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{"id":8715,"date":"2014-03-11T15:46:54","date_gmt":"2014-03-11T15:46:54","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&p=8715"},"modified":"2024-08-19T14:59:44","modified_gmt":"2024-08-19T13:59:44","slug":"agreeing-to-disagree-on-climate-policy","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/agreeing-to-disagree-on-climate-policy\/","title":{"rendered":"Agreeing to disagree on climate policy"},"content":{"rendered":"\n

Proceedings of the National Academy of Sciences of the USA. Link to external paper

Disagree<\/span>ments about the value of the utility discount rate—the rate at which our con<\/span>cern for the welfare of future people declines with their distance from us in time—are at the heart of the debate about the appropriate intensity of climate<\/span> policy<\/span>. Seemingly small differences in the discount rate yield very different policy<\/span> prescription<\/span>s, and no con<\/span>sensus “correct” value has been identified. We argue that the choice of discount rate is an ethical primitive: there are many different legitimate opinion<\/span>s as to<\/span> its value, and non<\/span>e should receive a privileged place in econ<\/span>omic analysis of climate<\/span> policy<\/span>. Rather, we advocate a social choice-based approach in which a diverse set of individual discount rates is aggregated into<\/span> a “representative” rate. We show that performing this aggregation<\/span> efficiently leads to<\/span> a time-dependent discount rate that declines mon<\/span>oto<\/span>nically to<\/span> the lowest rate in the population<\/span>. We apply this discounting scheme to<\/span> calculation<\/span>s of the social cost of carbon<\/span> recently performed by the US government and show that it provides an attractive compromise between competing ethical position<\/span>s, and thus provides a possible resolution<\/span> to<\/span> the ethical impasse in climate<\/span> change econ<\/span>omics.<\/p>\n

Geoffrey Heal & Antony Millner<\/p>\n\n","protected":false},"excerpt":{"rendered":"\n