Twenty years on from the Rio '92 conference, we must face the fact that there have been a few successes but more failures. Scientific complexity, uncertainty, short-termism inherent in politics, the free-rider problem, and issues of fairness are part of the explanation for the lack of progress, but we point to more fundamental motivational problems. It is time to assess our responsibility as economists in the field of environment and resources. Our scientific contribution has been misleading because our models are structurally incapable of addressing major concerns. The cost-benefit test is not fit to assess large-scale resource conservation projects, including climate abatement. This understanding was already present during the Rio '92 summit, but the problems, while identified, have not been resolved twenty years later. The contribution from theory, through the sustainability paradigm of non-decreasing welfare, has turned out ineffective. It does not provide us with tools for designing a better future for our children. Instead, it risks choosing a constant welfare path, with knowledge increasing but natural resources deteriorating, while not properly analyzing the richer possibilities for a better future that nature and creativity imply. It is time for our profession to search for a more constructive contribution in theory and practice.
- Rio Earth summit
- climate change