Strength and Weakness: Two Opposing Paradigms of Sustainability

Author: Neumayer
Translator: Wang Yin Tong
Country: United Kingdom
Publisher:
Publish Date: 2002-01-01
Features: Clearly, my definition of sustainable development does not provide a complete set of social determinants, because it is likely that almost an infinite number of development paths can ensure the ability to provide non-decreasing utility forever. We believe that there must be some decision criteria that can be chosen among different paths, which is expressed in the language of economists as a social welfare function. The utilitarian standard is to maximize the present value (discounted) of a path that does not decrease utility. However, there are still an infinite number of other decision criteria, the most famous of which can be found in any textbook on welfare economics—for example, see the work of Ng (1983). My definition of sustainable development only requires "the ability to ensure the provision of non-decreasing per capita utility, regardless of what additional social determinants may be." However, note that when analyzing weak sustainability throughout the book, I use a utilitarian framework, because utilitarianism is often favored by proponents of weak sustainability (subject to the constraints of sustainability). The situation in Section 2.4 is the same. This section emphasizes the importance of the sustainability assumption in the example of global warming. This is because the analysis focuses on the neoclassical stance toward global climate change, as represented by Nordhaus (1994), which is clearly utilitarian. Weak sustainability and strong sustainability have extremely different assumptions regarding what forms of capital are necessary to provide non-decreasing utility. To highlight this difference and make the analysis in this book possible, I assume a simplified form, where the utility of a representative individual can be fully expressed by the utility function: U = U(C, Z, P) (2.2)
where ?U/?C > 0, ?U/?Z > 0, ?U/?P > 0.
Simplifying further, the weak sustainability perspective holds that to achieve sustainability, it is only necessary to preserve the value of the total capital stock. Looking at the utility function (2.2), it is clear that weak sustainability must assume that the components in the utility function are substitutable. In contrast, strong sustainability requires maintaining natural capital itself. One reason for this additional requirement is that natural capital is considered non-substitutable in providing utility. For more precise information on the difference between weak and strong sustainability, see Section 2.3.
Why is the stock of renewable resources and the cumulative total of pollution included in the utility function rather than the flow of resources and pollution? The reason is that if people prefer environmental quality, it is reasonable to assume that they care about the entire stock and total of renewable resources and pollution directly related to utility, rather than the incremental changes in stock and total. Why are non-renewable resources not included in the utility function? This is because, although non-renewable resources are important for the production of consumer goods, most do not provide direct utility. No one derives direct utility directly from mineral deposits and energy, but they can derive direct utility from renewable resources such as forests and wildlife. For the same reason, capital is not included in the utility function. They do not provide any direct utility, but they are important inputs for the production of consumer goods.
Population growth is an exogenous factor in the analysis. Regardless of the size of the population, sustained development requires the ability to maintain non-decreasing per capita utility. This requirement seems reasonable because the current generation is responsible for population growth. They can reduce population growth or increase the ability to provide utility to meet per capita needs. I acknowledge that treating population growth as an exogenous factor in the analysis is unsatisfactory, but as Solow (1986) said: "A welfare economics of population with population change as an endogenous factor is completely like being lost in a fog." The idea of always maintaining the ability to provide non-decreasing per capita utility is more of a convenience. Even if the universe and humanity may come to an end in infinite time, this end is beyond the understanding of time for humans. It seems reasonable to compare this distant future end to 'forever.' This also facilitates better mathematical treatment. The practical meaning of 'forever' is that if development can only temporarily maintain the ability to provide non-decreasing utility, but leads to a decline in this ability after a certain point in time, then such development cannot be sustainable.
All choices exclude other possible choices, thus generating opportunity costs. Let us first look at the costs of protecting the remaining biodiversity on Earth. One thing to note is that due to the complexity of protecting ecosystem elasticity, the costs of protection may be high even if direct management costs are high. The 21st Century Agenda estimates that the total global expenditure on biodiversity conservation annually ranges from $8 billion to $80 billion (Panayotou, 1997). While such figures always require caution, they provide some insight into the scale of the costs of biodiversity conservation. The main costs come from direct costs, because ecological protection in a large part of a country's territory hinders economic development. Perlin (1994) worries that protecting current biodiversity may lead to gradual poverty for future generations, especially due to the continued growth of the global population. However, the dilemma of fully protecting biodiversity lies in paying certain, present, and actual costs for uncertain, future, and perhaps intangible benefits. Moreover, actual protectors cannot fully benefit from all potential future gains, because some benefits are externalized to people in other countries, meaning that biodiversity protection has a certain nature of global public property. As a result, there are strong incentives to free-ride on biodiversity protection. Because every possible protector wants to free-ride, none may have enough motivation to engage in biodiversity protection.
