Economic interpretations of sustainability today are usually based on the consensus reached by the World Commission on Environment and Development (WCED), which defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987, p. 43).
Although economists now generally accept the WCED definition of sustainability, in the 1970s and 1980s there was less agreement on what sustainable development means. As pointed out by Pearce et al. (1989, p. 28), the problem was that the concept was too broad and open to interpretation: «Definitions of sustainable development abound. There is some truth to the criticism that it has come to mean whatever suits the particular advocacy of the individual concerned. This is not surprising. It is difficult to be against ‘sustainable development’. It sounds like something we should all approve of, like ‘motherhood and apple pie’.»
One of the earliest attempts in economics to operationalize sustainable development was the systems approach, which characterizes sustainability as the maximization of goals across environmental, economic and social systems (Barbier 1987; Barbier and Markandya 2012; Ekins 1994; Elliott 2006; Holmberg and Sandbrook 1992; Pezzey and Toman 2002). This approach is attributed to Barbier (1987), who first identifies three systems as basic to any process of development: the environmental (or ecological) system, the economic system and the social system…