Quiz 5: Dynamic Efficiency and Sustainable Development
Sustainable development can be defined as the development that satisfies the need of the present generation. At the same time, it does not compromise the ability of the future generation to satisfy their own needs. It depends upon the long-range planning. According to the weak sustainability criterion, resource use by previous generations should not exceed a level that would prevent subsequent generations from achieving at least that level. According to the strong sustainability criterion, value of the remaining stock of the resource should not decrease. It can be observed that the environment sustainability criterion is different from both strong and weak sustainability. Under some conditions, some sustainable allocations prove to be efficient and some efficient allocations prove to be sustainable. There are some win-win situations because moving from an inefficient to an efficient allocation increases net benefits. Compensating losers reduces the opposition to change making the change more likely.