2.Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meets

their own needs (WCED, 1987)The basis of this SD definition both

intergenerational equity and intragenaritonal equity.

The conditions of sustainability

Fundamentaly, how do we compasate the future for damage that our activities to day might cause? The answer is

through the transfer of capital bequest (human, physical, natural capital)

• Weak Sustainability (Transfer of an aggregate capital stock no less than one that exist now), Based on a very strong assumtion, perfect subtitutability between of different forms of capital

• Strong sustainability (The assumsi perfect of subtitutability between of form af capital is not valid to make. The assets are critical natural capital and since they are not easily subtitutability, if at all, the SS rule requires that we protect them.

TEST FOR WEAK SUSTAINABLE DEVELOPMENT

• An economic sustainable if it saves more than depreciation on its human made and natural capital

• Y denotes that the values are expressed as a percentage of GDP

• S/Y taken from WB• Dm/Y taken from UN

System of National Accounts.

• Z ≥ S/Y-Dm/Y-Dn/Y (Z must be greater or equal to zero for sustainability)

Country Gross saving (S/Y)

Depreciation of human made capital Dm/Y

Depreciation of natural capital (Dn/Y)

Sustainability indicator (Z)

Finlad 28 15 2 +11

Germany 26 12 4 +10

Japan 33 14 2 +17

UK 18 12 6? 0?

USA 18 12 4 +2

Save Minimum Standards approach to sustainability

Irreversible system-wide instability effects

Minimal damage reversible effects

Increasing irreversibility of damge and possible ecosytem-wide instability

Damage costs

Market forces, Resouce subtitutions WS

Sustaiability Imperatives:SS

St

Sm

Sm Sde

St

Sde

Sustainable Development: Operational principles

A number of ruler for the sustainable utilization of natural capital stock can now be outlined:

Market and interventions failures to resources pricing and property right should be corrected

Maintenance of the regenerative capacity of renewable natural capital Tecnological changes

RNC should be exploited, but rate equal to the creation of RNC subtitutesThe overall scale of economic activity must be limited so that it remains

within carrying capacity of the remaining natural capital. Given the uncertainties present, a precautionary approach should be adopted with a built-in safety margin