Howeverthisapproachisarbitrary sustainability

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Unformatted text preview: but also increased use of energy and other resources. Income and environmental Income protection protection Environmental and Environmental human well-being human GNP is a traditional measure of economic well­being of an economy, but it may overestimate economic well­being because it does not consider resource degradation and environmental quality problems. A partial answer is introduced by a new measure. ANNP ANNP GNP DM DN ­= Adjusted net national product. = GNP ­ DM ­ DN. = Gross national product = consumption + saving = Depreciation of physical capital = Depreciation of neutral capital. Environmental and Environmental human well-being continued human The correction of a national product will be greater in countries with a high rate of resource depletion (Mexico, Indonesia) than countries with lower rates of depletion (Costa Rica). Other measures of well­being explicitly introduce measures of environmental and other aspects of quality of life. It is difficult to monetize environmental benefits or quality of life. One approach is to weigh indexes of well­being (life expectancy, air pollution, water quality, population density) by “monetizing” coefficients. However, this approach is arbitrary. Sustainability A key issue is depletion of natural resources (NR). NR can be classified as renewable (fish, forest) or nonrenewable (minerals). A continuous extraction of nonrenewable resources will lead to their depletion in the future. Renewable resources can be sustained if use does not permanently exceed the growth rate. Sustainability continued For many fisheries, wildlife, or forests, excessive extraction leads to reduction of stock and in some cases to extinction. Sustainability is aimed to stabilize resource stocks at a socially desirable level. Many development processes may be fueled by excessive extraction­­sustainable development aims to combine development and long­run survival. It, therefore, leads to restoration policies of depleted resource stocks and thus temporary (or permanent) slowness in growth. It requires monitoring of...
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This note was uploaded on 03/18/2010 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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