A just and efficient reduction of resource throughput to optimum

Resource throughput in the economy (e.g., of energy or materials) must be progressively reduced by at least one order of magnitude to achieve an optimal level. Although this would solve the resource distribution conflict between the generations, it would also aggravate the resource distribution conflict between persons of the same generation. It is shown here that a solution to these two conflicts and efficient resource allocation are only possible if resource certificates are distributed to consumers free of charge and traded between them. This paper builds on and integrates ideas developed in H. Daly's [Daly, H.E., 1992. Allocation, distribution, and scale: towards an economics that is efficient just, and sustainable. Ecological Economics 6, 185-193.] article on allocation, distribution, and scale, adding insights from the ecological footprint concept, to propose a mechanism for facilitating intergenerational equity and drastically reducing resource throughput. Basically the mechanism involves rationing throughput equitably, internalizing environmental and social externalities, and substituting labour for resource use. This can be achieved almost without a drop in prosperity. Both unemployment and dependence on scarce resources decline. (c) 2005 Elsevier B.V. All rights reserved.