Sustainable recursive social welfare functions

Abstract

What ethical criterion for intergenerational justice should be adopted, e.g., when faced with the task of managing the global environment? Koopmans' axiomatization of discounted utilitarianism is based on seemingly compelling conditions, yet this criterion leads to hard-to-justify outcomes. The present analysis considers a class of sustainable recursive social welfare functions within Koopmans' general framework. This class is axiomatized by means of a weak equity condition ("Hammond Equity for the Future") and general existence is established. Any member of the class

Justifying social discounting: The rank-discounted utilitarian approach

“…DU does not satisfy Strong Anonymity as an axiom of procedural equity, since the permutation of consumption may change the DU social welfare. Moreover, as pointed out by Asheim, Mitra and Tungodden [6], the DU SWF does not satisfy the following distributional equity axiom, giving priority to the future in conflicts where the present is better off than the future.…”

“…Building on Asheim, Mitra and Tungodden's [6] axiomatic analysis of sustainable recursive SWFs, Asheim and Mitra [5] allow for Hammond Equity for the Future by restricting Separable Present to the set of non-decreasing streams (i.e., imposing Restricted Separable Present) in their analysis of sustainable discounted utilitarian (SDU) SWOs, while retaining the remaining axioms of the above axiomatization of DU. Moreover, SDU SWOs satisfy Non-Dictatorship of the Present, but fail to satisfy Strong Anonymity.…”

“…[6,Proposition 9]). DU does not satisfy Strong Anonymity as an axiom of procedural equity, since the permutation of consumption may change the DU social welfare.…”

“…The conjunction of Restricted Separable Future and Restricted Stationarity is the restriction of Independent Future, as used by Asheim, Mitra and Tungodden [6], to the set of non-decreasing streams.…”

“…Distributional equity in the spirit of Atkinson [7] has been addressed in many papers in the literature on intergenerational equity (see, e.g., [9,12,28]). However, this literature did not emphasize the effects of inequality aversion on society's choice.…”