Environmental economics, strong and very strong sustainability theories, natural capital, ecosystems, resilience

1. THEORIES OF
STRONG AND VERY
STRONG
SUSTAINABILITY
Prof. Prabha Panth,
Osmania University,
Hyderabad

2. Theories of Sustainable development
• Four key concepts of sustainability that are characterized by different
minimum requirements, giving rise to different theories of
sustainable development :
1) very weak sustainability (VWS) is characterized by constant per capita
consumption; this is the usual economic growth model
2) weak sustainability (WS) is characterized by some non-decreasing social
welfare; as given by Hartwick and Solow.
3) strong sustainability (SS) is characterized by constant environmental quality;
of the London school and the Safe Minimum Standards theory,
4) very strong sustainability (VSS) is characterized by a set of stationary-state
conditions; as given by Common and Perrings
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3. Strong Sustainability – concept
• All human life and activity occurs within the limitations of planet
Earth or the 'biosphere'.
1. “Strong sustainability” gives priority to the preservation of
ecological goods, (existence of species) and functioning of ecosystems.
• Eco-centric point of view: species as well as ecological systems which
nurture life, should be sustained for their intrinsic value.
• Natural resources are essential inputs in economic production,
consumption or welfare, and cannot be substituted for by physical or
human capital.
• Some environmental components are unique (oxygen) and some
environmental processes may be irreversible (over relevant time
horizons).
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4. 2. “Very strong” sustainability acknowledges the ‘right-to-life’ of other
species, and requires that every component or subsystem of the
natural environment, every species, and every physical stock be
preserved for present and future generations.
• Focus on ecosystems and environmental assets that are critical in
providing unique and essential services (such as life-support) or
unique and irreplaceable non-use values.
• the ozone layer is an example of the first;
• songbirds or coral reefs might be an example of the second.
A compromise between strong and weak sustainability:
Maintain a minimum amount of certain environmental assets,
assuming that these assets are partly complementary to, and partly
substitutable by economic assets.
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5. Assumptions of Strong Sustainability theories
• Natural goods and systems have a right to exist, they sustain and
nurture life, and so should be passed on from one generation to the
next in their original forms.
• No substitution between KM and KN, they are complementary to each
other, but not substitutes.
• But within KN some level of substitution is possible. E.g. oil for coal.
• Preservation of Renewable Resources,
• Ecocentric approach – based on ecological principles.
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Society
Economy
Environment
1. The Mickey Mouse Model: assumes that
the economy is the main sphere of analysis,
with the environment and society playing
subsidiary roles.
1. The Mickey Mouse Model
2. The Triple Bottom Line Model:
assumes that all three sub spheres
are equally important, and that their
equal interaction produces
sustainable development.
Environment
EconomySociety
Sustainable
development
SUSTAINABILITY MODELS

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Environment
Society
Economy
3. The Strong
Sustainability Model:
The environment
sustains all other life
forms. It
encompasses the
Social and the
Economic spheres.
Without the
environment, neither
Man (society) nor his
economy can exist.
The Environment is
the Set, and Society
and Economy are
sub-sets.
SUSTAINABILITY MODELS

8. Theories of Strong Sustainability
1. The London School: economic development leads to loss of
species.
• Pearce and Atkinson: certain keystone species should be kept
constant to achieve sustainable development.
• No substitution between KN and KM.
• Develop some shadow projects to preserve the keystone species.
Σ𝑖=1
𝑛
Et ≤ Σ𝑗=1
𝑚
Bt for all t = 1, 2, ………………..T
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Where, Et = environmental cost (e.g. habitat loss), i…..n =economic
projects over time
Bt = environmental benefits of shadow projects, and j….m = shadow
projects over time

