by Larry Karp
- I provide a selective review of discounting and climate policy. After reviewing evidence on the importance of the discount rate in setting policy, I ask whether standard models tend to exaggerate the sacrifices that the current generation needs to undertake in order to internalize climate damages. I then consider whether the risk of catastrophic damage really overwhelms discounting, in the determination of optimal policy. I revisit the question of how we actually think about the distant future.
Karp, L. (2009). "Sacrifice, Discounting and Climate Policy: Five Questions." Department of Agricultural & Resource Economics, UCB. CUDARE Working Paper 1086, June 2009.
