Ecological intuition versus economic "reason"

Olivier Guéant, Roger Guesnerie () and Jean-Michel Lasry
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Jean-Michel Lasry: CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper discusses the discount rate to be used in projects aimed at preserving the environment. The model has two different goods: one is the usual consumption good whose production may increase exponentially, and the other is an environmental good whose quality remains limited. The stylized world we describe is fully determined by four parameters, reflecting basic preferences, "ecological" and intergenerational concerns, and feasibility constraints. We define an ecological discount rate and examine its connections with the usual interest rate and the optimized growth rate. We discuss, in this simple world, different forms of the precautionary principle.

Date: 2012
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Citations: View citations in EconPapers (6)

Published in Journal of Public Economic Theory, 2012, 14 (2), pp.245-272. ⟨10.1111/j.1467-9779.2011.01541.x⟩

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Related works:
Journal Article: Ecological Intuition versus Economic “Reason” (2012)
Working Paper: Ecological intuition versus economic "reason" (2012)
Working Paper: Ecological intuition versus economic "reason" (2009)
Working Paper: Ecological intuition versus economic "reason" (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754612

DOI: 10.1111/j.1467-9779.2011.01541.x

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