ECON 255: Next week (comment on the Solow Paper)
On Tuesday, we will develop several models for analyzing the link between Economic Growth and the Environment - (no reading assignment).
Then we will move to "Valuing the Environment" - http://jollygreengeneral.typepad.com/files/chapter-4-p.-92---128.pdf
Thursday, let's back up and discuss the Solow Paper - http://cda.mrs.umn.edu/~kildegac/Courses/Enviro/3008/Readings/Solow.pdf
after we finish learning about non-market valuation.
Then we will move to "Valuing the Environment" - http://jollygreengeneral.typepad.com/files/chapter-4-p.-92---128.pdf
Thursday, let's back up and discuss the Solow Paper - http://cda.mrs.umn.edu/~kildegac/Courses/Enviro/3008/Readings/Solow.pdf
after we finish learning about non-market valuation.
One quote in the Solow paper that I felt was particularly interesting was when he comments that "sustainability is about distributional equity." This comment underscores much of his first part of the paper where he argues against the conventional interpretation of sustainability. His argument about the fungibility of goods also makes sense to me, and his point that we shouldn't feel guilty about the exhaustion of a resource, if there is another, substitutable, resource that can easily take its place. Before this reading, I definitely interpreted the idea of sustainability as the idea that you should use as little as possible and essentially leave the earth in the same state you found it. His perspective that this idea is almost impossible, but definitely impractical was really interesting. I also really liked his point on the investment of rents generated from non-renewable resources and the case of Scandinavian countries and the importance of this for future sustainability.
ReplyDeleteRight off the bat, Solow points out the flimsy concept of sustainability that people throw around when they want to sound environmentally conscious. Since the 80s when he gave this speech, this notion of 'sustainability' has become one of the most distinguishably obnoxious buzzwords that many use but few actually understand. Food, bath products, clothes, and many other items we purchase today bear the label of 'sustainable,' and consumers automatically associate these products with environmentally conscious practices, and are often willing to pay a premium. Unlike the 'organic' label for food, there is no legitimate body that can certify a product as sustainable or unsustainable. A coal company could label coal from a mountaintop removal site as sustainably sourced if it wanted to. This paper does a great job distinguishing environmental issues from sustainability issues, and I think it provides a great lens through which we can continue to think about natural resources and the environment.
ReplyDeleteI appreciated Solow’s discussion of the paradox between sustainability for the future and consumption for the present, but I think some of his conclusions there don’t quite hold. I do not think that sustainability and poverty alleviation are mutually exclusive as he suggests when he writes that people who are concerned about sustainability issues “do not seem terribly concerned about the welfare of the poor today.” Sure, in order to provide for the poor, we may need to provide some higher level of consumption, but Solow does not talk at all about the incredible amount of food waste and excess off of which people exist today. We do not have to undergo massive construction projects to house the thousands of homeless people in our country. Even in his poignant conversation about population control, he discusses a long-term solution to poverty without any sort of nuance. Do people in Third World countries have children “as insurance policies for their own age”? Or, as is more likely the case, do we need to invest in educational initiatives (which do not take up any non-renewable resources) for young women in third world countries to start easing the rapid population growth of the world? I appreciate that this paper came out in 1991, but I found it disheartening that Solow created a zero-sum-game between helping impoverished people today and helping our “great grandchildren.”
ReplyDeleteI don't agree with Solow's idea that it is morally problematic to worry about the welfare of the people who are yet to be born while so many are currently suffering from severe poverty. I think that Mason is right in that "sustainability and poverty alleviation are not mutually exclusive". In fact, there are many ways of alleviating poverty that are sustainable. Solow argues that today's poor want consumption and not investment but I personally do not think that that is necessarily the case. Providing higher levels of consumption is only a short term solution for fighting poverty. Investment is by far a better and more efficient way of alleviating poverty in the long run. Such investment can come in the form of infrastructure, knowledge, etc and will generate benefits to the society as a whole with little or no cost. I also think that Solow exaggerated the paradox of distributional equity by making it seem as if intergenerational and intra-generational equity cannot both be achieved at the same time.
