Lecture 4 - Strong & Weak Sustainability

Question 1

What is the Brundtland Report’s definition of sustainable development?

Answer 1

Answer: Development that meets present needs without compromising future generations’ ability to meet their needs.

Question 2

What are the main components of the bequest package?

Answer 2

Answer: Man-made elements (stocks, machinery, cultural heritage, scientific knowledge, institutions), natural elements (soil, ecosystems, landscapes, resources, air, water) and waste.

Question 3

Explain Hartwick’s Rule.

Answer 3

Answer: It states that profits from non-renewable resource extraction should be reinvested into building capital stock, which will result in a constant stream of consumption over time.

Economic model for sustainable use of non-renewable resources

suffices Rawls’ saving principle → investment = saving

links the opportunity-oriented approaches (preservation of capital) to consequentialistic approaches (preservation of consumption)

Assumes substitutability between resources and capital → this can be an issue

Question 4

What is the key difference between weak and strong sustainability?

Answer 4

Answer: Weak sustainability allows substitution between natural and man-made capital, while strong sustainability requires maintaining both types of capital separately with no substitutability.

Question 5

What are the main arguments supporting strong sustainability?

Answer 5

Answer:
- Nature is essential for life and natural inputs cannot be reduced to marginality
- Natural capital serves multiple functions (in contrast to man-made capital)
- The precautionary principle supports this approach

Question 6

What is the difference between comparative and absolute sustainability standards?

Answer 6

Answer: Comparative standards focus on ensuring future generations have equal or better chances than the current generation (non-declining consumption), while absolute standards ensure minimum subsistence conditions and means for all at all times and in all places.

Question 7

When is the bequest fair for our future generations?

Answer 7

the bequest is fair if the stock is sustained → if you use it, you have to help replenish it

Question 8

What are the 2 economic approaches to sustainability?

Answer 8

• depends on preservation of consumption - consequentialistic, OR
• preserving resources & capital - opportunity-oriented

Question 9

What is capital?

Answer 9

• Capital goods are man-made, durable production factors
• They provide services over time and require maintenance
• Examples: machines, tools, infrastructure, computers, software
• Borderline cases include human capital and natural capital
• Distinguished from financial capital (money)

Question 10

How does capital change over time?

Answer 10

• Capital changes over time based on:
  
  • Current capital stock
  • Investments
  • Rate of wear/depreciation

Question 11

Equation for next period capital.

Answer 11

capital (next period) = capital (now) + investments - wear

Question 12

What is natural capital and what does weak and strong sustainability say about it?

Answer 12

• all the renewable and non-renewable resources
• weak sustainability states natural capital can be substituted by man-made capital
• strong sustainability states natural capital CANNOT be substituted by man-made capital

Question 13

What is weak sustainability? How does it calculate total capital?

Answer 13

• Focuses on maintaining total capital stock
• Allows substitution between natural and man-made capital
• Total capital = man-made + natural (+ human + social capital)

Question 14

Example of Comparative Standard.

Answer 14

Example: Brundtland Report approach

Question 15

Examples of Absolute Standard

Answer 15

• Examples:
  
  • Safe minimum standard
  • Planetary boundaries
  • UN Sustainable Development Goals