Environmental Values 14(2005): 185-201. doi: 10.3197/0963271054084966
The capital approach is frequently used to model sustainability. A development is deemed to be sustainable when capital is not reduced. There are different definitions of sustainability, based on whether or not they allow that different forms of capital may be substituted for each other. A development that allows for the substitution of different forms of capital is called weakly sustainable. This article shows that in a risky world and a risk-averse society even under the assumptions of weak sustainability the circumstances under which different forms of capital may be substituted are limited. This is due to the risk-reducing effect of diversification. Using Modern Portfolio Theory this article shows under which conditions substitution of different forms of capital increases risk for future generations.
KEYWORDS: Weak and strong sustainability, risk, substitutability, capital approach
REFERENCES to other articles in Environmental Values:
'Sustainable Development': Is it a Useful Concept? Wilfred Beckerman
On Wilfred Beckerman's Critique of Sustainable Development. Herman Daly
CITATIONS in other Environmental Values articles:
Sharing the Earth: Sustainability and the Currency of Inter-Generational Environmental Justice. Allen Habib
This article is available online (PDF format) from Ingenta Journals. Access is free if your institution subscribes to Environmental Values. Reprints of this article can be ordered from ingenta or the British Library
Other papers in this volume
Contact the publishers
Contact the publishersfor subscriptions and back numbers of Environmental Values.
THE WHITE HORSE PRESS
The Old Vicarage, Winwick
Cambridgeshire, PE28 5PN, UK
Tel: +44 1832 293222