1995/04/01 by Robert C. Lind · 3 citations
Economics, Econometrics and Finance · Energy · #Climate Change Policy and Economics #Fiscal Policy and Economic Growth #Energy, Environment, and Transportation Policies
paper · doi:10.1016/0301-4215(95)90162-z
openalex publication_date 1995/04/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/04/05
When public policies with impacts far into the future are being debated, the question inevitably is raised whether cost-benefit analysis which discounts future costs and benefits is not biased against future generations and whether, if such discounting is appropriate at all, a lower rate should be used to avoid such bias. The debate on global climate change is no exception. This paper sketches and analyses the welfare foundations of cost-benefit analysis and from this perspective analyses the role of cost-benefit analysis in the climate policy debate, particularly with reference to intergenerational effects. The paper concludes that the cost-benefit criterion cannot provide a definitive basis for deciding whether we should commit to a longer-term programme to moderate climate change; the issues of intergenerational equity are not that global climate change will significantly lower the GNP of future generations, but relate to the possibility of science fiction-like changes in the planet that will produce catastrophic effects in the future; and the typical way in which the cost-benefit problem is posed obscures the basic choices that we should be evaluating.