Are We Consuming Too Much?

Abstract

This paper articulates and applies frameworks for examining whether consumption is excessive. We consider two criteria for the possible excessiveness (or insufficiency) of current consumption. One is an intertemporal utility-maximization criterion: actual current consumption is deemed excessive if it is higher than the level of current consumption on the consumption path that maximizes the present discounted value of utility. The other is a sustainability criterion, which requires that current consumption be consistent with non-declining living standards over time. We extend previous theoretical approaches by offering a formula for the sustainability criterion that accounts for population growth and technological change. In applying this formula, we find that some poor regions of the world are failing to meet the sustainability criterion: in these regions, genuine wealth per capita is falling as investments in human and manufactured capital are not sufficient to offset the depletion of natural capital.

“Too much medicine”: Insights and explanations from economic theory and research

“…maximizing the present value of current and future utility from consumption) or sustainability, i.e. the ability of the economy to maintain human living standards or social well-being without their declining over the long run (Arrow et al 2004;Dasgupta 2010). Others explicitly frame this question in terms of whether humanity is consuming too much for the rest of the planet (Daly et al 2007).…”

Temporal and Spatial Distribution of Global Mitigation Cost: INDCs and Equity

“…The parameter g t,r is the consumption growth rate in region r, and h can be viewed as a measure of intertemporal inequality aversion [26][27][28][29]. AR5 [1] explained h with the following thought experiment.…”

Sustainable development: conceptualizations and measurement

“…Another instance is, to some extent, in the analysis by Arrow et al, 2004, of the WBRT preliminary results. The tone and the conclusions of the paper, authored by a group of prominent economists and environmentalists, are similar to those of the World Bank, 2005b report.…”