Policymaking for posterity
AbstractPolicymaking for posterity involves current decisions with distant consequences. Contrary to conventional prescriptions, we conclude that the greater wealth of future generations may strengthen the case for preserving environmental amenities; lower discount rates should be applied to the far future, and special effort should be made to avoid actions that impose costs on future generations. Posterity brings great uncertainties. Even massive losses, such as human extinction, however, do not merit infinite negative utility. Given learning, greater uncertainties about damages could increase or decrease the optimal level of current mitigation activities. Policies for posterity should anticipate effects on: alternative investments, both public and private; the actions of other nations; and the behaviors of future generations. Such effects may surprise. This analysis blends traditional public finance and behavioral economics with a number of hypothetical choice problems.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 37 (2008)
Issue (Month): 2 (December)
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Web page: http://www.springerlink.com/link.asp?id=100299
Discounting; Posterity; Altruism; Comet problem; Trolley problem; Climate change; Global warming; Uncertainty; Learning; Reaction function; D90; D64; Q54; D81;
Other versions of this item:
- Summers, Lawrence & Zeckhauser, Richard, 2008. "Policymaking for Posterity," Working Paper Series rwp08-040, Harvard University, John F. Kennedy School of Government.
- Lawrence H. Summers & Richard J. Zeckhauser, 2008. "Policymaking for Posterity," NBER Working Papers 14359, National Bureau of Economic Research, Inc.
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D90 - Microeconomics - - Intertemporal Choice - - - General
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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