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The welfare economics of measuring sustainability: a new approach based on social choice theory and systems analysis

journal contribution
posted on 2005-01-01, 00:00 authored by S Islam, Matthew ClarkeMatthew Clarke
This paper presents a new measure of sustainability within a welfare economics framework. Gross domestic product (GDP) can be used as an indicator of sustainability if the GDP estimates are undertaken within a cost-benefit analysis framework based on social choice perspectives. Sustainability is dependent on a healthy and functioning socio-economic and environmental (SEE) system. Economic development can damage the SEE system through resource degradation, over-harvesting and pollution. This paper addresses the tensions between economic development and sustainability by undertaking a number of SEE-based adjustments to GDP based on social choice perspectives in order to measure sustainability. These adjustments include the environmental and social costs caused by economic development such as water pollution, the depletion of non-renewable resources, and deforestation. Thailand is used as a case study for a 25 year period (1975-1999). The results show a divergence in terms of GDP per capita and the SEE-adjusted GDP per capita figure. The paper concludes that, with increasing environmental and social costs of economic development, pursuing such extreme high growth objectives without due environmental and social considerations can threaten present social welfare and future sustainability. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.

History

Journal

Sustainable development

Volume

13

Issue

5

Pagination

282 - 296

Publisher

John Wiley & Sons Ltd

Location

Bradford, West Yorkshire, England

ISSN

0968-0802

eISSN

1099-1719

Language

eng

Notes

Published Online: 2 Jun 2005

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2005, John Wiley & Sons, Ltd and ERP Environment