Discussion Paper

The Economics of Sustainability: A Review of Journal Articles

Feb 1, 2002 | John C. V. Pezzey, Michael A. Toman


Concern about sustainability helped to launch a new agenda for development and environmental economics and challenged many of the fundamental goals and assumptions of the conventional, neoclassical economics of growth and development. We review 25 years’ of refereed journal articles on the economics of sustainability, with emphasis on analyses that involve concern for intergenerational equity in the long-term decisionmaking of a society; recognition of the role of finite environmental resources in long-term decisionmaking; and recognizable, if perhaps unconventional, use of economic concepts, such as instantaneous utility, cost, or intertemporal welfare. Taken as a whole, the articles reviewed here indicate that several areas must be addressed in future investigation: improving the clarity of sustainability criteria, maintaining distinctions between economic efficiency and equity, more thoroughly investigating many common assumptions in the literature about prospects for resource substitution and resource-enhancing technical change, and encouraging the empirical investigation of sustainability issues.