Discounting climate change

By Partha Dasgupta. 2008

331 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Global and Planetary Change, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/20fa287678b266322a262ff2d30927cc90d87cd3

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Citations in the corpus

Developing a Social Cost of Carbon for US Regulatory Analysis: A Methodology and Interpretation (2013, background): “The literature generally adopts values forZ in the range of 0.5 to 3, with a clustering around 2 (Arrow 2007; Dasgupta 2007, 2008; Hall and Jones 2007; Nordhaus 2009; Szpiro 1986; Weitzman 2007, 2009).”
Coastal and marine ecosystem services valuation for policy and management: Managed realignment case studies in England (2011, background): “There is in the economic literature an ongoing debate around the correct discount rate to be applied in the social appraisal of long-term environmental projects which has not reached a satisfactory conclusion (Broome, 1995; Dasgupta, 2008; Frederick et al., 2002).”
The Stern Review and its critics: economics at work in an interdisciplinary setting (2011, background): “In a brief review, Dasgupta's ( 2007 ) major point is that there are two, not one, fundamental ethical parameters in the Ramsey equation.”
How Should the Distant Future Be Discounted When Discount Rates are Uncertain? (2010, background): “! . ( 2 ) Accepting the above logic, it follows that the investment should be made (incurring a marginal cost δ now, at time 0−, in order to yield a marginal benefit �at future time t )i f and”
Estimating the social cost of non-CO2 GHG emissions: Methane and nitrous oxide (2012, methodology): “Furthermore, many of the previous estimates (Kandlikar (1995), Hammitt et al. (1996), and Tol et al. (2003)) were based on reference scenarios that are nearly 20 years old and have now been superseded by newer studies (Houghton et al. (1992), and Nakicenovic and Swart (2000)).”
Should We Require Every New Venture to Be a Hybrid Organization (2016, background): “…concede that climate change is occurring and that it is anthropogenic but debate its quality, claiming that the inaction is preferable to action (Stern, 2007), or that future generations will be better positioned to absorb the costs of addressing the issue (Broome, 2008; Dasgupta, 2008).”
Climate change impacts on the biophysics and economics of world fisheries (2011, background): “In view of the range of benefits fisheries resources are capable of providing, the choice of discount rates becomes an extremely critical issue in formulating and evaluating conservation and management policy to address climate chang”
The Welfare Economic Theory of Green National Accounts (2008, background): “For the corresponding result when time is discrete, see Dasgupta (2008).”
Scientific Ambiguity and Climate Policy (2013, background): “The lower value is justified on ethical grounds, and represents recent viewpoints by, for example, Stern (2008), Dasgupta (2008), and Heal (2009).”