Optimality or Sustainability?

25 Pages Posted: 8 Aug 2001

See all articles by Geoffrey M. Heal

Geoffrey M. Heal

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: June 2001

Abstract

Does the present concern about sustainability raise fundamentally new issues for economics, or is it dealing with problems already on our agenda? There are two points that are central to sustainability: a concern for what happens in the long-run, and a respect for the constraints that the natural world places on the dynamics of human societies and the well-being of their members. Concern for the long-run has a long and distinguished history in economics, going back to Sidgwick, Ramsey, Koopmans and others. We have not resolved these issues fully, but they are not new. Concern for the ecological limitations on society is a matter of specifying properly the constraints under which society operates. This does not raise fundamentally novel issues, although the precise specification of these constraints, which could involve non-convexities and hysteresis, could be challenging. Here I explore optimal growth paths for economies with various specifications of the objectives and constraints, and ask whether optimal paths are sustainable in a loose and intuitive sense. The answer is frequently affirmative. I argue that in fact most optimal paths are sustainable, using the terms optimal and sustainable in ways that command general assent.

Keywords: optimal growth, sustainability, sustainable development, ecological constraints, environment

JEL Classification: Q01, Q30, H00, O00

Suggested Citation

Heal, Geoffrey M., Optimality or Sustainability? (June 2001). Available at SSRN: https://ssrn.com/abstract=279102 or http://dx.doi.org/10.2139/ssrn.279102

Geoffrey M. Heal (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States
212-854-6459 (Phone)
212-316-9219 (Fax)

HOME PAGE: http://www.gsb.columbia.edu/faculty/gheal/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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