TY - JOUR
T1 - Preference constraint for sustainable development
AU - Akao, Ken Ichi
N1 - Funding Information:
I would like to thank Partha Dasgupta, Kazuhiro Ueta, Sjak Smulders, Dimitrios Varvarigos and the participants in the conference on sustainable development economics at Kyoto University in 2010. I am also grateful to the anonymous referee and Shunsuke Managi (the handling editor). Their comments and suggestions have improved the paper markedly. Financial support from the MEXT KAKENHI (18078004, 19530161, 23330065) is gratefully acknowledged.
Publisher Copyright:
© 2012, Springer Japan.
PY - 2014/10/4
Y1 - 2014/10/4
N2 - This paper defines a sustainable development path as a balanced growth path with environmental conservation. In the framework of endogenous growth theory, it is known that a sustainable development path is optimal only if the following three conditions are satisfied: (1) the engine of economic growth is clean; (2) the assimilation capacity of the environment is high enough to endure the increasing environmental load with economic growth; and (3) the population has an egalitarian propensity with the elasticity of the marginal utility of consumption that is greater than or equal to one. While all of these three conditions are intuitively plausible, there are distinctions between the first two and the last one: the former can be obtained by our endeavors, whereas the latter concerns preference that is endowed rather than obtained. We show that this preference constraint can be relaxed if the production technology satisfies the condition that the elasticity of transformation to the production factor and the environmental service, after appropriate monotone transformation, is greater than one.
AB - This paper defines a sustainable development path as a balanced growth path with environmental conservation. In the framework of endogenous growth theory, it is known that a sustainable development path is optimal only if the following three conditions are satisfied: (1) the engine of economic growth is clean; (2) the assimilation capacity of the environment is high enough to endure the increasing environmental load with economic growth; and (3) the population has an egalitarian propensity with the elasticity of the marginal utility of consumption that is greater than or equal to one. While all of these three conditions are intuitively plausible, there are distinctions between the first two and the last one: the former can be obtained by our endeavors, whereas the latter concerns preference that is endowed rather than obtained. We show that this preference constraint can be relaxed if the production technology satisfies the condition that the elasticity of transformation to the production factor and the environmental service, after appropriate monotone transformation, is greater than one.
KW - Elasticity of the marginal utility
KW - Elasticity of transformation
KW - Endogenous growth model
KW - Sustainable development path
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U2 - 10.1007/s10018-012-0053-3
DO - 10.1007/s10018-012-0053-3
M3 - Article
AN - SCOPUS:84908548366
SN - 1432-847X
VL - 16
SP - 343
EP - 357
JO - Environmental Economics and Policy Studies
JF - Environmental Economics and Policy Studies
IS - 4
ER -
