In this chapter you will:

• Find out how the principle of sustainable development was put on the policy agenda;

• Learn how researchers from different academic fields have suggested operationalising the principle of sustainable development;

• Find out why imperfect knowledge makes scientific analysis and decision making much more difficult;

• Learn about the precautionary principle;

• Consider how policy objectives are set in democratic societies.

In this book so far we have seen that the human economy is located within the environment and that our economic activities are jeopardising the sustainability of the environment and hence of the economy itself. Policy makers worldwide therefore face the massive task of finding ways to organise economic activities such that they address the needs of the current generation better (alleviate poverty) and maintain the capacity of the joint economy–environment system to continue to satisfy the needs and desires of humans for a long time into the future – of finding ways for achieving sustainable development. In the last chapter we saw that, for two reasons, this task cannot be left to markets alone. First, market failures of various kinds mean that the actual market outcomes are not allocatively efficient. Second, achieving efficiency does not guarantee either inter- or intragenerational equity, both of which are essential features of sustainable development. Hence, aiming for sustainable development requires more than correcting market failure.