Sustainable Development and Sustainable Income from Alaska's Resources

Abstract

I consider the definition and measurement of sustainable development for a resource rich region such as Alaska, reviewing the evolution of so-called green accounting and discussing appropriate applications to small open regional economies. I then investigate how much of the rapid economic growth Alaska experienced in the three decades following passage of the Alaska Native Claims Settlement Act (ANCSA) constituted sustainable development. Estimates of sustainable income suggest that even after adjusting for depletion of nonrenewable resources, the state’s economy was nearly three times larger at the end of the 1990s than it had been in 1971. Although oil assets declined, tourism, air cargo, and other sustainable industries grew, as did income from state savings accounts set aside from petroleum revenues. Despite the growth of Native corporations created under ANCSA, the locally controlled portion of Alaska's economy continues to decline.