Climate policy under sustainable discounted utilitarianism

Simon Dietz and Geir Asheim

No 42, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: Empirical evaluation of policies to mitigate climate chagne has been largely confined to the application of discounted utilitarianism (DU). DU is controversial, both due to the conditions through which it is justified and due to its consequences for climate policies, where the discounting of future utility gains from present abatement efforts makes it harder for such measures to justify their present costs. In this paer, we propose sustainable discounted utilitarianism (SDU) as an alternative principle for evaluation of climate policy. Unlike undiscounted utilitarianism, which always assigns zero relative weight to present utility, SUD is an axiomatically based criterion, which departs from DU by assigning zer weight to present utility if and only if the present is better off than the future. Using the DICE integrated assessment model to run risk analysis, we show that it is possible for the future to be worse off than the present along a "business as usual" development path. Consequently SDU adn DU differ, and willingness to pay for emissions reductions is (sometimes significantly) higher under SDU than under DU. Under SDU, stringent schedules of emissions reductions increase social welfare, even for a relatively high utility discount rate.

Date: 2011-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.lse.ac.uk/GranthamInstitute/wp-content/ ... y-utilitarianism.pdf (application/pdf)

Related works:
Journal Article: Climate policy under sustainable discounted utilitarianism (2012)
Working Paper: Climate Policy under Sustainable Discounted Utilitarianism (2011)
Working Paper: Climate policy under sustainable discounted utilitarianism (2011)
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:lsg:lsgwps:wp42

Access Statistics for this paper

More papers in GRI Working Papers from Grantham Research Institute on Climate Change and the Environment Contact information at EDIRC.
Bibliographic data for series maintained by The GRI Administration ().