Social Project Appraisal and Discounting for the Very Long Term
AbstractThis paper considers the issue of discounting in relation to the appraisal of very long-term social projects. This is an increasingly important matter given the growing concerns over the environmental and safety impacts of many projects on future generations. Standard discounting practice trivialises the welfare impacts of projected costs and benefits on future populations, so a credible alternative procedure is required to avoid this 'write-off'. The British Treasury bases its published long-term discount factors on uncertainty concerning the value of the discount rate, although the factor values it has published seem inappropriate. The nature of this problem is examined and an alternative set of discount factors is presented for consideration. Additionally, a further set of factors is proposed for possible policy application in developed countries in cases where social project welfare impacts are not related to income. This new set is based only on uncertainty in the utility discount rate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Economic Issues in its journal Economic Issues.
Volume (Year): 13 (2008)
Issue (Month): 1 (March)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
- Graciela Chichilnisky, 1997. "What Is Sustainable Development?," Land Economics, University of Wisconsin Press, vol. 73(4), pages 467-491.
- Michael Spackman, 2004. "Time discounting and of the cost of capital in government," Fiscal Studies, Institute for Fiscal Studies, vol. 25(4), pages 467-518, December.
- Martin L. Weitzman, 1998.
Harvard Institute of Economic Research Working Papers
1843, Harvard - Institute of Economic Research.
- Pollitt, M., 2010. "Green Values in Communities: How and why to engage individuals with decarbonisation targets," ESRC Centre for Business Research - Working Papers wp398, ESRC Centre for Business Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dan Wheatley).
If references are entirely missing, you can add them using this form.