Transcript Sustainability

Sustainability
• Sustainability has become a major
concern in all aspects of economic and
financial decision making
• How sustainable is our society?
• What signs we should look at on
sustainability?
Children as the future of our society
• We often say children are the future of our
society.
• How about the fertility rates in Canada?
• About 1.6.
Detailed consequences
• School enrolments keep declining in most
school districts.
• In Prince George, we already experience
two waves of school closure in the last ten
years.
• University enrolment
• Future work forces
Factors determining sustainability
• Abundance of natural resources
• Living standard
• Irrelevance of natural resources in a
technology society?
More detailed analysis
• Fixed cost and sustainability
• High school have higher fixed cost than
elementary school.
• When a community cannot support a high
school, young families start to move away.
• Eventually, the community cannot support an
elementary school. More families move away.
• The community eventually disappear.
• Example, Hixon, which is between Prince
George and Quesnel.
Why most economists are not
concerned
• Economists mostly use GDP as the
measure of health of the society.
• GDP is still growing in most wealthy
countries
• We believe fertility rate, which is the return
on human investment, is a much more
fundamental parameter.
Examples
• If fertility is used as a measure of social
health in Japan, you can recognize its
eventual decline in early 70s.
• However, even today, economists are still
arguing about how past policy mistakes
wreck Japanese economy and how a good
policy can revive Japanese economy.
• If fertility is used as a measure of social
health in Europe, you would be much less
ambitious about expansive social
engineering such as Euro zones. Instead
various countries will prepare for
maintaining and reducing their social
structures.
• If fertility is used as a measure of social
health in China today, policy makers would
attempt to slow down instead of speed up
economic growth, to avoid future
economic collapse.
• If fertility is used as a measure of social
health in Canada today, we would stop
further burdening ourselves with things like
carbon tax; we would stop worrying for the
impacts to future generations for we have
already stopped producing future
generations.
• Historically, the sharp decline of fertility is
always the harbinger of decline of highly
developed civilizations.
• However, there is a time lag between the
decline of fertility and the decline of
economic output.
• The initial decline of fertility reduces the
ratio of dependents over workers, which
actually speed up economic growth.