Discounting the very distant future

Stefano Giglio, Matteo Maggiori, Johannes Stroebel 21 June 2014

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Many important policy decisions require a consideration of costs and benefits that arise in the distant future. For example, many of the costs of climate change occur 100 or more years from now, yet actions to reduce greenhouse gas emissions have to be taken today to avert those long-run costs. In recent weeks, the Intergovernmental Panel on Climate Change mitigation report, or UN climate change report, presented and discussed different options for reducing such emissions, but contended that “most mitigation strategies have costs in the present and yield benefits in the future.

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Topics:  Environment Financial markets

Tags:  long-run discount rates

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