The economics of climate change and the theory of discounting

Année de publication



Energy Policy 1999 27 913 927 15


Abstract: This paper confronts the theory of discounting with climate change economics. Standard discounting would give long-term damages a very low present value. On the other hand, low discount rates would imply more sacrifices for present generations, although future generations may be richer. And using multiple rates would lead to economic inefficiencies. The paper first shows that arguments favouring a low or zero discount rate in general are weak, even from an ethical point of view. It goes on by considering different arguments in favour of discount rates decreasing over time, and by recalling the argument that non-reproducible environmental assets should be given a value growing over time. Through the example of climate change, it finally shows that the latter argument not only implies that the costs of damages associated to climate change should not be underestimated, but also reinforce the legitimacy of using decreasing discount rates.

Type de publication
  • journal
Type de document
  • research-article
Classification - Inist-CNRS
  • 1 - sciences humaines et sociales
Classification - Scopus
  • 1 - Physical Sciences
  • 2 - Environmental Science
  • 3 - Management, Monitoring, Policy and Law
  • 2 - Energy
  • 3 - General Energy
Classification - Science Metrix
  • 1 - applied sciences
  • 2 - enabling & strategic technologies
  • 3 - energy
Classification - Clarivate Analytics (Subject Category)
  • 1 - social science
  • 2 - environmental studies
  • 1 - science
  • 2 - environmental sciences
  • 2 - energy & fuels
Termes extraits

discount rate; climate change; future generations; present value; discounting; krutilla; weitzman; growth rate; economic growth; philibert energy policy; present generation; pure preference; discount rates; intergenerational; rabl; cline; philibert; social rate; environmental assets; economic analysis; environmental spending; marginal utility; environmental goods; intergenerational equity; extinct species; quarterly journal; public goods; environmental damage; environmental economics; time preference; environmental preservation; natural assets; pure time preference; global warming; interest rate; marginal rate; future generation; wellbeing; franc; environmental; long term; other words; future consumption; private investment; income elasticity; discount; extinct; capita income; marginal investment; social discount rate; human morbidity; technical progress; free market; same rate; unlimited responsibility; growth rates; time frame; economic growth rate; irving fisher; isolation paradox; gross world product; natural resources; environmental values; environmental preference; martin weitzman; market values; environmental costs; favour; biscuit; damages; preference; fisher; same pace; productive capacity; elsevier science; environmental draga; real income; marginal return; human action; physical limits; thomas sterner; exponential growth; logistical growth; future values; human ingenuity; present consumption; distant future; high rate; immediate consumption; investment opportunity; future costs; impatience rate; atmospheric concentrations; future value; other people; logarithmic utility function; conventional rate; lower rate; irreplaceable nature; technological progress; natural phenomena; economic theory; present generations; second assessment report; initial investment cost; public gooda; carbon dioxide; consumer wellbeing; private goods; successive generations; normative domination; opportunity cost; unit prices; general discount rate; such goods; external costs; cost analysis; time horizon; economic journal; marcel proposal; normative value; real cost; human life; other damages; marginal income utility; lower value; time interval; external cost; economic development; public investments; public policies; optimal rate; washington april; ecological economics; absolute value

Entité nommée
Entité nommée - Emplacement géographique
  • Kyoto
  • United States
Entité nommée - Organisme
  • World Bank
  • American and French
  • United Nations Environment Programme
  • Environmental Protection Agency
  • Elsevier Science Ltd.
  • International Energy Agency
Entité nommée - Personne
Martin Weitzman; Rabl; Irving Fisher; Olivier Godard; Paris Cedex; Paul Ricvur; John Rawls; Weitzman; A. C. Fisher; John Broome; Gordon Tullock; Kenneth Arrow; Marcel Boiteux; C. J. Cicchetti; Thomas Sterner; Christian Gollier; Marglin; Now; Ari Rabl; C. Philibert; A. W. Tucker; William Cline
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