| Abstract: |
The objective of this work is to explore the concept of weak sustainability as it evolved in a framework of neoclassical economics. The reader is briefly introduced to the origins of concern about sustainability and in order to define sustainability as such, simplifying assumptions are mentioned. A distinction between “weak” and “strong” sustainability is made depending on whether substitution between natural and man-made capital is allowed. It is argued that the concept of weak sustainability originated from the growth theory with exhaustible resources and it is shown that applying thermodynamic laws in the analysis of sustainability has fundamental implications for substitution possibilities. Furthermore, question arises whether weak sustainability can be measured in practice. A theoretically correct measure called “Genuine Savings” is introduced. It is based on Hartwick savings-investment rule and its derivation from a formal model is performed. World Bank’s methodology of its computation is examined and its results discussed. Genuine Savings is also critically assessed and its validity, reliability, and relevance questioned. |
