World Economics - Insight , Analysis and Data
World Economics Journal
Crime & corruption
Economic indicators and forecasting
Gross Domestic Product (GDP)
Savings and debt
Exchange Rate Policy
Labour Market Reform
Law and Justice
Food and Agriculture
Media, Sport and Entertainment
Retail and Consumer Goods
World Economics Journal Archive
Browse the complete World Economics Journal archive.
World Economics Authors
Biographies and contact details for all authors.
Full list of executive editors and our advisory board
Submit an Article
Details and notes for authors regarding journal submissions.
Journal Subscription Information
Subscribe to the journal online.
About World Economics
History and information about the site.
Useful numbers and contact details.
Terms & Conditions
Ethics of the Discount Rate in the Stern Review on the Economics of Climate Change
World Economics, March 2007
Any comparison of the costs and benefits of climate change is dominated by the chosen discount rate. But, although the Stern Review emphasises the ethical nature of the parameters entering into its choice of a relatively low discount rate, its discussion of the ‘pure time preference’ parameter is unbalanced. In particular, no consideration is given to the role of ‘agent-relative ethics’, which (i) has a wellestablished philosophical pedigree going back to David Hume; (ii) is likely to correspond closely to world-wide public attitudes towards intergenerational welfare; and (iii) would entail discounting a unit of welfare accruing to future generations compared to an equal unit accruing to people alive today at a positive rate. The authors also discuss the other ethical parameter upon which the discount rate depends, namely the elasticity of marginal utility with respect to consumption. In the conventional model, this simultaneously reflects different aspects of inequality aversion as well as risk aversion, which complicates its interpretation. Finally, they discuss the divergence between market rates of discount and the low rate chosen in the Review, and the limitations—on the one hand—on the normative significance of market rates, as well as the danger—on the other hand—of relying on rates chosen by elites or philosopher kings.
Are There Limits to Green Growth?
Edward B. Barbier
World Economics, September 2015
Measuring Natural Capital
World Economics, December 2014
How to Reduce Carbon Emissions Equitably
World Economics, March 2014
Keep updated with:
Posts from Facebook
Tweets from Twitter
Groups on LinkedIn
Alerts from RSS feed
Copyright World Economics Ltd. 2016