DeleteI did not interpret Solow's comments on this paradox as him claiming that sustainability and poverty alleviation are mutually exclusive. Rather, it seems that he is simply pointing out a roadblock that prevents a lot of us from 100% buying into the concept of sustainability and thus from prioritizing the need to make current decisions that take into account the well-being of future generations. Some people view welfare from a short run perspective- politicians come to mind. Our grandchildren will not be voting in the midterms this November, and thus, it becomes more beneficial for politicians to focus on more current, tangible problems facing Americans such as jobs, poverty, and health care. Although I do not necessarily agree that every person concerned about sustainability carries with him a sense of "callousness about the state of the world today," I think Solow brings up a good point. We currently face a huge challenge in the US- how can we resolve this paradox and reach an agreement on how much to prioritize current well-being vs. future well-being?
DeleteI agree most closely with Laura here. I don't think he is necessarily totally embracing the paradox as an undeniable truth, but rather when people use the ambiguous term of sustainability they may not be aware of the paradox. I understand Zainab's point about how investment is more important than consumption in terms of helping end poverty, and I completely agree. However, we can't think that simply because that being true doesn't solve the paradox. You can't tell a poor family that everything will be better in five years because we're now focused investment when that family is starving right now. It is a matter of distributional equity, and while it likely isn't as mutually exclusive as he may have made it sound, it is something that needs to play a large role in the conversation of "sustainability."
DeleteI would also like to add on to Zainab's point on morality. He mentions that we cannot be morally obligated to do something that we physically cannot do (his example was flying around like Peter Pan). Though I do recognize that putting an exact definition on sustainability and stating that we have to save/ leave all resources on the earth for future generations is problematic and a little non-sensical, I would add that lacking the obligation to do that doesn't mean we lack all and every kind of obligation. He does adjust the vague definition of sustainability, which I appreciate. I thought his point that as long as we provide substitutes, it is perfectly fine to use up resources was very interesting, and although I liked the basis of it, I found some parts to be problematic. Right before he states his point, he says that "sustainability doesn't require any particular species of owl or any particular species of fish or any particular tract of forest to be preserved." I would argue that those things are difficult to find substitutions for, and that this is where sciences such as biology and ecology come into play. Who's to say that we actually DO need to preserve a certain tract of forest because it is essential to an important ecosystem? Krutilla talked about the need to preserve certain amounts of land in certain places for scientific advancement, medical advancements, etc. I think this is important to consider in regards to sustainability (as well as the ability of a resource to be substitutable).
DeleteOne of the central themes of this article was the value and importance of substitutes. The idea that we will rely on the same resources a hundred years from now that we do today is illogical. As Professor Casey mentioned in class, whale oil was one of the main methods of illumination
ReplyDeleteas late as the 19th century. Indeed, whale population decline was a major concern during this time. Today, we have fuels that are magnitudes cheaper and more efficient. Therefore, as Solow stated, the goal of sustainability should not be to preserve all the natural resources we currently use, but to insure that there are sufficient substitutes. However, the difficulty is that we do not know what substitutes will one day be discovered. People in the 1700s had no idea that one day oil fields would be discovered underground that would render whale oil obsolete. Additionally, some resources such as air quality or the rain forest have no or few substitutes. Coal and oil on the other hand have more readily available substitutes. As a result, in our cost - benefit analysis we must take into account the projected availability of substitutes for the resources we are considering.
Solow's discussion of keeping the world a place where the future can be as "well off" as we are today reminded me a lot of a class discussion from my Business Management and Organizational Behavior course last week about the Status Quo Bias. This is how we tend to believe the future will be like today. We understand the development of technologies in the past to be an increasing trend, but we have a hard time projecting out to imagine the future. The future is so unpredictable to us because the pace of change is exponential. Slow suggests imagining people in the future to be similar to who we are today, but this just falls in line with the status quo bias. He is right though, that we cannot predict exactly what will be prioritized by society in the future. Do we need to preserve our sources of petroleum so that they can use it as obsessively as we do today? Or do we need to preserve something that we aren't currently utilizing because that will be the power of the future? All we can really know now is that it is important to share well-being with the people of the present and the future.
