Pricing the Planet's Future

By Christian Gollier. 2012

234 citations recorded by the source corpus.

Our path of economic development has generated a growing list of environmental problems including the disposal of nuclear waste, exhaustion of natural resources, loss of biodiversity, climate change, and polluted land, air, and water. All these environmental problems raise the crucial challenge of determining what we should and should not do for future generations. It is also central to other policy debates, including, for example, the appropriate level of public debt, investment in public infrastructure, investment in education, and the level of funding for pension benefits and for research and development. Today, the judge, the citizen, the politician, and the entrepreneur are concerned with the sustainability of our development. The objective of Pricing the Planet's Future is to provide a simple framework to organize the debate on what we should do for the future. A key element of analysis by economists is the discount rate--the minimum rate of return required from an investment project to make it desirable to implement. Christian Gollier outlines the basic theory of the discount rate and the various arguments that favor using a smaller discount rate for more distant cash flows. With principles that can be applied to many policy areas, Pricing the Planet's Future offers an ideal framework for dynamic problems and decision making.

Subfields: Economics and Econometrics, Finance, Management, Monitoring, Policy and Law

View Paper: https://www.semanticscholar.org/paper/8a434a884c1dcd569ddd655a97c40f654da9aba3

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Citations in the corpus

Estimating economic damage from climate change in the United States (2017, background): “Climate change increases the unpredictability and between-county inequality of future economic outcomes, effects that may alter the valuation of climate damages beyond their nationally averaged expected costs (45).”
Sovereign bond yield spreads and sustainability: An empirical analysis of OECD countries (2019, background): “It might be that financial markets have more appreciation for the latter than the former because many market participants highly discount the future (Gollier, 2013; Zingales, 2015).”
Reflections Uncertainty and Decision Making in Climate Change Economics (2014, background): “Hence if there is uncertainty about future economic growth rates g, then there is also uncertainty about how to discount future changes in consumption (Arrow et al. 2012; Gollier 2012) and thus the benefits of climate policy.”
Pricing Uncertainty Induced by Climate Change (2020, background): “A detailed version of such an exploration is provided in Gollier (2013), including references to ambiguity aversion as a motivation for wanting to alter discount rates.”
Should Governments Use a Declining Discount Rate in Project Analysis? (2014, background): “…rate, is the utility rate of discount, is the elasticity of the marginal utility of consumption, and gt is the rate of growth in consumption between t and the present. conditions under which uncertainty in the rate of consumption growth can lead to a DDR (see Gollier 2012 for an extended survey).”
The Long-Run Discount Rate Controversy (2014, background): “An alternative road to reconciliation is examined by Gollier (2008, 2012).”