Sustainable Resource Use and Development: Uncertainty, Irreversibility and Rational Choice
This chapter examines the problem of rational social choice for the above class of resource policy problems. Ultimately, most policy decisions relating to competing uses for natural resources, and the management of biologically-based production systems, are made under circumstances of risk aversion and a high degree of unresolved uncertainty. Expected utility theory provides the conventional framework for rational individual choice under uncertainty. The chapter also examines conceptual frameworks which lead us to ask the right questions and within which the questions can be usefully investigated, rather than attempt to reach firm conclusions on specific questions. It touches only upon the literature on environmental ethics. It reviews the very substantial literature relating to the choice of a social rate of discount. The rate of discounting used in benefit-cost analyses to evaluate preservation versus development alternatives commonly has a quite decisive effect on the result given the typically long time horizons involved.