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Intragenerational inequality aversion and intergenerational equity

Author

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  • Robert Cairns

    (McGill, Montreal)

  • Stellio Del Campo

    (MCC, Berlin)

  • Vincent Martinet

    (INRAE, France)

Abstract

We study the interplay between intragenerational and intergenerational equity in an economy with two countries producing and consuming from national capital stocks. We characterize the sustainable development path that a social planner would implement to achieve intertemporal egalitarianism. If intergenerational equity is defined with respect to the global consumption of each generation, regardless of its distribution between countries, consumption in the poor country should be set as low as possible to maximize investment and hasten convergence, resulting in important intragenerational inequalities. When social welfare accounts for intragenerational equity, the larger the intragenerational inequality aversion (IIA), the smaller the sacrifice asked of the poor country, but the lower the sustained level of generational welfare. Along the intertemporal welfare-egalitarian path with IIA, consumption in the poor country increases, while it decreases in the rich country, resulting in a global degrowth.

Suggested Citation

  • Robert Cairns & Stellio Del Campo & Vincent Martinet, 2021. "Intragenerational inequality aversion and intergenerational equity," Working Papers 2021.04, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2021.04
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    3. Lin Cai & Yating Xu & Kaiqi Zhang & Caiya Zhang & Zhengzhe Xiang, 2022. "A New Measurement of Global Equity in a Sustainability Perspective: Examining Differences from Space and Time Dimensions," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    4. Jasper N. Meya & Stefan Baumgärtner & Moritz A. Drupp & Martin F. Quaas, 2020. "Inequality and the Value of Public Natural Capital," CESifo Working Paper Series 8752, CESifo.

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    More about this item

    Keywords

    sustainable development; intergenerational egalitarianism; maximin; intragenerational inequality; differentiated degrowth;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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