ReplyDeleteI found some of Solow's arguments concerning. I do agree with many of his points, such as the definition of sustainability as vague and immeasurable, the concept of subsititutes to explain why inputs should not be the focus of the problem but the capacity to produce output instead, etc. It is evident that the key goal of sustainability is for the future generations to be as well off as we are. However, I disagree with two of his arguments. First, we do not have to choose between helping the poor today or the people in the future, or at least not as extremist as he makes it sound. It is evident that inequality is an issue today, and that should also be addressed, but that does not mean that we shouldnt care about the future generations. We should and we can address both problems. I also find his example of going to the past flawed. It is obvious that a hundred years ago the level of pollution was significantly lower than today, but that is not because they were thinking about us, but because they did not have the technology or resources to produce more. The market was determining their production back then, and there were definitely not negative externalities as big as today's level of production. But today's issue is different; the negative externalities are significant, and we have data that proves it.
ReplyDeleteWhile there are some interesting points in this speech, I disagreed with many of Solow's comments and found him contradicting himself frequently. He says, we have "an obligation to conduct ourselves so that we leave the future the option of the capacity to be as well off as we are," which suggests we should be thoughtful about conserving the resources we use to ensure we do not exhaust them for future generations. However, he then says that, "resources are, to use a favorite word of economists, fungible in a certain sense they can take the place of each other. That is extremely important because it suggests that we do not owe to the future any particular thing. There is no specific object that the goal of sustainability, the obligation of sustainability, requires us to leave untouched." What, then, would be the point of conserving resources if everything has a substitute? Additionally, he indirectly furthers the argument against conservation because "we don’t know what they (the people of the future) will do, what they will like, what they will want. And to be honest, its none of our business." If the future generations can make do with perfect substitutes and will potentially have these tastes and preferences that are completely different and "none of our business," why on earth would we be so concerned with them? Additionally, I disagree with his argument for the paradox between poverty today and sustainability. Promoting equity doesn’t necessarily mean increasing overall consumption. It could be a redistribution, which would be in line with sustainability. I also thought his comment about population growth at the end was extremely abrupt and so incomplete that he should have just left it out.
ReplyDeleteOn page 1004 when Solow talks about how the future is not adequately represented in the market, it reminded me of our discussion on Tuesday about the relationship between GDP and pollution. Looking back to industrial revolutions, the future clearly is not though about until after pollution becomes a major issue to human health. Would it be possible to regulate emissions and pollution in countries with low GDP’s as they move towards more industrial economies to ensure that they do not reach a state of maximized pollution before realizing what they have done? Mankind has been known to “free-ride on the future.” Is it possible to maximize a country’s GDP while keeping emissions and pollution levels at a minimum level without reaching the point where pollution becomes a problem? Historically as GDP increases, pollution increases to an all time high. Then with the further increase in GDP, pollution levels begin to drop again. My question is that is there a sustainable way to increase a nation’s GDP or is this pollution curve inevitable?
ReplyDeleteIt did not come to my attention how vague the term sustainability actually is until this excerpt. You should attempt to ensure what you can, but its humanly impossible to predict the future. We are unable to assume which technologies the future will or will not develop. It becomes a problem when we realize we can profit now and the future will bear the cost. I like his point that he makes where he says we’re essentially free-riding on the future. Current environmental measures will only aid sustainability if we bear the cost today in hopes of helping the future, yet there is no correct way about doing so. The future is so unpredictable that we must take as many measures today to be as “sustainable” as possible.
