Theory of Sustainability

"Sustainable Development is development aht meets the needs of the present without compromising the ability of future generations to meet their own needs". 

Implications:

• one neds to know what are the needs of the future generation
• one needs to know the positive and negative effects of our way of life on the ability of the future generation to meet their own needs
• a comparative standard between today's and future needs wherein both needs should be equally met
• since we do not know the long-term effects of our decisions, we can ask the question: what would be a fair bequest for our subsequent generation? 

"The rental object is to be handled with care and returned in good condition" (Kaus Stäck, 1983)

i.e., the "fair bequest" consists of a well-composed package of goods and useful things, such that the future generations have also the possibility to live a fulfilling life. 

1) Material achievements: the stocks we have produced and our means to produce them (machines/tools). Capital stock includes human stock (the knowhow of running machinery to produce agriculture). Also industry (commercial + private sector). 

2) Nature that we influence and rely upon. Includes the soil, ecosystems, landscapes, resources, air to breathe, and water to drink. 

3) Culture - cultural heritage (monuments/artwork/immaterial cultural heritage like music) and the ability to create art and enjoy the arts. 

4) Institutions that rule our social life (traditions and conventions)

5) Unwanted things - waste / ruins / detoriated landscapes / nuclear waste (of course we should leave as little as possible of unwanted things). 

The bequest is fair if the stock is sustainaed, i.e., the stock should not decline over time. 

The main sustainability rule (Hanß von Carlowitz): one should not take from the stock more than what grows back; if the rate of harvest is lower than the growth rate, then the stock/resource is sustained.

Cake-eating model: what has been taken from the resource once, is used up forever. Therefore, it cannot be used sustainably. 

Hartwick's Rule (John Hartwick): if the gains from selling the resource are invested into capital, then the productive capacity of the economy is sustained, and mankind can get a constant streat of consumption. 

Economic Model: 

resources, capital, labour => (production) goods/services => (choice) consumption

needs/preferences => (choice) consumption 

• renders service over time (man-made)
• production factor (are not consumed but used to produce another good)
• needs maintenance and wears of over time

e.g., machines, tools, infrastructure, knowledge and social capacities, natural capital 

Hartwick's rule links opportunity-oriented approaches (preservation of capital) to sustainability with consequentialistic approaches (preservation of consumption).

The issue is that we always need a inimal amount of resource/capital (iso-quant curve of consumption of good). Furthermore, Hartwick's rule applies to cases with no depletion rate and constant population. 

Weak sustainability: YES: insofar as non-declining capital stock (k) 

Strong sustainability: NO: non-declining stock of both, man made and natural capital 

Decisive difference: assumption of substitutability between natural and man-made capital