9. It means that the environmental costs of economic projects (Et) should not
exceed the environmental benefits of shadow projects (Bt) in each time
period.
• For e.g. a dam is built and a forest is submerged, leads to environmental cost Et
• This should be made up by investing in shadow projects to restore or even improve
the environment.
• Invest in reforestation of other areas, ensuring that the same type of ecosystem is
allowed to flourish, creating environmental benefits Bt.
• If the environmental benefits of the shadow projects Bt  the
environmental costs of the economic project Et, then it will lead to
sustainable development.
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10. Limitations:
• Measures environmental costs/benefits in monetary terms. But the contribution
of keystone species cannot be measured with money.
• As the species becomes extinct, will the monetary value remain constant?
• Keeping present stock of capital constant justifies past misuse of the
environmental goods and services, and lesser availability to the less developed
countries.
• Many species have not been recorded.
• Only refers to renewable resources, not non-renewable resources.
• Same type of species may not grow in other areas- geographical factors will be
different.
• If a forest in South India is submerged by a dam, same benefits cannot be
achieved by reforestation in North India.
• However, the concept of preserving and fostering growth of keystone species is important,
through Nature Reserves such as Project Tiger, Project Elephant, and conserving Natural Parks
and fragile ecosystems.
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11. 2. The Safe Minimum Standard Theory (SMS):
• Given by Ciriacy-Wantrup in 1952, and Bishop (1978, 93)
• Decision making under uncertainty, as Society is unsure about the
future.
• The SMS rule is to prevent reductions in the natural capital stock
below the “safe minimum standard” identified for each component of
this stock unless the social opportunity costs of doing so
are unacceptably large.
• KN should not be depleted below a certain Safe Minimum Standard,
to be identified for each species.
KN ≤ SMS
Or, the depletion of natural capital KN should not exceed the SMS of
that resource.
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12. • Society may have two choices when there is uncertainty in a
particular decision: a) extinction of the resource being exploited,
and b) leave the resource in its present state (SMS).
• Choose the strategy that that causes minimum loss.
• Depletion is permitted only if the Social Opportunity Cost is
exceptionally large.
• If the value of the preserved resource < the benefits of the
economic project, then the species can be exploited.
• The main difference between the SMS approach and the critical
natural capital approach:
• In the SMS approach, the SMS for any resource type is allowed if society
deems the opportunity costs of preserving the SMS to be unacceptably high.
• But in the London School, the critical natural capital stock has to be
preserved regardless of any cost consideration.
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13. • Limitations:
• Assumes that environmental costs and benefits can be measured
in money terms. Not possible to equate benefits of SMS with
economic values. E.g. is the value of tigers greater in money
terms compared to mining in the forest reserve?
• Static analysis. Deterioration of environment is progressive.
• Ignores income distribution, who gains, who loses.
• Environmental values of each and every species and ecosystems
are not known.
• Many economic decisions may only be postponed to the future,
even if the species is conserved now.
• Determination of which costs are high or low, depends on
political and social pressures.
• Ignores non-renewable resources and pollution.
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14. 2. Very Strong Sustainability Theory (VSS)
• Supported by the “Deep Ecology” movement.
• Every species and every ecosystem should be preserved.
• No substitution possible between Km and Kn, or between different
types of Kn.
• Based on Holling’s concept of Ecosystem Resilience.
• “The resilience of an ecosystem is an increasing function of its
diversity”
• In other words, preservation of biodiversity allows an ecosystem to
regenerate itself. Otherwise, it will deteriorate.
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15. • Common and Perrings model (1992) combines economic
sustainability with ecological sustainability.
• In their model they show that economic sustainability is neither
sufficient nor necessary for ecological sustainability.
• According to Common and Perrings:
• Economic development destroys ecosystems, making them lose their
resilience.
• Any change in ecosystems, affects the economy.
• So Very strong sustainability requires economic development takes
place without disturbing the resilience of ecosystems to retain their
original equilibrium position.
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16. The Model:
• The VSS is a linear programming model, in which a welfare function has
to be maximised subject to ecological limitations:
• 𝐽 = 𝑊 𝑇 𝐴 𝑇, 𝑍 𝑇, 𝑇 𝑒−𝑟𝑇 + [ 0
𝑇
𝑌𝑡 [Ã𝑜, 𝑈𝑡, 𝑍𝑡, 𝑡]𝑒−𝑟𝑡 𝑑𝑡
(a) (b)
Part (a) above shows the welfare function of the final period T.
• W(T) is a function of AT = amount of resources available in the final period.
• ZT = ecosystem parameters which are a function of the amount of disturbance
to the ecosystem A*
t
• r = rate of discount = mec
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17. • Part (b) of the above equation: shows the income stream added to
the Welfare function. The sum of the income stream generated over
time is a function of:
• Ãt = undisturbed ecosystem,
• Ut = use or consumption of natural resources
• Zt = ecosystem parameters,
• r = discount rate = mec
• Constraints:
• Initial level of resources A0 and prices P0.
• Z/t = Z’t ≤ 0. The ecological constraint – the economic system should not
cause any disturbances to the ecosystem parameters.
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18. • Solutions:
• In the Objective function, both W and Y are functions of Zt = ecosystem
parameters.
• For sustainable development, both Y and W functions should be stable.
• This is possible when:
𝛿𝑊
𝛿𝑡
=
𝛿𝑌
𝛿𝑡
= Z’t = 0
• For the growth of both welfare and income, the ecosystem parameter Z’t
should remain constant, i.e. the rate of change in Z’t = 0
• But if Z’t = 0, then Y and W = 0
• This implies a Stationary State.
• Therefore, according to VSS, to achieve sustainable development,
where ecosystem stability and resilience are maintained, economic
growth should be zero.
• The present levels of Y and W have to be maintained. No growth.
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19. Limitations:
Assumes that the present levels and distribution of Y and W are equitable
and desirable, and the same levels should be continued in future.
But:
1. Present type of development is resource intensive and polluting. Continuing at the
same rate will lead to more environmental destruction.
2. Assumes that the same destructive technology will be used in future also. No
discussion of substituting with eco-friendly technology or goods.
3. Distribution and consumption are inequitable between nations, less developed
countries will be devoid of resources.
4. Deals only with renewable resources, not conservation of non renewable
resources.
5. Difficult to ascertain the level of resilience of any ecosystem,
6. Does not show how present status of the environment should be corrected and
preserved.
7. Does not discuss how pollution levels should be tackled and reduced.
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