ReplyDeleteThe most thought provoking part of this speech for me was in regard to Solow's discussion on substitutes. Though the author acknowledges the inability to know our successor's tastes and preferences, or technological capability, I interpreted his note on substitutes as him advocating for the justification of exhausting a resources as long as there is a feasible substitute. The main point that I think the speech overlooks is the concept of what perspective we use to analyze resources and deem them as substitutes. For example, the author uses the example that if we extinct one species of fish we can simply start consuming another. In taking the perspective of human beings, this is perfectly logical, for the purpose fish are to humans, a source of food, one fish is a perfect substitute for another. However, if you take a different perspective, these two species of fish might not be perfect substitutes. For example, to the environment, or per say more specifically, the food chain, the substituted species of fish might not serve the same role as the extinct species and therefore are not substitutes to the environment as they are to humans.
ReplyDeleteSolow made a lot of great points about the vagueness and complexity of the sustainability issue in the world today, particularly when he discussed the trade-offs between thinking about the well-being of those in the future and the well-being of people in the present. Helping the impoverished of the present and conserving for future generations are not necessarily mutually exclusive goals, but Solow does a great analysis of the paradox in trying to choose one over the other. Obviously helping those that need it today will take away from some portion of future consumption, but I think that is necessary. Just as Solow said at the beginning of his talk, we have to be realistic with ourselves when it comes to sustainability, so if we have to forego some consumption in the future to give someone a better life today, I believe it is the right way to use the resources we have been given.
ReplyDeleteSolow emphasizes the importance of investment because when done right it can be beneficial to future people. He argues that changes to the natural environmental, such as the construction of a hospital can be viewed as more sustainable than preserving the land because it is providing many future benefits. In regards to his discussion of the paradox between inter-generational and intra-generational equity, I agree that the two objectives can occasionally be at odds. His example of China and other countries following the same fossil-fuel backed development strategy as Western nations is evident of the paradox. I would argue that Solow acknowledges the existence of a paradox but also respects the possibility of a development strategy that addresses both needs (and after over 25 years, there has been progress through initiatives such as UN SDGs, but I would argue that both objectives are still in conflict at times today). I think he really was criticizing some in the environmental community at this time who may have been arguing for zero economic growth, or those who failed to incorporate the existence of large inequalities we see today (i.e. liberal elites, ivory tower complex).
ReplyDeleteWhat struck me the most in this article is the how Solow characterizes investment vs. consumption in various capacity. He points out that investment is great for sustainability in the long run and thus better for future generations but that investment comes at the cost of consumption which is what the less well off of the present desire. Balancing this trade off becomes a moral problem as much as an economic problem as he mentions “the far future is not accurately represented in the market” meaning that interreference and or spending discipline is necessary to determine and maintain the optimal balance. The mechanisms through which the saving/investment decision should be made are left largely untouched by Solow except for a brief mention of government involvement. I found Solow’s discussion to be both insightful in his way that he thinks about sustainability in a term series format but also discouraging due to the lack of resolutions or proposals put forward by him. His point about accounting for the rents of non-renewable resources in the North Sea example is interesting and an example of how to better MEASURE parts of the consumption/investment decision but was light on how to think about properly investing those rents received. Possibly some class discussion could expand his thinking on this topic. Finally, I wanted to call attention to a particular quote I found striking and summarized his thoughts on sustainability and investment/consumption: “The way I have put this, and I meant to do so, emphasizes sustainability is about distributional equity. It is about who gets what. It is about the sharing of well-being between present people and future people.”
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ReplyDeletePrior to reading Solow’s piece I had never truly considered the implications of my definition of sustainability. My original take on sustainability was similar to what Solow mentioned, in that I too thought that ultimate sustainability meant saving and using as little non-renewable resources as possible. However upon reading Solow’s article my opinion has shifted from the environmental take that I originally had towards the economic take (if I may call it that). Solow’s definition truly resonated with me. Solow believes that sustainability lends itself to our obligation of providing future generations the option to be as well off as we are. The word “option” immediately popped out at me when I read this definition. My mind automatically made the connection between this option provided by sustainability and the option market that Krutilla's Conservation reconsidered discussed. I found it fitting to have read Solow’s article after Krutilla because it enabled me to better grasp the “options” that we would need to leave future generations in order for them to be as successful as present generations.