Please note that opportunity costs are certain, present, and actual, while the benefits of protection are uncertain, future, and intangible, and this dilemma is not unique to biodiversity protection. It also applies to many other environmental issues, notably the problem of global climate change. There are basically two answers to this dilemma. One is to consciously make decisions on biodiversity protection that involve bearing opportunity costs in order to secure the benefits of safety. This is the precautionary principle introduced by Chiariotti and von Trapp: the establishment of the precautionary principle does not consider costs. Because many of the costs of biodiversity loss are speculative but may be very high; and because we do not know how much biodiversity is needed to maintain basic life support functions, people can decide not to make marginal decisions and choose to protect the overall remaining biodiversity, regardless of the costs of protection. Another justification for fully protecting biodiversity is the assumption that people believe biodiversity is non-substitutable in providing direct utility to future generations. Similarly, in the case of environmental pollution, Spash (1993) assumes that avoiding intergenerational environmental damage is an inviolable right for future generations. This means that the current generation must prohibit all activities that cause long-term damage, regardless of the costs. Costanza (1994) calls for unconditionally protecting the entire stock of natural capital, regardless of the opportunity costs of protection. Although lower stocks of natural capital can be sustainable, considering the consequences of uncertainty and errors in estimation, it is best to temporarily assume that we are at or below the sustainable range and prohibit no further reduction in natural capital. This rule of preserving the entire stock of natural capital can be seen as a cautious precautionary condition for sustainability, which can only be abandoned if there is conclusive evidence to the contrary.
Other possibilities include allowing opportunity costs to influence decisions and explicitly specifying the costs that society is willing to bear for protecting biodiversity and preventing pollution. This is the precautionary minimum standard (SMS), which imposes the condition that costs must not be too high. We will now analyze each of these possibilities, starting with the intentionally disrespectful choice of opportunity costs.
One thing to note is that adopting the extreme stance of having to avoid long-term environmental damage at all costs would lead to huge consequences for how modern society is organized. The energy sector, chemicals, pharmaceuticals, biotechnology, mining, automobile manufacturing, and even the computer and electronics industries—all share a common feature: they produce more or less persistent pollution as byproducts, at least in terms of carbon dioxide emissions. The key point is that, in the long run, environmental policies combined with technological progress can allow modern industrial societies to cause more or less damage to the environment, but it is certainly impossible to maintain current production methods and lifestyles without causing some damage to future generations. The problem with the argument that long-term environmental deterioration must be avoided at all costs is that the countless actions of contemporary people all affect the future, and each action has both beneficial and harmful effects. To claim that any action that causes some harm to future generations is unjust and irreparable is essentially to demand that contemporary people stop all economic activities. Radical environmentalists might welcome such a scenario, but if such a huge opportunity cost is imposed on them, future generations would likely not appreciate it. The same logic applies to the argument that biodiversity must be protected at all costs. It is useful to quote a passage from Beckerman here: Considering that a significant portion of the world's population lives in extreme poverty and environmental degradation, it is difficult to justify spending large resources to protect every one of the millions of existing insect species. Because the spending on such projects could be partly (if not entirely) used for more pressing environmental issues, such as improving health conditions in the developing world and access to clean water. Jacobs (1995) claims that, in practice, we are not faced with many choices, such as protecting some unimportant species versus improving basic healthcare conditions, but at least in principle, these should not be excluded. While we may not want to protect every insect, we are likely to want to protect all tropical rainforests (where the majority of insects live), if we ignore opportunity costs. As a result, many fundamental ethical conflicts will continue to exist. These ethical conflicts are exacerbated by the fact that most of the world's biodiversity is found in some of the poorest countries in the world, with Australia being the exception (Swanson, 1994). Ignoring opportunity costs is equivalent to refusing to resolve this ethical conflict. People can choose to make such a decision, but I believe it is inappropriate to suggest this to a society committed to sustainable development.
Additionally, if the argument that biodiversity is non-substitutable as a direct provider of utility is valid, people can discover extremely high values in protecting biodiversity in value research, even if people accept the view that values are problematic due to uncertainty, ignorance, tipping points, and nonlinear dynamic processes, and even if people allow the possibility that the current generation may value biodiversity less than future generations. However, if the non-substitutability argument is correct and the estimated benefits are very high, why should opportunity costs be ignored and a cost-benefit comparison be avoided?