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REM 363/ENV 399 – Week 12 ASSESSING PROGRESS ON SUSTAINABLE DEVELOPMENT

REM 363/ENV 399 – Week 12 ASSESSING PROGRESS ON SUSTAINABLE DEVELOPMENT. Measuring and implementing Sustainable Development: Is GNP the answer?. How adequate is GNP as a measure of “sustainability”? Why or why not? defensive expenditures residual pollution damages

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REM 363/ENV 399 – Week 12 ASSESSING PROGRESS ON SUSTAINABLE DEVELOPMENT

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  1. REM 363/ENV 399 – Week 12 ASSESSING PROGRESS ON SUSTAINABLE DEVELOPMENT

  2. Measuring and implementing Sustainable Development: Is GNP the answer? How adequate is GNP as a measure of “sustainability”? Why or why not? defensive expenditures residual pollution damages non-market environmental goods & services depletion of natural capital

  3. Alternative 1: Sustainable Income (Green Accounting) Sustainable national income is defined as: “the level of national income that does not reduce the value of assets and therefore productive capacity and can be produced in perpetuity.” From GNP, deduct preventive or defensive expenditures deduct value of residual pollution damage deduct depreciation of manufactured capital deduct depletion of natural capital

  4. Figure 4-1. GDP and NDP as a Measure of Sustainable Income in Indonesia, 1974-84

  5. Alternative 2: Improved Measures of Welfare (non-GNP) Index of Sustainable Economic Welfare (ISEW) developed by Daly and Cobb (1989) or Genuine Progress Indicators (GPI). Pearce-Atkinson Indicator and later extensions (Net Adjusted Savings) that calculate genuine savings by deducting (a) manufactured capital depreciation and (b) natural capital depletion, and other components, from savings in the economy

  6. The Pearce-Atkinson Sustainability Indicator,Selected Sub-Saharan African Countries (% of GDP) Source: Pearce and Atkinson 1995

  7. Source: http://web.worldbank.org. Calculation of Adjusted Net Savings involves deducting (a) depreciation of manufactured capital, (b) depletion of natural resources and (c) residual pollution damages and adding (d) current education expenditures. Adjusted Net Saving in the Six Black Sea Countries, 1996 - 2004

  8. Alternative 3: Physical or Satellite Accounts • Separate physical accounts are prepared for natural and environmental resources, but in physical stock and flow units. • Examples include Norway and France.

  9. Source: Alfsen, Bye, and Lorentsen (1987). Structure of Material Resource (Satellite) Accounts for Norway

  10. Alternative 4: Precautionary Principle & SMS • These approaches to sustainability are related but rather than emphasize new indicators or data, they recognize we may not be able to obtain the information needed to make precise sustainability policy. • One application is the use of the Precautionary Principle, i.e. the notion that in the absence of full information we should go easy and view our reluctance to avoid risks as a kind of insurance premium • Related to this is the Safe Minimum Standard (SMS), which usually refers to steering clear of the risk of extinction of endangered species or ecosystems in the face of uncertainty

  11. Safe Minimum Standard in the presence of a threshold

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