Weak vs. Strong Sustainability

Sustainability and capital stocks
The concept of sustainable development‘ was first introduced by the International Union for Conservation of Nature and Natural Resources (IUCN) in 1980, but only gained wider societal and political relevance in 1987 with the publication of the report by the UN World Commission on the Environment and Development. This report, often referred to as the Bruntland report‘ (WCED, 1987), defines sustainable development as development that meets the needs of the present, without compromising the ability of future generations to meet their own needs‘.

Capital may be defined as a stock that possesses the capacity to generate a flow of goods and services that satisfy human needs. We can disaggregate the capital stock available to generate this flow into four different types of capital (Costanza and Daly, 1992; El Serafy, 1991; Ekins et al., 2003):

• Manufactured capital, comprising material goods – tools, machines, buildings, infrastructure – which contribute to the production process but do not become embodied in the output and usually are ‗consumed‘ in a period of time longer than a year;
• Human capital, that comprises all individuals‘ capacities for work;
• Social capital, that comprises the networks and organizations through which the contributions of individuals are mobilized and coordinated;
• Natural capital, that provides goods and services such as resources for production processes, absorption and recycling of wastes, water catchment and flow regulation or control of erosion processes. Natural capital can be further sud-divided into renewable natural capital and non-renewable natural capital.

Wealth creation is the process of using these four types of capital in combination to produce the flows of goods and services that people want/need. In order to sustain these flows of goods and services, and ensure their availability for future generations, it is necessary to maintain the level of capital stock. If the capital stock decreases, then it will not be possible to generate the same flow of goods and services. Therefore, maintenance of current capital stocks is a first condition for sustainability.

Weak and strong sustainability
If sustainability depends on the maintenance of the capital stock, then an important issue is whether it is the total stock of capital that must be maintained, with substitution allowed between the different capital forms, or whether certain components of capital, in particular natural capital, are non-substitutable, i.e. they contribute to welfare in a unique way that cannot be replicated by another capital stock (Ekins et al., 2003). This discussion has led to the definition of different degrees of sustainability, ranging from very weak sustainability, which assumes complete substitutability between the different capital stocks, to very strong, which assumes no substitutability, so that all natural capital must be conserved.

The following three degrees of sustainability can be distinguished (Costanza and Daly, 1992):

1. Weak sustainability is concerned with maintaining the total capital stock intact, without regard to the partitioning of that capital among the four kinds. This would imply that the various kinds of capital are more or less substitutable, at least within the boundaries of current levels of economic activity and resource endowment.
2. Strong sustainability calls for the maintenance of the separate capital stocks, assuming that natural and human-made capital are not perfect substitutes, but complementary. For proponents of strong sustainability, the substitutability of manufactured for natural capital is seriously limited by such characteristics of natural capital as irreversibility, uncertainty and the existence of critical components of natural capital which make a unique contribution to welfare‘ (Ekins et al, 2003; Daly 1991).
3. Absurdly strong sustainability, by which we would never deplete anything. Under this assumption, non-renewable resources could not be used, since their use would always mean decreasing capital stock and therefore would be unsustainable.

Several arguments have been raised within the ecological economics community in defence of the strong sustainability paradigm and calling for the maintenance of the natural capital stock, namely (Costanza and Daly, 1992; Ekins et al, 2003; Dietz and Neumayer, 2007):

• recognition of the impossibility of substituting for basic life support systems, namely the global environmental system that provides the basic functions of food, water, breathable air and a stable climate;
• acknowledgment that manufactured capital is, in the end, produced from natural resources with the help of human capital. This statement shows clearly that the two forms of capital are complementary rather than substitutes;
• irreversible character associated with the loss of certain components of natural capital (e.g. the extinction of a species), which generally does not happen in manufactured capital;
• acknowledgment of the risks, uncertainties and ignorance that surround our understanding of the functioning of ecological systems, meaning that we cannot tell what the effects associated with the loss of natural capital will be.

The concept of critical natural capital‘ has emerged in this context, as natural capital which is responsible for the important environmental functions and which cannot be substituted in the provision of these functions by manufactured capital (Ekins et al., 2003).

Sustainable management of natural capital
Adopting a strong sustainability standpoint, the following operational rules have been proposed to ensure sustainable management of natural capital stocks (Daly, 1991; Costanza and Daly, 1992):
1. The scale of human activities in the biosphere should be limited to a level that is within the carrying capacity of natural capital. Sustainability must deal with sufficiency, as well as efficiency, and cannot avoid limiting physical scale;
2. Technological development should focus on allowing for an increase in the efficiency of resource use rather than in increasing throughput (the flow of goods and services from natural to human systems and the associated flow of wastes from human to natural systems);
3. Renewable natural capital stocks, both in source and sink functions, should be managed on a sustainable basis, meaning that:
a. Harvesting rates should not exceed regeneration rates;
b. Waste emissions should not exceed the renewable assimilative capacity of the environment;
4. Non-renewable natural resources should be exploited no faster than the rate of creation of renewable substitutes. This is sometimes called El Serafy‘s rule (1991). The revenue from exhaustible resources such as oil is divided into two parts, one of which can be freely spent in consumption provided that the other part is invested into new sustainable sources of energy that will completely substitute for the depleted resources. This is in fact closer to weak sustainability‖ than to strong sustainability but then the question arises: should we leave oil in the ground instead.