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The welfare economics of measuring sustainability: a new approach based on social choice theory and systems analysis
Author(s) -
Islam Sardar M. N.,
Clarke Matthew F.
Publication year - 2005
Publication title -
sustainable development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.115
H-Index - 64
eISSN - 1099-1719
pISSN - 0968-0802
DOI - 10.1002/sd.254
Subject(s) - sustainability , gross domestic product , social sustainability , economics , per capita , environmental sustainability index , environmental degradation , public economics , social welfare , sustainable development , natural resource economics , environmental economics , environmental pollution , economic growth , environmental protection , political science , environmental science , ecology , population , demography , sociology , law , biology
Abstract 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.