By Rudolf Wittmer
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Weak versus Strong Sustainability, Environmental Kuznets Curves and the Environment-Growth Debate ' In BIueprint I we noted that economists are generally split into two camps over the special role of natural capital in sustainable development. The main disagreement between these two perspectives is whether natural capital has a unique or essential role in sustaining human welfare, and thus whether special compensation rules are required to ensure that future generations are not made worse offby natural capital depletion today (see Figure 2.
In contrast, proponents of the strong sustainability view argue that physical or human capital cannot substitute for all the environmental resources comprising the natural capital stock, or all of the ecological services performed by nature. Essentially, this view questions whether, on the one hand, human and physical capital, and on the other, natural capital, effectively comprise a single homogeneous total capital stock. Uncertainty over many environmental values, in particular the value that future generations may place on increasingly scarce natural resources and ecological services, further limits our ability to determine whether we can adequately compensate future generations for irreversible losses in essential natural capital today.
A key feature of these models is that technological innovation - the development of new technological ideas or designs - is endogenously determined by private and public sector choices within the economic system. Two important implications emerge from the endogenous-growth literature (Barro and Sala-I-Martin, 1995). First, a s the levelof technology in an endogenous-growth economy can be advanced perpetually through public and private investments, such as research and development expenditure and increases in human capital skills, and since the effect of technical innovation is to augment the physical capital used in production, then potentially the economy can sustain growth rates indefinitely.