Economic Performance and Environmental Quality at the Regional Level An Approach to Modeling Depletion Adjusted Macro Aggregates for the Czech Coal Mining Regions

Background

The generally recognized definition of sustainable development was published by the World Commission in 1987, and is formulated as “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987). Paraphrasing the Hicksian dynamic approach to income (see Hicks, 1939), one can say that (sustainable) income is the maximum value that it is possible to consume during a period and still expect to be as well off at the end of the period as at the beginning. According to utilitarian theory, the capital stock available to a nation generates income (or a flow of utility that actually “meets the needs” of the society). In this respect sustaining the capital stock per capita would maintain the same per-capita utility flow for the present and future generations, or in other words, would lead to sustainable income.