Discounting Across Generations: Necessary, not Suspect

Richard B. Belzer

Risk Analysis, 2000, vol. 20, issue 6, 779-792

Abstract: Periodically, ethical objections are raised against the practice of discounting for future effects. Concerns about the potential effects on future generations from long‐term nuclear waste disposal and global climate change have caused these ethical objections to recur. This article rebuts the various ethical objections to future discounting on practical, ethical, and analytic grounds. Discounting for future effects is a ubiquitous practice that cannot be practically prevented. In the event that public policy would dictate against future discounting in public decisions, such a constraint could never be successfully imposed on markets. Market values will always reflect the full, discounted streams of future effects even if governments prohibited the practice among individuals. Ethically, there is no basis for choosing an upper‐bound time horizon beyond which discounting should be rejected. Any proposed horizon is arbitrary and has no obvious foundation. All decisions are fundamentally irreversible, so opponents of future discounting also must define a degree of irreversibility beyond which normal discounting should not apply, and defend on ethical grounds the basis for this demarcation. This task is further complicated by the likelihood that choices are rarely, if ever, as irreversible as opponents suggest. Typical examples given to prove future discounting is inappropriate overstate the degree of irreversibility actually present and understate subsequent opportunities for modifications. Finally, opposition to distant‐future discounting on the ground that burdens are shifted to future generations must face the fact that such shifts are characteristic of intergenerational transfers now practiced widely and with great public support.

Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/0272-4332.206072

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:20:y:2000:i:6:p:779-792

Access Statistics for this article

More articles in Risk Analysis from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().