Keywords: sustainable development, axioms, present-future equal treatment, intergenerational equity, green economics, long-run optimisation, present-future dictatorship, green golden rule, Weber-Fechner law, sustainable optimum, sustainability, renewable resources
Sustainable development: equal treatment of the present and the future?
This article provides two axioms that capture the idea of sustainable development, and characterises the welfare criterion that they imply. It presents a formal theory of sustainable development, created by the author (Chichilnisky, 1996a, 1997). The axioms require that neither the present nor the future should play a dictatorial role in society's choices over time. Theorems 1 and 2 show that there exist sustainable preferences which satisfy these axioms and provide a full characterisation. Theorems 3 to 5 study a standard dynamical system representing the growth of a renewable-resource economy, give a 'turnpike' theorem, and exhibit the differences between sustainable optima and the ones according to discounted utilitarianism. (JEL 013)