Intergenerational and International Discounting

Thomas Schelling

Risk Analysis, 2000, vol. 20, issue 6, 833-838

Abstract: A discount rate for the consumption of future generations is typically composed of two parts. One is a “pure” time preference for immediate over postponed consumption, the other a declining marginal utility as consumption increases. The costs of greenhouse abatement, however, for at least the first 50 years, will be borne by the developed countries; the benefits will accrue to the presently undeveloped. Pure time preference always relates to one's own consumption; it has no relevance here. Consumption transfers over time will be from richer to poorer, from lower to higher marginal utility. It is a foreign aid program and it ought to have to compete with more direct foreign aid, which can benefit the very poor rather than their much‐better‐off descendants.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:20:y:2000:i:6:p:833-838

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