Sustainability and Development

Posted: 11 Oct 2016

See all articles by Edward B. Barbier

Edward B. Barbier

Colorado State University, Fort Collins - Department of Economics

Date Written: October 2016

Abstract

Sustainable development requires that per capita welfare does not decline over time. The minimum condition is ensuring that any depletion of natural capital is compensated by reproducible and human capital, so that the value of the aggregate stock does not decrease. Meeting this condition is problematic if natural capital includes ecosystems, which not only provide unique goods and services but are also prone to irreversible conversion and abrupt collapse. Net domestic product accounting rules for the depreciation of the total stock of reproducible, human, and natural capital of an economy can be extended to incorporate the direct benefits provided by ecosystems. They also can integrate any capital revaluation that occurs through ecosystem restoration and conversion and the threat of irreversible collapse. These approaches confirm the economic interpretation of sustainability as nondeclining welfare. They can also be used to estimate the changes in the value of ecological capital due to economic activity.

Suggested Citation

Barbier, Edward B., Sustainability and Development (October 2016). Annual Review of Resource Economics, Vol. 8, Issue 1, pp. 261-280, 2016. Available at SSRN: https://ssrn.com/abstract=2850926 or http://dx.doi.org/10.1146/annurev-resource-100815-095227

Edward B. Barbier (Contact Author)

Colorado State University, Fort Collins - Department of Economics ( email )

Fort Collins, CO 80523-1771
United States

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