1、Chapter 5 Sustainable Development: Defining The Concept 1. Introduction Main contents: Investigate one particular fairness concern- the treatment of future generations. Begin by considering a specific, ethically challenging situation-the allocation of a depletable resource over time. Defining what w
2、e mean by a fair intertemporal allocation. Take this theoretical definition and consider how it can be made operationally measurable. 2. A Two-Period Model According to dynamic efficiency, the objective is to balance present and future uses of this resource by maximizing the present value（现值） of the
3、 net benefits derived from the use of those resources. This implies a particular allocation of the resource across time. 2. A Two-Period Model Assume: We have a fixed supply of a depletable resource to allocate between two periods. Demand is constant in the two periods, the marginal willingness-to-p
4、ay（边际支 付意愿） is given by the formula P=8- 0.4q, and marginal cost（边际成本） is constant at $2 per unit. 2. A Two-Period Model If the total supply were 30 or greater, whats the efficient allocation between two periods? If the available supply is less than 30, suppose it is equal to 20, how do we determine
5、 the efficient allocation? Figure 5.1 2. A Two-Period Model How to find the allocation that maximizes present value? The dynamically efficient allocation of this resource has to satisfy the condition that the present value of the marginal net benefit （边际净收益现值）from the last unit in period 1 equals th
6、e present value of the marginal net benefit in period 2. Figure 5.2 2. A Two-Period Model Any efficient allocation method must take scarcity（稀缺） into account. Intemporal scarcity imposes an opportunity cost （机会成本）that we henceforth refer to as the marginal user cost（边际使用者成本）（边际使用者成本）. The marginal u
7、ser cost is the present value of the forgone opportunities at the margin. Figure 5.3 2. A Two-Period Model An efficient market would have to consider not only the marginal cost of extraction（边际开采成本） for this resource, but the marginal user cost（边 际使用者成本） as well. In the absence of scarcity, P=MC Wit
8、h the scarcity, P=MC+MUC 2. A Two-Period Model Both the size of the marginal user cost （边际 使用者成本）and the allocation of the resource between the two period is affecter by the discount rate（贴现率）（贴现率）. The general conclusion is that higher discount rates tend to skew resource extraction toward the pres
9、ent because they give the future less weight in balancing the relative value of present and future resource use. 3. Defining Intertemporal Fairness The sustainability criterion（可持续（可持续 标准）标准） suggests that, at a minimum, future generations should be left no worse off than current generations. 3. Def
10、ining Intertemporal Fairness Do our institution provide adequate protection for future generations? Are all efficient allocations sustainable （可持续的）? 4. Are Efficient Allocation Fair? In the numerical example we have constructed, it certainly does not appear that particular efficient allocation sati
11、sfies the sustainable criterion because more resources are allocated to the first period than to the second. 4. Are Efficient Allocation Fair? Although dynamic efficient allocations（动态 有效配置） do not automatically satisfy sustainability criteria（可持续标准）, they can be perfectly consistent with sustainabi
12、lity, even in an economy relying heavily on depletable resources because it will always be possible to set aside sufficient net benefits accrued in the first period for those in the second period, so that those in the second period will be at least as well off as they would have been with any other
13、extraction profile. 5. Applying The Sustainability Criterion One of the difficulties in assessing the fairness of intertemporal（跨时期的） allocations using version of the sustainability criterion is that it is so difficult to apply. 5. Applying The Sustainability Criterion Is it possible to develop a ve
14、rsion of the sustainability criterion that is more operational? Fortunately it is, thanks to what has become known as the “Hartwick Rule.” John Hartwick (1977) demonstrated that a constant level of consumption could be maintained perpetually if all the scarcity rent（稀缺租） were invested in capital. 5.
15、 Applying The Sustainability Criterion Two important insights flow from Hartwicks reinterpretation of the sustainability criterion. First, with this version it is possible to judge the sustainability（可持续性） of an allocation by examining whether or not the value of the total capital stock（总资本储备） is no
16、ndeclining. Second, this analysis suggests the specific degree of sharing that would be necessary to produce a sustainable outcome, namely all scarcity rent （稀缺租）must be invested. 5. Applying The Sustainability Criterion How do we apply Hartwick Rule to environment? In general, the Hartwick Rule sug
17、gests that the current generation has been given an endowment（资源禀赋）. Sustainable use of this endowment implies that we should keep the principal (the value of the endowment ) intact and live off only the flow of services provided. 5. Applying The Sustainability Criterion Weak sustainability（弱可持续性）（弱
18、可持续性） means that resource use by previous generations should not exceed a level that would prevent subsequent generations from achieving a level of well-being at least as great. One of the implications of this definition is that the value of the capital stock (natural plus physical capital ) should
19、not decline. 5. Applying The Sustainability Criterion Strong sustainability （强可持续性）（强可持续性） means that the value of the remaining stock of natural capital （自然资本）should not decrease. This definition places special emphasis on preserving natural capital under the assumption that natural and physical ca
20、pital offer limited substitution possibilities. 5. Applying The Sustainability Criterion Environmental sustainability（环境的可（环境的可 持续性）持续性） means that the physical flows of individual resources should be maintained, not merely the value of the aggregate. 6. Implications For Environmental Policy In orde
21、r to be useful guides to policy, our sustainability and efficiency criteria must be neither synonymous nor incompatible. Do these criteria meet that test? They do. Objectives & Requirements Grasp the two-period model Understand the meaning of marginal user cost Understand the impacts of discount rat
22、e on resource allocation Understand the meaning of sustainability, weak sustainability, strong sustainability and environmental sustainability Understand the relationship between efficient allocation and fairness Discussion Compare two versions of the two-period depletable resource model which diffe
23、r only in the treatment of marginal extraction cost. Assume that in the second version the constant marginal extraction cost is lower in the second period than the first. The constant marginal extraction cost is the same in both periods in the first version and is equal to the marginal extraction co
24、st in the first period of the second version. In a dynamic efficient allocation how would the extraction profile in the second version differ from the first? Would relatively more or less be allocated to the second period in the second version than in the first version? Would the marginal user cost be higher or lower in the second version?
