Climate Change and Our Discount Rate

Those of us who think about climate change often imagine ourselves in this scenario: we live long enough to experience some extremely severe effects of global warming, perhaps a rise in sea levels that has forced whole populations to abandon their native lands, or acute food shortages due to desertification. At that point, a young person with her whole miserable life in front of her confronts us: “You knew this was happening, and you could have prevented it. Why didn’t you?”

The answer, if there is one, seems to reside in what economists call the discount rate, i.e., the degree to which we are willing to experience a small pain now in order to avoid a bigger one later. Complicating this is that, generally, the people who experience that big pain later will not be ourselves, but rather, our descendants. In other words, all people, at a certain level, are selfish creatures; we may know that we’re causing suffering, but largely for someone else to bear.

This whole subject is explored in this fabulous article on climate change and our discount rate.