Climate Change Economics is an excellent, thoroughgoing look at the economics of climate change mitigation. Aimed at legislators and people interested in policy implications of climate change, CCE offers a series of well-organized directories of white papers and technical information from a variety of sources for people trying to understand why it makes good economic sense to take immediate, drastic measures to curb emissions and mitigate the effects of anthropogenic climate change.
In practice, economists' analyses of the effects of climate change and the positive and negative returns to mitigation efforts have generally come to agree that a constant discount rate is not appropriate, and that the rate must generally decline over time. They do NOT agree on a rate at which to start the calculations, nor on the way in which the rate should be reduced over time.
Climate Change Economics: LOWERING CARBON INTENSITIES, NOT STANDARDS OF LIVING
Looking back at the table, it is obvious that the rate that applies at first - and how long it applies - will play a major role in the prevent value derived. Using a 5% rate for the first decade, for example, would leave under 62% of the FV in the PV, even if the discount rate used for the rest of time was zero. That is why many analysts claim that the discount rate for possibly catastrophic outcomes (possible but not known) should be negative relative to the known investment results, which would push calculations of PVs toward using the 0.6% rate rather than in the direction of the 7% rate.
This argument is not based on risk alone, which is what is used in investment analysis, but on the combination of risk and uncertainty, factors that combine to shape all forecasts, but especially those of processes and events about which we know relatively little, such as the processes of global climate change and species survival and extinction.
So the question of the initial discount rate used, and why it is used, is central to any analysis of the economics of climate change and alternative policies intended to slow the growth of greenhouse gasses.
New research on trends in adult human height over the last century confirm that, no surprise, humans are getting taller overall due to better nutrition and disease control. However according to the health science group Non-Communicable Diseases Risk Factor Collaboration (NCD-RisC), the gain in adult height varies dramatically by country. From their paper, published in […]
Between April and July, Iran’s salty Lake Urmia changed from a bright green color to a blood red. NASA’s Aqua satellite captured the image above and reported on the science behind the strange transformation. According to NASA, the periodic color change is caused by micro algae producing carotenoids that help with photosynthesis and act as […]
In the late 1960s and 1970s, the mind-expanding modus operandi of the counterculture spread into the realm of science, and shit got wonderfully weird. Neurophysiologist John Lilly tried to talk with dolphins. Physicist Peter Phillips launched a parapsychology lab at Washington University. Princeton physicist Gerard O’Neill became an evangelist for space colonies. Groovy Science: Knowledge, […]
It’s one thing to enjoy dinner at home and a nice glass of Cabernet Sauvignon with your best friend, Netflix, but it’s another thing entirely to make that meal from scratch and get that wine delivered right to your doorstep.But what if we told you there’s a way to make this possible? To keep your social life, […]
Having to pack and drag your stuff through security can put quite the damper on your vacation plans. Thankfully, we’ve got your back with one way to make traveling more painless: the Jumper Overnighter Travel Bag.This compact bag is so lightweight that you can effortlessly carry it, and fit it into any overhead compartment. But just […]
Learning is a 24/7/365 proposition, and it never ends. And if you’re truly serious about leveling up your skill sets and career prospects, get a subscription to Stone River Academy’s massive course collection. This offer normally is worth over $1,400, but is now available for just $89 in the Boing Boing Store.A respected name in information technology […]