| Abstract: | Economic interpretations of sustainable development have concentrated on the need to maintain the aggregate capital stock intact, so as to ensure a constant stream of welfare through time. A sectoral approach to sustainability, in terms of this model, will be justified if substitution possibilities between that sector and the rest of the economy are limited. This assumption is examined in relation to the water sector, and it is found that further assumptions about substitution possibilities need to be made within the sector itself. Suggestions are offered as to how such substitutions might be made to advantage, which is contrasted to recent water management practices in England and Wales. It is argued that assumptions about substitution possibilities are in general overly restrictive, with the result that sustainability objectives fall short of optimum levels that could be achieved. |
