Authors
Fabien Medvecky
University of Sydney
Abstract
A central point of debate over environmental policies concerns how future costs and benefits should be assessed. The most commonly used method for assessing the value of future costs and benefits is economic discounting. One often-cited justification for discounting is uncertainty. More specifically, it is risk aversion coupled with the expectation that future prospects are more risky. In this paper I argue that there are at least two reasons for disputing the use of risk aversion as a justification for discounting when dealing with longterm decisions, one technical and one ethical. Firstly, I argue that technically, it implies an inconsistency between theory and practice. And secondly, I argue that discounting for uncertainty relies on a form of individualism which, while reasonable in standard microeconomic theory where an agent chooses how to spread her own consumption over her own lifetime, is inappropriate in the context of intergenerational social decisions
Keywords Discount rate   Risk aversion   Uncertainty   Inter-generational justice   Economics   Environmental decisions
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DOI 10.23941/ejpe.v5i1.91
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References found in this work BETA

Political Liberalism.John Rawls - 1993 - Columbia University Press.
Just Health: Meeting Health Needs Fairly.Norman Daniels - 2007 - Cambridge University Press.

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Citations of this work BETA

Values in Time Discounting.Conrad Heilmann - 2017 - Science and Engineering Ethics 23 (5):1333-1349.

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