Transcript How do you define Well-Being? - NCEAS Computing Services

How do you define WellBeing?
Bridget O’Donoghue and Molly O’Connor
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Social Well-Being
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V Cx   G U1 C x   G U 2 C x   ... G U N C x 
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V Cx    i G U i C x 
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V = Social Well-Being
C = Consumption
x = Social state
G = Equity or Distribution term
U = Individual Well-Being
Dasgupta, Partha (2010)
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Individual Well-Being
Well-Being as a State of Mind
• Pleasure vs. Contentment
Well-Being as a State of the World
• i.e. GDP, Birth rate, Death rate, Political stability
Well-Being as Human Capability
•Doing vs. Being
Well-Being as the Satisfaction of Underlying
Needs
• Maslow’s Hierarchy of Needs
Dodds, Steve (1997)
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Maslow’s Hierarchy of Needs
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Relative Well-Being
V(C(x))
Support Base
Well-Being
V(C(x))??
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Well-Being Across Generations
Maximized
Present Value
Criterion
• Current and Future
Utility Consumption is
Maximized
The
Sustainability
Criterion
• The change in wellbeing over time must be
greater than zero 
dV/dt ≥ 0
Arrow, Kenneth et al (2004)
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Why is human well-being
increasing as ecosystem
services degrade?
Sara Avila and Christina Nolfo
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Environment
HUMANS
Well-being
Shadow
Prices
Environment
Why is human well-being increasing as
ecosystem services degrade?
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human well-being
ecosystem services
From: Raudsepp-Hearne, et.al.
1. Not measured adequately
2. Some services (food) are so
important that increase well
being
3. Technology and social
innovation
4. Time lag
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HYPOTHESIS
1. Not measured
adequately
BIOSCIENCE
(RaudseppHearne, et.al.)
HDI and GDP
are OK
OUR CHAPTER
(Dasguptq and others)
Definition of wellbeing is
rather defined as inclusive
wealth.
GDP and HDI do not
consider the degradation of
the productive base.
3. Technology and
social innovation
Reject
decoupling and
support the
efficiency of
technology
Included in the definition of
wealth and productive base.
R&D enhanced via prices
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Inclusive Wealth
(Dasgupta, et.al. Old Chapter 4 & 5)
INCLUSIVE
WEALTH
Present value of assets
such as:
Buildings
Roads
Machines
Present value of assets
such as:
Wetlands
Coastal waters
Forests
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Productive Base
(Dasgupta, et.al. Old Chapter 4 & 5)
Productive
Base
CAPITAL ASSETS:
Manufactured
capital
Human capital
Population
Knowledge
Natural capital
INSTITUTIONS:
Formal institutions
Informal institutions
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HYPOTHESIS
BIOSCIENCE
(RaudseppHearne, et.al.)
2. Some services (food)
are so important that
increase well being
Supported
4. Time lag
mixed
OUR CHAPTER
(Dasguptq and others)
Food is important and
other ecosystem services
are important too; their
impact in wellbeing
needs to be measured.
If irreversibility and
uncertainty are present,
Shadow prices
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How can shadow prices be
implemented feasibly?
Christine O’Connell, Nathan Mueller, and
Katie Lundquist
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Elucidating Shadow
Prices: Terms
• Externality?
The cost or benefit of a good not
incurred by the parties involved in
the transaction (e.g. cost of increased
asthma treatment due to coal plant
emissions)
• Market Price?
• Shadow Price?
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Graphical Representation: Externality
MEC = marginal external cost = MSC – MPC
e.g. cost of increased asthma treatment due to coal plant emissions
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Elucidating Shadow
Prices: Terms
• Externality?
•
•
The cost or benefit of a good not
incurred by the parties involved in
the transaction (e.g. cost of increased
asthma treatment due to coal plant
emissions)
Market
The
price
atnot
which
buyers
and
sellers
trade;
does
incorporate
external
costs
(MPC
line
to the
right;
the
price
of
coal
asPrice?
it
trades)
Shadow
Price?
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Graphical Representation: Market Price
Market Price = price at the equilibrium between MPC and demand curve
(here, Q1=quantity1 at P2); the price of coal as it trades
Market
price = P2
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Elucidating Shadow
Prices: Terms
• Externality?
•
•
The cost or benefit of a good not
incurred by the parties involved in
the transaction (e.g. cost of increased
asthma treatment due to coal plant
emissions)
Market
The
price
atnot
which
buyers
and
sellers
trade;
does
incorporate
external
costs
(MPC
line
to the
right;
the
price
of
coal
asPrice?
it
trades)
Shadow
Price?
This
isofthe
marginal
social
price
of the
an
additional
unit
ofMSC
a unit
product
(the
derivative
of
the
to
right,
price
using
each
ofthe
more
coal
if
you’re
incorporating
asthma,
etc.)
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Graphical Representation: Shadow Prices
Shadow Prices = marginal social price (the price of each unit of more
coal if you’re incorporating asthma, etc.); so, here, the shape of the MSC
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How Shadow Pricing Calculation Could Work
•From Tol (2009); calculated price carbon ($/tC) using
enumerative method
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How Shadow Pricing
Implementation
Could Work
•SO2 cap-and-trade
allowances (Acid Rain
Program, 1990 Clean Air
Act); two-phased
tightening of allowances
(1995, 2000)
•Goal is to reach 50% of
1980 emissions; as of
2005 at 40% below 1980
levels
(Natl. Acid Precip. Assessment
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