Sustainable intergene- rational Sustainable intergenerational preferences preferences Geir B. Combining sensitivity for the interests of the present Asheim with respect for the interests of the future Introduction Failure of established criteria Geir B. Asheim Sustainable preference University of Oslo Sustainable recursive SWF International Conference on Sustainable disc. utili- Science and Technology for Sustainability 2008 tarianism In Search of Sustainable Well-Being Conclusion Tokyo, 12-13 September 2008 Axioms
Brundtland commission’s definition of sustainability Sustainable intergene- rational preferences “Believing that sustainable development , which implies Geir B. meeting the needs of the present without compromising Asheim the ability of future generations to meet their own needs, Introduction should become a central guiding principle Outline of the United Nations, Governments Failure of established and private institutions, organizations and enterprises” criteria Sustainable preference Sustainable Points to a conflict between the interests of the present recursive SWF and the interests of future generations Sustainable disc. utili- tarianism But does not indicate how this conflict should be resolved Conclusion Axioms
Three different problems Sustainable intergene- rational preferences 1 Clarifying the concept of individual well-being Geir B. (as discussed in Professor Pattanaik’s keynote address) Asheim Introduction 2 Aggregating individual well-being into Outline Failure of a concept of aggregate well-being for one generation established criteria 3 Aggregating generational well-being into a measure Sustainable preference that can be used for evaluating policies that have Sustainable intergenerational effects recursive SWF Sustainable disc. utili- Utility will refer to a specific cardinal scale for generational tarianism well-being and a utilitarian criterion will make use of such a scale Conclusion Axioms
Outline Sustainable intergene- Discuss how various criteria for intergenerational equity rational preferences discounted utilitarianism Geir B. undiscounted utilitarianism Asheim ordinary/lexicographic maximin Introduction fail to take into account the interests of both present and Outline Failure of future generations established criteria Alternative I: Sustainable preference (Chichilnisky, 1996) Sustainable preference Alternative II: Sustainable recursive social welfare function Sustainable recursive (Asheim, Mitra and Tungodden, 2008) SWF Sustainable disc. utili- Special case: Sustainable discounted utilitarianism tarianism (Asheim and Mitra, 2008) Illustrate how this criterion takes Conclusion into account the interests of both the present and the future Axioms
Failure of established criteria Sustainable intergene- rational preferences Geir B. Asheim Introduction Discounted utilitarianism Failure of established criteria Undiscounted utilitarianism Disc. util. Undisc. util. Maximin Ordinary/lexicographic maximin Sustainable preference Sustainable recursive SWF Sustainable disc. utili- tarianism Conclusion Axioms
The failure of discounted utilitarianism Sustainable intergene- rational preferences Maximize the sum of utilities discounted at a positive rate Geir B. Positive utility discounting entails that Asheim generations are treated in an unequal manner Introduction Failure of established criteria Consequence in growth models Disc. util. Undisc. util. Maximin Sustainable In the Dasgupta-Heal-Solow-Stiglitz model preference of capital accumulation and resource depletion, Sustainable recursive it forces consumption to approach zero as time goes to infinity, SWF even though sustainable streams with constant or increasing Sustainable disc. utili- consumption are feasible tarianism Conclusion Axioms
Consequence in the DHSS model Sustainable intergene- rational preferences Geir B. Asheim x t Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Sustainable preference Sustainable DU recursive SWF t Sustainable disc. utili- tarianism Conclusion Axioms
The failure of discounted utilitarianism Sustainable intergene- Resolving the conflict between the present and the future rational preferences Geir B. Asheim Well - being Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Time Sustainable preference Sustainable The black stream might be preferred recursive SWF Sustainable disc. utili- tarianism Conclusion Axioms
The failure of undiscounted utilitarianism Sustainable intergene- rational preferences Maximize the undiscounted sum of utilities Geir B. Asheim It demands that the present make sacrifices for the future Introduction Failure of established Consequence in growth models criteria Disc. util. Undisc. util. Maximin In the one-sector Ramsey model Sustainable preference and in the Dasgupta-Heal-Solow-Stiglitz model Sustainable of capital accumulation and resource depletion, recursive SWF it results in consumption growth beyond all bounds, thereby Sustainable leading to gross inequalities between the present and the future disc. utili- tarianism Conclusion Axioms
Consequence in the DHSS model Sustainable intergene- rational preferences Geir B. Asheim x t UU Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Sustainable preference Sustainable DU recursive SWF t Sustainable disc. utili- tarianism Conclusion Axioms
The failure of undiscounted utilitarianism Sustainable intergene- Resolving the conflict between the present and the future rational preferences Geir B. Asheim Well - being Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Time Sustainable preference Sustainable The blue stream is always preferred recursive SWF Sustainable disc. utili- tarianism Conclusion Axioms
The failure of ordinary/lexicographic maximin Sustainable intergene- rational preferences Maximize the well-being of worst-off generation Geir B. It does not allow trading off the interests of the present Asheim for the benefit of future prosperity Introduction Failure of established criteria Consequence in growth models Disc. util. Undisc. util. Maximin Sustainable In the one-sector Ramsey model preference and in the Dasgupta-Heal-Solow-Stiglitz model Sustainable recursive of capital accumulation and resource depletion, SWF it does not permit growth and development, Sustainable disc. utili- thereby perpetuating poverty tarianism Conclusion Axioms
Consequence in the DHSS model Sustainable intergene- rational preferences Geir B. Asheim x t UU Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Maximin Sustainable Leximin preference Sustainable DU recursive SWF t Sustainable disc. utili- tarianism Conclusion Axioms
The failure of ordinary/lexicographic maximin Sustainable intergene- Resolving the conflict between the present and the future rational preferences Geir B. Asheim Well - being Introduction Failure of established criteria Disc. util. Undisc. util. Maximin Time Sustainable preference Sustainable The blue stream is never preferred recursive SWF Sustainable disc. utili- tarianism Conclusion Axioms
Sustainable preference Chichilnisky SCW (1996) Sustainable intergene- Numerically representable social welfare function rational preferences Not satisfied by Undiscounted utilitarianism Geir B. Not satisfied by Lexicographic maximin Asheim Introduction Strong Pareto ( SP ): Failure of established Sensitivity for the interests of each generation criteria Not satisfied by Ordinary maximin Sustainable preference Existence and properties No Dictatorship of the Present ( NDP ): Sustainable Not that only what happens before a finite T matters recursive SWF Not satisfied by Discounted utilitarianism Sustainable disc. utili- tarianism No Dictatorship of the Future ( NDF ): Conclusion Not that only what happens beyond a finite T matters Axioms
Existence and properties of a Sustainable preference Sustainable intergene- rational The following social welfare function is a sustainable preference: preferences Geir B. � � � ∞ Asheim t =0 δ t U ( x t ) α (1 − δ ) + (1 − α )lim inf t →∞ U ( x t ) � �� � � �� � Introduction Depends on the infinite future Discounted utilitarianism Failure of established criteria Does not satisfy Independent Future ( IF ) Sustainable preference Lead to time-inconsistent optimal streams Existence and properties Sustainable Non-existence of optimal streams in growth models recursive SWF No optimal stream in the one-sector Ramsey model Sustainable and in the Dasgupta-Heal-Solow-Stiglitz model of disc. utili- tarianism capital accumulation and resource depletion Conclusion Axioms
Consequence in the DHSS model Sustainable intergene- rational preferences Geir B. Asheim x t Introduction Failure of established criteria Sustainable preference Existence and properties Sustainable recursive DU SWF t Sustainable disc. utili- tarianism Conclusion Axioms
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