Ecosystems, NATO ASI series, Springer, Berlin. Daly, H., 1994. Operationalizing sustainable development by investing in natural capital. In: Jansson, A., Hammer, M., Folke, C., Costanza, R., (Eds.), Investing in Natural Capital, Island Press, Washington DC. Daly, H., 1995. On Nicholas Georgescu-Roegen’s contributions to economics: an obituary essay. Ecol. Econ. 13, 149 – 154. Dragan, C., Demetrescu, M., 1986. Entropy and Bioeconomics. Nagard Press, Milan. Georgescu-Roegen, N., 1936. The pure theory of consumer’s behavior. Q. J. Econ. 50, 545 – 593. Georgescu-Roegen, N., 1950. The theory of choice and the constancy of economic laws. Q. J. Econ. 64, 125 – 138. Georgescu-Roegen, N., 1954. Choice, expectations, and measurability. Q. J. Econ. 68, 503 – 534. Georgescu-Roegen, N., 1976. Foreword to Energy and Economic Myths. Pergamon Press, New York. Georgescu-Roegen, N. 1968. Utility. In: International Encyclopedia of the Social Sciences. Macmillan, New York. Georgescu-Roegen, N., 1984. Feasible recipes and viable technologies. Atlantic Econ. J. 12, 21 – 30. Gowdy, J., 1993. Georgescu-Roegen’s utility theory applied to environmental economics. In: Dragan, C., Seifert, E., Demetrescu, M. (Eds.), Entropy and Bioeconomics. Milan, Nagard Press. Gowdy, J., 1997. The value of biodiversity: markets, society, and ecosystems. Land Econ. 73, 25 – 41. Martinez-Alier, J., 1995. The environment as a luxury good or too poor to be green. Ecol. Econ. 13, 1 – 10. Mellor, M., 1994. Materialist communal politics: getting from there to here. Paper presented at the Third Biannual Meeting of the International Society for Ecological Economics, San Jose, Costa Rica.
J. Gowdy, S. O’Hara / Ecological Economics 22 (1997) 239–247 Nordhaus, W., 1992. An optimal transition path for controlling greenhouse gases. Science 258, 1315–1319. Nordhaus, W., Tobin, J., 1970. Is growth obsolete? National Bureau of Economic Research. Quoted in H. Daly, Steady State Economics, San Francisco, W.H. Freeman (1977). O’Hara, S., 1995. Valuing socio-diversity. Int. J. of Soc. Econ. 22 (5), 31 – 49. O’Hara, S., 1997. Toward a sustaining production theory. Ecol. Econ. 20, 141 – 154. Pearce, D.W., Atkinson, G.D., 1992. Are National Economies Sustainable? Measuring Sustainable Development. Centre for Social and Economic Research in the Global Environment (CSERGE) Working Paper 92-11. University College London. Pearce, D.W., Atkinson, G.D., 1993. Capital theory and the measurement of sustainable development: an indicator of weak sustainability. Ecol. Econ. 8, 103–108. Pearce, D.W., Turner, K., 1990. Economics of Natural Resour-
.
247
ces and the Environment. Johns Hopkins Press, Baltimore. Pearce, D., Markandya, A., Barbier, D.E., 1990. Blueprint for a Green Economy. Earthscan, London. Postman, N., 1993. Technology: The Surrender of Culture to Technology. Vintage Books, New York. Solow, R., 1993. Sustainability: an economist’s perspective. In: Dorfman, R., Dorfman, N., (Eds.), Economics of the Environment. Norton, New York. Vatn, A., Bromley, D., 1994. Choices without prices without apologies. J. Environ. Econ. Manage. 26, 126 – 148. Victor, P.A., 1991. Indicators of sustainable development: some lessons from capital theory. Ecol. Econ. 4, 191 – 213. Victor, P.A., 1994. Natural capital, substitution and indicators of sustainable development. Paper presented at the Third Biennial Meeting of the International Society for Ecological Economics, San Jose, Costa Rica. Victor, P.A., Hanna, J.E., Kubursi, A., 1995. How strong is weak sustainability? Economie Applique 48, 75 – 94.
.