Friday, July 9, 2010

Do Conservatives Discount Future Harm from Climate Change and Government Debt at Different Rates?

One of the conservative arguments against making substantial present investments in climate change mitigation is that future generations will be materially better off than present generations because of economic growth; they will have more resources for coping with climate change. Therefore, present generations do not need to make substantial sacrifices to avoid climate change for the benefit of future generations (see, e.g., here).

One of the conservative arguments against additional government stimulus of the economy is that the debt burden will be imposed on our children and grandchildren, which is unfair to them (see, e.g., here). There is no acknowledgement that future generations might be better able to deal with the debt because of higher living standards from economic growth, compared to current generations living through a recessionary period.

Can these two conservative positions be reconciled in a consistent analysis with a single social discount rate?

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