While some progress has been made in assessing the sustainability of particular production processes, much remains to be accomplished. Measurement is complicated by the need to establish an appropriate time frame. The tendency is to look at an infinitely long period. This approach is not necessarily appropriate since it is impossible to accurately predict future events. The concern is with the capacity of natural resources in combination with physical and biological systems to provide the desired flow of output in the future. A further complication is that other factors impinge on production. Investments in intellectual and physical capital result in development of new or improved production practices which may involve using other resources to produce the output desired. An example is the substitution of nuclear energy for coal in the production of electrical power.

There are two measures of sustainability to be considered, the economic and the physical. Richard Gray ¹ among others has devoted considerable efforts to development of economic measures, while the work of Zentner² provides an insight into determination of the physical as related to the soil resource used in agriculture.

An economic measurement of sustainability is difficult, as there are several viewpoints to consider. Gray stated that two general views prevail concerning sustainability in agriculture, one by consumers and one by producers. Consumers view sustainability in terms of its capacity to provide an abundance of quality food. Producers view sustainability as an income generating activity with economic and social value. The concern they have is with maintaining a net return from the sale of agricultural products. In economic terms, consumers assess sustainability in terms of maintaining a level of consumer surplus in the consumption of food over time. On the other hand, in economic terms, producers regard sustainability as the maintenance of a producer surplus or economic rent (return to factors used in production) over time. This dichotomy of interest provides a basis of conflict and attracts attention to the difficulty experienced when trying to measure sustainability. From the consumer's standpoint, security of the food supply is uppermost particularly among those who have previously experienced shortages or indeed famine. Measurement of the value of food security becomes almost impossible. Time preference becomes a complicating factor as does trying to aggregate the preferences of individuals. Gray contends attempts to measure sustainability in terms of food security should be abandoned.

Gray argues that sustainability may be measured in terms of the flow of income from agricultural production. He also notes that society regards sustainability in terms of all the costs and benefits of production. Particular issues that are raised when measuring sustainability are the discount rate; private versus social costs (negative externalities); non-market benefits (positive externalities); economic flexibility; and income/risk preferences. In addition to maintaining a producer surplus is the need to sustain farm families. Furthermore, sustainability must be measured taking into account uncertainty. Gray suggests that the elasticity of supply (the change in output relative to a change in price) may be a relevant indicator of sustainability. Output in response to price changes is impacted by technologies and available inputs. Consequently, society should support policies which enhance technology through research. Since the tools of government policy impinge on sustainability and policy results from the political process, economic measurement of sustainability becomes a very difficult and hazardous task.

In contrast to the economic measurement of sustainability, a physical measurement is relatively straightforward. It deals with particular processes or uses of resources. Zentner illustrates such measurement with reference to the soil resource. He notes that since the soil resource used in agriculture is largely privately owned, producers can be expected to organize their activities in a manner that maximizes their private benefits. On the other hand, society desires to maximize the social benefits. There is a common interest in conserving the soil since failure to do so increases the marginal costs of production and reduces the future streams of private and social benefits. However, several reasons exist as to why producers adopt a set of soil use strategies which differ from those held desirable. They may lack information on the depletive consequences of particular production practices; they may be faced with constraints irrelevant to society as a whole, these including the need to accept lower short run profits as a result of soil conservation practices, institutional restrictions such as quota systems and government policies which create distortions and encourage the use of soil depletive practices; they may have different planning horizons and time preferences; and they may have a short term view on externalities such as saline seeps, soil erosion and contamination of ground water.

Three factors must be considered when estimating the long term consequences of soil degradation. These factors are the value of agricultural production that is permanently lost or not forthcoming as a result of reduced soil productivity; the cost of the additional inputs necessary for agricultural production; and the social costs of the externalities being generated. Accurate measurement of these factors is an exceedingly complex process. Furthermore, estimation of the long term effects on soil productivity is subject to substantial error. In addition, establishment of the economic consequences of soil degradation involves forecasts of future reductions in productivity while recognizing the possibility of development of new technologies. Finally, the economic consequences of soil degradation alone can be determined by estimating the returns otherwise received from the lost production. It should be noted that the additional output forthcoming from conservation will have a negative impact on price.

Evaluation of sustainability, even in the case of a particular resource used in agriculture, is replete with problems. A number of value judgments are required since some of the variables do not lend themselves to objective measurement. Technologies which tend to conceal the effects of degradation in terms of yield continue to be developed. Consequently, measurement of the sustainability of a resource, such as the soil, is difficult over an extended period of time. On the other hand, exact measures may not necessarily be mandatory when attempting to evaluate sustainability since in many situations the degradation is obvious and, as in the case of the soil, should stimulate action to adopt conservation practices.

Other relevant IISD material:

The Bellagio Principles for Effective Measurement of Sustainable Development

Footnotes:

1. R. Gray, "Economic Measures of Sustainability", Canadian Journal of Agricultural Economics, Vol. 39, No. 4, Part 1, December 1991. pp. 627-635.
2. R. Zentner, Economics of Soil Conservation in Western Canada, Research Branch, Agriculture Canada Research Station, Swift Current, 1981.

INDEX:

Great Plains Home Page

Measurement of Sustainability

Land Use

Degradation of Soil Resources

Preservation of Biodiversity

Water Use and Quality

Rural Communities

Economic Situation

Use of Common Property

Impacts of Trade on Sustainability

Federal & Provincial Policies

Global Changes