How Can Pure Social Discounting be Ethically Justified?

22 Pages Posted: 16 Feb 2013

See all articles by Wolfgang Buchholz

Wolfgang Buchholz

Universitaet Regensburg; CESifo (Center for Economic Studies and Ifo Institute)

Michael Schymura

ZEW – Leibniz Centre for European Economic Research

Date Written: 2013

Abstract

The evaluation of long-term effects of climate change in cost-benefit analysis has a long tradition in environmental economics. Since the publication of the Stern Review in 2006 the debate about the "appropriate" discounting of future welfare and utility levels was revived and the most renowned scholars of the profession participated in this debate. In two recent contributions in Environmental and Resource Economics, there was dispute about intertemporal welfare economics between Partha Dasgupta and John Roemer about the correct interpretation of the topic. The aim of this work is to bring together economic and philosophical reasoning about justice and intergenerational equity in the context of climate change. So we adopt the normative view in order to present the most important ethical issues that, particularly in the context of climate policy, are most relevant for the choice of intertemporal discounting. Subsequently we explore whether ethical considerations may also be helpful to justify pure social discounting per se.

Keywords: Intertemporal Ethics, Distribution, Discounting, Climate Change

JEL Classification: Q53

Suggested Citation

Buchholz, Wolfgang and Schymura, Michael, How Can Pure Social Discounting be Ethically Justified? (2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-008, Available at SSRN: https://ssrn.com/abstract=2217499 or http://dx.doi.org/10.2139/ssrn.2217499

Wolfgang Buchholz

Universitaet Regensburg ( email )

D-93040 Regensburg, 93053
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Michael Schymura (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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