The focus of the analysis is national, not global, sustainability, so that if the foreign share of the national capital base is increasing, as in the case of the US, it detracts from sustainability. The wealth measure of well-being is the entire stream of future goods and services that can be delivered by current assets, rather than the current flow of income. Consequently, any rise in the future cost of a good or services, for example of fossil fuels because of depletion of stocks, is taken into account. Also, a future increase in prices of resources that are primarily owned by foreigners detracts from national sustainability.

Applying this framework to the data from China and the US, the authors conclude that both nations are experiencing sustainable growth, although their true growth rates are lower than their reported rates. In the US increases in human and (to a lesser extent) physical capital outweigh the adverse wealth effects from natural resource depletion and high oil prices. In China, investments in reproducible capital (after all China invests nearly half its GDP!) contribute the most to increases in wealth, although increases in human capital and technological progress also play a significant role. Nevertheless, in contrast to conventional GDP growth rates of 4.44 per cent and 7.38 per cent in the US and China during 1995-2000, the growth rates of comprehensive wealth were considerably lower at 1.43 per cent and 3.24 respectively in the two countries.

Kirit Parikh’s paper on India took a very different approach. The paper projected total requirements of commercial and non-commercial energy for sustaining a rate of growth of GDP at 8 per cent between 2006-07 and 2031-32. Eleven energy supply scenarios were considered, including a very optimistic scenario for nuclear power generation. It found that, at 8 per cent sustained annual growth, the Indian economy can easily generate the investment resources for meeting its projected energy requirements.

... contd.