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You are here: Home Discuss Session 10 – 11.15.2010 Worked examples of concepts in human-environment systems Topic 3: Barriers to incorporation of human costs into sustainability

Topic 3: Barriers to incorporation of human costs into sustainability

Up to Session 10 – 11.15.2010 Worked examples of concepts in human-environment systems
How can inclusive wealth models account for the loss of social and economic connectivity (i.e. human and social capital) when implementing sustainable development projects? Is the primary limitation in the determination of value or shadow price (i.e. technical)? What other barriers might lead to these costs being ignored or discounted?

Topic 3:

Posted by wclark at October 08. 2010

Re: Topic 3:

Posted by Amar at November 15. 2010

There are a number of assumptions in calculating the value of shadow prices. In fact, the treatment of shadow prices suffers from the same infirmities that mainstream neo-classical economics suffers from - atomistic, self-interested and fully rational individuals fully informed by friction-less movement of information, amongst others. We know that many of these assumptions are not a correct depiction of reality. But this apart, the aggregation of human interactions or networks for a global measure of social capital appears to me too simplistic, particularly when we know that it is not additive at all. The total social capital of a group is not the summation of each individual social capitals. In fact, if the size or the heterogeneity of the group increases, social capital may actually decrease !! Another problem is the bounded rationality of individuals as regards assessment of their own self-interest and different levels of boundaries for different categories or groups of individuals - say the educated and the uneducated/illiterate. Another barrier would be the collection of data and its accuracy and measurability, because of the very intense coupled nature of the human and the environment sub-systems.

Some times, I feel that we need to get out of this paradigm of neo-classical economics if we are to truly and properly understand and measure wealth and human well -being issues in the context of sustainability science.

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