Climate policies deserve a negative discount rate

Marc Fleurbaey 1, 2 Stéphane Zuber 3
3 Le Collège d\'études mondiales
CERSES - UMR 8137 - Centre de recherche sens, ethique, société, Le Collège d'études mondiales/FMSH
Abstract : We defend a methodology of discounting, for the evaluation of the long-term effects of climate policies, which relies on a social welfare objective, against the view that the market rate of return should be used for that purpose. We also show that in the long run, the discount rate for such policies should focus on the worst-case scenario for the most disadvantaged populations. As a consequence, it is likely that the appropriate discount rate for climate policies should be negative, implying a high priority for the future.
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Submitted on : Wednesday, September 5, 2012 - 10:07:21 AM
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Marc Fleurbaey, Stéphane Zuber. Climate policies deserve a negative discount rate. 2012. ⟨halshs-00728193⟩

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