Sustaining what for whom? Optimizing in the face of scarcity What is sustainability? • A non-declining capital stock – “weak” sustainability. • “Natural capital assets...should not decline through time.” Pearce – “strong” sustainability Of the myriad definitions They are all trying to get at several things: • facing limits • meeting needs • equity • avoiding disaster Toward what purpose? • Avoid human emiseration resulting from irreversible damage to ecosystems. • Implication: now and into the future Economics and sustainability All economics begins with one premise: • Every action has an opportunity cost. Why? • Scarcity is a given. Enter ecological economics Markets do many things well, but they do not recognize ultimate limits. • 1st and 2nd Laws • Optimization at the margin ignores scale. • The assumption of substitutability Achieving sustainability requires: • Modifying economic models. • Thinking in time scales to which we are not accustomed. • Reconsidering whether GDP really measures beneficial change. • Letting prices reflect real opportunity costs.