Irreversibility, ignorance, and the intergenerational equity-efficiency trade-off

Arbeitspapier

We demonstrate the existence of an intergenerational equity-efficiency tradeoff in policy-making that aims at Pareto-efficiency across generations and sustainability, i.e. non-decreasing utility over time. Our model includes two salient characteristics of sustainability problems and policy: (i) temporal irreversibility, i.e. the inability to revise one's past actions; (ii) closed ignorance, i.e. future consequences of present actions in human-environment systems may be 'unknown unknowns'. If initially unforeseen sustainability problems become apparent and policy is enacted after irreversible actions were taken, policy-making faces a fundamental trade-off between intergenerational Pareto-efficiency and sustainability.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series in Economics ; No. 198

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Sustainable Development ; Nonrenewable Resources and Conservation: Government Policy ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
• Subject: climate change ; closed ignorance ; intergenerational equity-efficiency tradeoff ; irreversibility ; Pareto-efficiency ; sustainability ; Soziale Gerechtigkeit ; Wirtschaftliche Effizienz ; Generationenbeziehungen ; Pareto-Optimum ; Nachhaltigkeit ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hoberg, Nikolai ; Baumgärtner, Stefan
• Event: Veröffentlichung
• (who): Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre
• (where): Lüneburg
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/57153
• Last update: 10.03.2025, 11:44 AM CET