Discounting And Climate Change Policy
AbstractA constant social discount rate cannot reflect both a reasonable opportunity cost of public funds and an ethically defensible concern for generations in the distant future. We use a model of hyperbolic discounting that achieves both goals. We imbed this discounting model in a simple climate change model to calculate constant equivalent discount rates" and plausible levels of expenditure to control climate change. We compare these results to discounting assumptions and policy recommendations in the Stern Review on Climate Change.
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Bibliographic InfoPaper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 7149.
Date of creation: 2007
Date of revision:
Contact details of provider:
Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
Web page: http://departments.agri.huji.ac.il/economics/indexe.html
More information through EDIRC
discounting; climate change modeling; Stern Review; Markov Perfect Equilibria; Environmental Economics and Policy; C61; C73; D63; D99; Q54;
Other versions of this item:
- Karp, Larry & Tsur, Yacov, 2007. "Discounting and climate change policy," CUDARE Working Paper Series 1038, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Karp, Larry & Tsur, Yacov, 2007. "Discounting and Climate Change Policy," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5sm6j36x, Department of Agricultural & Resource Economics, UC Berkeley.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D99 - Microeconomics - - Intertemporal Choice - - - Other
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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.:
- William D. Nordhaus, 2006. "The "Stern Review" on the Economics of Climate Change," NBER Working Papers 12741, National Bureau of Economic Research, Inc.
- Tsur, Yacov & Zemel, Amos, 1996. "Accounting for global warming risks: Resource management under event uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1289-1305.
- Karp, Larry, 2004.
"Global Warming and Hyperbolic Discounting,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt5zh730nc, Department of Agricultural & Resource Economics, UC Berkeley.
- Cropper, Maureen L & Aydede, Sema K & Portney, Paul R, 1994. "Preferences for Life Saving Programs: How the Public Discounts Time and Age," Journal of Risk and Uncertainty, Springer, vol. 8(3), pages 243-65, May.
- Robert J. Barro, 1999. "Ramsey Meets Laibson In The Neoclassical Growth Model," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1125-1152, November.
- Karp, Larry S. & Tsur, Yacov, 2007.
"Climate Policy When The Distant Future Matters: Catastrophic Events With Hyperbolic Discounting,"
7181, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
- Karp, Larry & Tsur, Yacov, 2007. "Climate policy when the distant future matters : catastrophic events with hyperbolic discounting," CUDARE Working Paper Series 1037, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Karp, Larry & Tsur, Yacov, 2007. "Climate Policy When the Distant Future Matters: Catastrophic Events with Hyperbolic Discounting," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt99n7v1bp, Department of Agricultural & Resource Economics, UC Berkeley.
- 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.
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