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Title:Sacrifice, discounting and climate policy : five questions PDF Logo
Authors:Karp , Larry S.
Issue Date:2009
Series/Report no.:CESifo working paper 2761
Abstract:I offer a selective review of discounting and climate policy. Analytic and numerical models show that different assumptions greatly change the degree to which decisions about climate policy depend on the discount rate. I discuss a claim that standard models exaggerate the current generation's sacrifices needed to internalize climate damages. This claim, if correct, affects the role of discounting. I argue that the assertion that the risk of catastrophic damage overwhelms discounting is unfounded. I show that the claim that we view the world in perspective” implies hyperbolic rather than constant discounting. climate change ; discounting ; intergenerational conflict ; catastrophic risk ; hyperbolic discounting
JEL:C61
C73
D63
D99
Q54
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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