Managing for Intergenerational Equity

Abstract

In an earlier paper (Wright 2006) it was argued that a concern by humanity for something like 'intergenerational equity' is plainly required and that democratically-elected governments serve this increasingly popular concern with appropriate rhetoric. In meaningful analysis of the issues environmental economics is thwarted by relevant uncertainty and ecological economics offers nothing more compelling than a set of ultimate outcomes from which one should work backwards to define current optimal action. Economic approaches are moving, and will inevitably move more, to inform analysis through time as the reality bites of the opportunity cost of various interventions in markets to pursue sustainability. In this paper the core question to be addressed is how government should approach the management of intergenerational equity. The coexistence of very clear and present issues, such as global warming and depletion of world fish stocks, and the failure of any discipline to yet identify an optimising algorithm has a single, clear implication: empowered managers of the earth's resources need to adopt an approach, or approaches, to managing the issue which is appropriate to the lack of knowledge which bedevils the disciplines. The major approaches that have been adopted to date are the rapid and widespread adoption, nominally at least, of the Precautionary Principle (PP) and commitments to sustainability.