Valuing the Future
Recent advances in social discounting
• Author(s): David Pearce, Ben Groom, Cameron Hepburn & Phoebe Koundouri
• Published: June 2003
• Pages in paper: 22
Abstract
One of the most controversial areas of economics is the practice of discounting:
attaching a lower weight to future costs and benefits than present costs and
benefits. Discounting appears to offend notions of sustainable development and
the interests of future generations. Recent advances in the theory of discounting
hold out strong hope that the ‘tyranny of discounting’ can be avoided through the
use of time varying discount rates (TVDRs). This paper reviews the recent
rationales for TVDRs and applies the results to issues such as nuclear power and
global warming control.
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