Discounting Climate Change

Summer School on Global Sustainability Home Faculty Participants U.S. Visa Requirements Travel Logistics Schedule Lectures Slides Supplemental Readings Tutorials After Hours Photos Blog Projects & Working Groups Working Group Wiki Page Lecture Notes & Analysis Research Agendas

Abstract:

In this paper I offer a fairly complete account of the idea of social discount rates as applied to public policy analysis. I show that those rates are neither ethical primitives nor observables as market rates of return on investment, but that they ought instead to be derived from economic forecasts and society's conception of distributive justice concerning the allocation of goods and services across personal identities, time, and events. However, I also show that if future uncertainties are large, the formulation of intergenerational well-being we economists have grown used to could lead to ethical paradoxes even if the uncertainties are thin-tailed. Various modelling avenues that offer a way out of the dilemma are discussed. None is entirely satisfactory.

Please review the following paper before the lecture:

• Discounting Climate Change