I was not the biggest fan of Solow's opinion as expressed in this essay for a couple of reasons. First, he takes a very cold approach to sustainability. He basically says that he doesn't think various species going extinct or ecosystems dying matters very much so long as there's a general substitute so that the future generation can have access to similar resources. That type of argument makes it seem as though every plant and animal exist for no other purpose than our use, which is a position I cannot support. Further he undermines his whole argument about the definition of sustainability by admitting that we have no idea what kind of resources the future generation will value so how could we possible make decisions now with the criteria for sustainability he establishes in mind. Finally, it makes no sense to me that he could admit that the biggest issue for sustainability is population growth and then just go 'but nah I don't want to deal with that'. If he's going to be heartless enough to express the opinion that mass extinction of species doesn't matter at all so long as human welfare isn't impacted, I would think he would have the courage to address a less morally questionable topic such as population control. Overall, I think this is the kind of essay that contributes to the opinion that economists only care about efficiency with total disregard for any sort of moral compass.
ReplyDeleteI found Solow's paper interesting but somewhat confusing. To start, I liked his definition of what it means to be sustainable: an obligation to conduct ourselves presently in a way that allows future generations to be as well off as we presently are. However, I'm unsure of what Solow means when he argues that it's OK to leave substitutes/stand-ins for current resources. It seems like Solow is saying that we have the means to find substitutes for both natural resources AND environmental resources. Beyond the fact that environmental resources generally have non-market prices, how would we go about approximating what future generations need? Solow makes the point that in 1880 people could not have possibly known what to save for people living in 1980 - would they have tried to save the input materials needed for horse carriages? Is it OK for us in 2018 to justify using all the oil in the world as long as we take the rents and plunge them into research on cold fusion technology? It seems a little crazy to make use of all of one resource or extinct all of one species and plow the rest into environmental investment.
ReplyDeleteWhile reading this essay, one thing that repeatedly caught my attention was how realistic Solow was in his approach to sustainability. From the beginning he stated how difficult it is to grasp the concept and how “the less one thinks about it, the better it sounds,” which I found very interesting and honest on Solow's part. His realistic approach to moral obligation and how we should think about it was also very thought provoking and was something that I did not expect to read in an environmental economics paper. Perhaps the most thought provoking aspect of the paper in my opinion is the paradox he presented and how it related to his view of how we must act with the future in mind. It left me curious about the best way American policy makers can act about the poor wanting consumption and not investment and what the best middle ground is to be mindful of the rest of the world while being mindful of not only American’s futures, but a global future.
ReplyDeleteThroughout the piece Solow encourages thoughtfulness, knowledge, democracy and the acceptance of the unknown. This humble approach to economic and social policy is admirable. I also admire that Solow tries to eliminate the buzzword-effect of sustainability, and see it for what it is: complex. We've come a long way from the traditional understanding that sustainability applies uniquely to the quality and quantity of water, soil and air. It has come to carry weight in a variety of disciplines and areas of life. This is evident in W&L generous use of sustainability and effort to apply the concept in many departments on campus (admissions, education...) This should be a relief since the previous way of thinking about sustainability sets us up for failure. It's impossible to not waste and contaminate to some degree.
ReplyDeleteI feel uncomfortable by Solow's suggestion that humans have a right to use up one resource (ex: aluminum) as long as we provide and invest in a substitute. Technology could prove aluminum to be an enormously essential component in the production in future advances. We just don't know. Solow suggests that any abuse of natural resources can be justified if future well-being can be guaranteed via another. It's an especially uncomfortable thought that the value of one species can be deemed replaceable - especially considering new biological discoveries are happening every day. I don't know if I can ideologically get on board with rentals as anything but a last resort. What seems more perpetual is sustainability in the form of better technology to reduce the amount of materials needed to produce goods and serves, re-using, and renewable resources. Another criticism is that Solow only briefly touches on consumption, stating it is a problem of the poor and it is they who battle the issue of investing versus consumption. This isn't fair since the biggest consumers are developed countries and Solow does not suggest they adjust their lifestyles, just plan for and invest in alternatives when they use up one resource.
