Sustainability with Uncertain Future Preferences

Abstract

A feature of the sustainability problem is that the preferences of future generations are uncertain. In this paper, we put forward a fairness-based definition of sustainability that takes this uncertainty into account. We analyze the implications of this definition in the context of a model of project evaluation. We show that our definition encompasses the concepts of non-declining welfare and of weak and strong sustainability. Furthermore, we show that preference uncertainty has a substantial influence on the implications of sustainability. Copyright Springer 2006intergenerational justice, project evaluation, substitution possibilities, sustainability, uncertainty, Q56, Q20, D81, D63, D99,

Optimal diversity: Increasing returns versus recombinant innovation

“…Young (2001) replaces expected utility maximization by Shackle's (1949) approach, which pays attention to potential surprise and uncertainty-induced demand failures. Krysiak and Krysiak (2006) present an analysis of uncertainty and irreversibility by demanding that an allocation is envy-free, leading to an interpretation of sustainability as an intertemporal distribution in which no future generation prefers to live at an earlier point in history. In addition, sustainability at the level p can be defined as equivalent with future generations with a small probability p being willing to live earlier in time.…”

Sustainability and its relation to efficiency under uncertainty

“…Closer to our framework are studies that analyze sustainability under outcome uncertainty, such as Woodward (2000) and Asheim and Brekke (2002), or preference uncertainty, such as Heal et al (1998), Ayong Le Kama (2001, Ayong Le Kama and Schubert (2004), and Krysiak and Krysiak (2006). Asheim and Brekke (2002) considered outcome uncertainty by introducing stochastic changes to capital and resource stocks into a concept of non-declining welfare.…”

“…Furthermore, neglecting preference uncertainty has facilitated the use of welfare comparisons between present and future individuals. As Krysiak and Krysiak (2006) argued, this becomes impossible if there is substantial uncertainty w.r.t. future preferences.…”

“…For this, we use the riskbased concept of sustainability advanced in Krysiak and Krysiak (2006) as well as a similar risk-based efficiency criterion. We first prove some general characteristics of these concepts.…”

Four Sustainability Paradigms for Environmental Management: A Methodological Analysis and an Empirical Study Based on 30 Italian Industries

“…Note that the specification of U t is uncertain, since future generations could attach a greater value to the environment (i.e., BBU t /BZ envt B ě 0) [47]. Moreover, inter-generational equity may compete with intra-generational equity unless U t includes all current generations [48].…”