Sustainable Preferences and Damage Abatement: Value Judgements and Implications for Consumption Streams

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This paper examines the implications of adopting alternative value judgements when evaluating future consumption streams in the context of damage abatement. The paper focusses on a form of ‘sustainable preferences’ designed to avoid either a dictatorship by present or by future generations which can arise when using a ‘standard’ social welfare function. Numerical examples are reported, based on a simple growth model, under alternative damage abatement parameters and welfare functions. The results illustrate how sustainable preferences effectively reduce the damages on future consumption by shifting consumption from the present to the future. This implies an intergenerational trade-off. An explicit policy of damage abatement under a standard social welfare function implies a similar intergenerational trade-off. However, the results suggest that damage abatement does not penalise current generations as much under sustainable preferences as it does under standard value judgements.

Stream: Economic Sustainability

Paper: A paper has not yet been submitted.

Ross Guest is Professor of Economics in the Griffith Business School and Adjunct Professor with the Australia and New Zealand School of Government. Before joining Griffith University in 1998 he spent 8 years at Monash University in Melbourne where he was appointed Senior Lecturer in 1997. He has a Ph.D in Economics from the University of Melbourne and a Master of Higher Education from Griffith University.
His current research programme is concerned mainly with the macroeconomics of population ageing in Australia and other regions of the world. He has published articles on this and related topics in, for example, The Journal of Macroeconomics, The Economic Record, The Review of Development Economics, The Journal of Policy Modelling, Oxford Economic Papers, The Singapore Economic Review, The Journal of Asian Economics, and Economic Modelling. He has received three grants from the Australian Research Council to support this work.