I was most interested by Solow’s idea that sustainability isn’t about preserving the environment, but is about providing substitutes for resources today so that future generations can achieve an equal, if not better level of consumption. Solow explains that sustainability has nothing to do with preserving a landscape or protecting species of animals; he claims that these are amenities and that ultimately, there are substitutes. I’m not entirely sure that I agree with Solow. In theory, we could consume and consume as long as we find substitutes for these resources, but at some point I think we would no longer be able to recreate or find a substitute for the natural resources that we have exhausted. For example, if consume species of fish after species of fish, jumping to the next after the previous goes extinct, we will eventually run out of fish. Maybe by that point we will have created an artificial substitute for meat, but I doubt that’s a substitute that we really desire. I think Solow’s idea can be applied to sources of energy like oil & gas, but other environmental resources like scenic views, large tracts of forest, and species of animals cannot be recreated. Sustainability itself may not encompass the preservation of these scenic views and species; however, I think their preservation is still of great importance.
ReplyDeleteThis talk by Solow reminded me of the concepts of weak and strong sustainability. Solow seems to espouse the notion of weak sustainability, which assumes human capital and natural capital are substitutable to a high degree. Strong sustainability doesn’t regard the two types of capital as highly interchangeable. This viewpoint from weak sustainability can be problematic and relates to the section on page 182 that states, “There is no reason for our society to feel guilty about using up aluminum as long as we leave behind a capacity to perform the same or analogous functions using other kinds of materials”. I find his argument overly reliant on and optimistic about the potential for people to develop alternatives. Also, it appears he is assuming there will be an endless potential for substitutes. But what if we haven’t developed an alternative capacity yet? Should we stop using for example, aluminum now, or should we gradually phase out our use over a time period? Solow’s argument could be improved if he had expanded on this issue.
ReplyDeleteI am commenting on "Conservation Reconsidered" because I already posted on Solow last week. I thought Krutilla's argument was sound and reasonable, and I was particularly supportive of his points about the extreme lack of knowledge regarding the full and true option value of the earth's natural resources and environmental services. There is no smart way to go about replacing a natural resource with a technologically derived substitute until the full value of that resource is understood. At this point in our scientific knowledge, we are not yet ready to make such decisions. I honestly am not sure we will actually ever reach a point in our degree of natural scientific understanding where we could honestly and justifiably decide that it would be acceptable to completely and intentionally deplete a natural resource. To assume that humans can literally know everything there is to know about the value of the earths resources, to me, is to overestimate our abilities. Isn't there always something to be learned?
ReplyDeleteJohn Bozeman's post^^
DeleteSolow's speech compelled me to think about a number of interesting things, but I thought the paradox he touched on was particularly thought-provoking. It seems to me that it's a fairly big problem for advocates of sustainability, and perhaps the biggest aside from the population growth aspect. Forgoing consumption for the world's poor today, in order that future generations might be equally well off, seems pretty inequitable. Which I suppose is my one problem with Solow's speech and, more generally, the whole notion of sustainability; who exactly are we talking about when we talk about the wellbeing of future generations? As Solow points out, there are a whole lot of people being shortchanged today, but I don't think he spends enough time talking about that. He suggests implementing more comprehensive accounting of the rents from non-renewable resources, which is great, but he's still primarily interested in channeling those rents into investment and saving. The problem is that the poorest people in the world are not interested in investment and saving; they are interested in their own wellbeing today, tomorrow, and the day after that. So who exactly are we reserving future welfare for? The future generations of people that are already well off now? I think intra-generational inequities are equally if not more important to address now than potential inter-generational inequities, and that seems to be a pretty big problem for sustainability measures.
