Defining sustainable development objectives: a difficult exercise

The concept of sustainable development requires us to pass on capital to future generations allowing them to meet their economic, environmental and social needs. Defining the nature of that “capital” and how to protect it is a difficult task which can be tackled either through an approach based on prices reflecting the relative value of the various assets, or through a more physical approach based on indicators associated with quantities of assets to be protected. Usually, economists favour the former approach, but they also have methods to describe the necessary trade-off between conflicting factors, and the way of reaching these factors in time, when the second approach is chosen. These methods provide decision-making tools to define socially the thresholds that we wish to impose on the sustainability indicators.