The Worst-Case Scenario and Discounting the Very Long Term

El Hadji Fall

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: We propose an ethical viewpoint based on the possibility of the realization of the worst-case scenario in order to reduce future generations risks in terms of discounting. Applied to the question of conservation of a renewable resource, we show that an economy, where the social planner takes into account the possibility that at an uncertain date the discount rate could change to its minimum possible value, could lead to a better conservation of the resource and modify the position of the sacrificed generations. Finally, our model suggests to apply the lowest possible discount rate immediately for long term environmental projects

Keywords: Discounting; environment; uncertainty; preservation of natural resources; intergenerational equity (search for similar items in EconPapers)
JEL-codes: D80 O4 Q2 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2006-01
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Worst-Case Scenario and Discounting the Very Long Term (2006)
Working Paper: The Worst-Case Scenario and Discounting the Very Long Term (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:v06005

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