ReplyDeleteI was slightly taken aback by Solow's confidence in technological advancement. As some of my fellow bloggers have pointed out, Solow seems to confidently justify the exhaustion of a given resource with investment in development of substitutes to replace the exhausted resource. He also points out that we don't know anything about the tastes and preferences of future generations and should then assume that they are similar to those of the present generation. These two points appear contradictory especially in the context of environmental resources. Take for instance, the ph of the worlds oceans, an example mentioned in class on numerous occasions. If we as humans continue to operate in a way that increases the ph of the worlds oceans, are we sure that the benefits will provide for enough investment to substitute for the resources lost? I'm not sure that we should be at all confident that we can remedy the loss of sea life associated with the rise in ph without massive investment. Perhaps my understanding of Solow's argument is flawed and will be enlightened by class tomorrow.
ReplyDeleteWhile I agree with Solow that major population growth is a “Third World Phenomenon,” I still think population growth in developed countries matters. I directly thought to our individual “carbon footprints,” and how your average American’s footprint is magnitudes greater than that of a third world inhabitant. Accordingly, it can be argued that lower population growth in developed countries impacts sustainability issues just as much as higher population growth in developing countries. I found the discussion of sustainability as a distributional equity to be just as interesting. Investment is an aspect of that distributional equity in being protection for the environment, but who is driving the demand for that investment? Future generations have no say how the allocators of today decide. This argument helped clarify how present day markets do not account for negative externalities associated with a production, which eventually requires effort on the government’s part. Government likely runs into the similar paradox of helping those today, or those for the future. Both are important, but there is higher weighted value on constituents with the power to elect than those who cannot, so investment in protection for the future decreases.
ReplyDeleteSolow appears to be taking the proposed definitions of sustainability too literally. He takes issue with statements made by UNESCO and the UN about leaving resources the way they are today for future generations. However, I think the intent behind these statements are more general rather than specific. These organizations wish to promote the notion of preservation of the environment. Specific policy and action should most likely be taken at the country level in agreement with other countries as each country's resource demands and pollution levels are different. He also argues that because we don't know what the future will be like and what demands future inhabitants of the planet may put on it we should "choose policies that will be appropriate over a wide range of possible circumstances as we can imagine". This doesn't seem to be very constructive advice as too broad of a policy will probably have inherent contradictions or be too large to implement successfully. Additionally, he seems to have anecdotal evidence but not very good evidence. When relaying the story of oil in the North Sea he is sure that the British mismanaged it. He then says the Norwegians "went about it in the typical sober way you expect of good Scandinavians " but is ultimately unsure about how they actually manages the resource. He just assumed they did a good job. Solow speaks in far too general of a manner which is ironic given that his argument is against the generality of the term sustainability.
ReplyDeleteI’m interested in the way the methodology of willingness to pay pricing incorporated elements of behavioral economics. Though we often speak of value as an objective variable, the decision-making process plays a substantive role in determining our final willingness to pay, because we often have difficulty obtaining necessary information and weighing the numerous components of value. An example that comes to mind is in the process of software development. Software engineers find that if they offer a given number of features to a client before production, the client will generally opt for more features than necessary, preferring a range of options to the simplicity of necessary options. To avoid this problem, software engineers creating an a minimally viable product (MVP) and add functionality as it is demanded. This process seems analogous to the methodology of revealed preference studies; it’s one thing to tell a surveyor how much you value something, but quite another to put that commitment to action.
ReplyDeleteLike others, I found the article contradicting. He attempts to clear up any misguided ideas about ‘sustainability,’ ultimately building a new framework associated with the word. He immediately clarifies the misguided views of sustainability as wanting to leave the environment exactly as we found it and explains that this idealistic view is ultimately impossible to uphold. When in reality, sustainability merely suggests that we should leave to the future the option of being as well off as we are. To counter this belief he goes to the opposite extreme. Why shouldn’t we exhaust resources if they can be replaced? Why should we preserve our resources if technological advances and substitutes have worked for us thus far? Then he proceeds to talk about investment in our future as a paradox against the well-being for us today. It seems he ultimately argued against the practicality of sustainability.
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