Incorporating Resilience in the Assessment of Inclusive Wealth: An Example from South East Australia

This paper explores the consequences of changes in a system’s resilience on the sustainability of resource allocation decisions, as measured by Inclusive Wealth (IW) (Arrow et al. in Environ Resour Econ 26:647–685, 2003). We incorporate an estimate of resilience in IW by taking account of known or s...

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Bibliographic Details
Published in:Environmental & resource economics 2010-02, Vol.45 (2), p.183-202
Main Authors: Walker, Brian, Pearson, Leonie, Harris, Michael, Maler, Karl-Göran, Li, Chuan-Zhong, Biggs, Reinette, Baynes, Tim
Format: Article
Language:English
Subjects:
Agricultural production
Australia
Case studies
Consumption
Economic Policy
Economics
Economics and Finance
Ecosystems
Environmental Economics
Environmental Law/Policy/Ecojustice
Environmental Management
Estimation
Evaluation
Inclusive wealth
INTERDISCIPLINARY RESEARCH AREAS
Land economics
Measurement
Nationalekonomi
Present value
Productivity
Resilience
Resource allocation
SAMHÄLLSVETENSKAP
Shadow prices
SOCIAL SCIENCES
Studies
Sustainability
Sustainable development
TVÄRVETENSKAPLIGA FORSKNINGSOMRÅDEN
Wealth
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Summary:This paper explores the consequences of changes in a system’s resilience on the sustainability of resource allocation decisions, as measured by Inclusive Wealth (IW) (Arrow et al. in Environ Resour Econ 26:647–685, 2003). We incorporate an estimate of resilience in IW by taking account of known or suspected thresholds that can lead to irreversible (or practically irreversible) changes in the productivity and value of assets and hence social welfare. These thresholds allow us to identify policies or projects that may be leading to an increased risk of decline in capital stocks (the wealth of the region). Such risks are not reflected through usual measures of current system performance, e.g. agricultural production. We use the Goulburn-Broken Catchment in south-eastern Australia as a case study to explore the significance and practicality of including resilience in inclusive wealth estimates.
ISSN:0924-6460
1573-1502
1573-1502
DOI:10.1007/s10640-009-9311-7