A minimum necessary condition for sustainability is the maintenance of the total natural capital stock at or above the current level. While a lower stock of natural capital may be sustainable, society can allow no further decline in natural capital given the large uncertainty and the dire consequences of guessing wrong. This “constancy of total natural capital” rule can thus be seen as a prudent minimum condition for assuring sustainability, to be relaxed only when solid evidence can be offered that it is safe to do so. We discuss methodological issues concerning the degree of substitutability of manufactured for natural capital, quantifying ecosystem services and natural capital, and the role of the discount rate in valuing natural capital. We differentiate the concepts of growth (material increase in size) and development (improvement in organization without size change). Given these definitions, growth cannot the sustainable indefinitely on a finite planet. Development may be sustainable, but even this aspect of change may have some limits. One problem is that current measures of economic well‐being at the macro level (i.e., the Gross National Product) measure mainly growth, or at best conflate growth and development. This urgently requires revision. Finally, we suggest some principles of sustainable development and describe why maintaining natural capital stocks is a prudent and achievable policy for insuring sustainable development. There is disagreement between technological optimists (who see technical progress as eliminating all resource constraints to growth and development) and technological skeptics (who do not see as much scope for this approach and fear irreversible use of resources and damage to natural capital). By maintaining natural capital stocks (preferably by using a natural capital depletion tax), we can satisfy both the skeptics (since resources will be conserved for future generations) and the optimists (since this will raise the price of natural capital depletion and more rapidly induce the technical change they predict).

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Ecological economics and sustainable development, selected essays of Herman Daly/Herman E. Daly. p. cm.-(Advances in ecological economics) Includes bibliographical references and index. 1. Environmental economics. 2. Sustainable development. I. Title. HC79.E5D3242 2007 338.9'27-dc22 2007001391 ISBN 978 1 84720 101 0 (cased)

After deploring the mystification of the term sustainability and tendencies to conflate it with society's desiderata, we desegregate three types of sustainability: social, economic, and environmental. After clarifying these three linked and overlapping concepts, and construing them with sustainable development, we distinguish quantitative throughput growth from qualitative development, and mention intergenerational equity and scarcity of natural capital that together lead to the definition of environmental sustainability by the output/input rule, i.e., keep wastes within assimilative capacities; harvest within regenerative capacities of renewable resources; deplete non‐renewables at the rate at which renewable substitutes are developed. After distinguishing development from sustainability and from growth, the paper describes the concept of natural capital and uses the concept to present four alternative definitions of environmental sustainability. Next, the paper presents criteria for analyzing environmental sustainability and uses the Ehrlich‐Holdren framework in which Population," Pffluence, and Technology are examined separately. The paper then nuances the I = PAT identity and starts to disaggregate the components of sustainability into more dynamic formulations. The final section describes how one large development agency, the World Bank, is endeavoring to incorporate these new principles into its operations.