Discounting behavior and environmental decisions.

Abstract

Discounting plays a major role in the life cycle of environmental and natural resource policies. Evaluating centuries-scale problems like climate change with standard discount rates yields results that many find ethically unacceptable. Paradoxes abound. Low discount rates are urged for determining the net benefits of climate change, while households fail to undertake energy conservation actions that have payback periods of only a few years. Efforts to uncover discount rates from revealed and stated preferences suggest that a variety of confounding factors may be simultaneously in play. Common property resources provide an example of how market failures can lead to behavior consistent with extreme discounting that can be addressed through effective policy. Finally, politicians who make ultimate policy decisions may have incentives to act in accordance with discount rates not socially optimal.

Greening through schooling: understanding the link between education and pro-environmental behavior in the Philippines

“…Factors like low time discount rates (i.e. focusing on benefits in a longer time horizon) have been found to be associated with environmental behavior and energy consumption (Carson andRoth Tran 2009, Long et al 2018) and are also reported to be more prominent amongst highly educated people (Chao et al 2009, WhitMarsh 2011. Additional factors such as biospheric values may also mediate the effect of education if these values influence pro-environmental actions and are correlated with education (Steg 2016).…”

Now or Later? Attentional Processing and Intertemporal Choice

“…Higher values of k imply greater discounting as a function of time or, in other words, a greater influence of immediacy on decision making (Green & Myerson, 2004;Kirby & Marakovic, 1995;Rachlin, Raineri, & Cross, 1991). Importantly, the propensity to discount the future occurs across many decision domains ranging from financial (e.g., Loewenstein & Thaler, 1989), health (e.g., Chapman, 2003), social (e.g., Jones & Rachlin, 2006), and environmental contexts (e.g., Carson & Tran, 2009). As such, the ubiquitous tendency to discount gains delayed in time is relevant to individual and societal functioning in many ways.…”

Consumer valuations of energy efficiency investments: The case of Vietnam's Air Conditioner market

“…Past 1 Since discounting plays a central role in the cost-benefit analysis of many public policies, individual discounting behavior has been studied outside of the context of energy efficiency investment also. For instance, Carson and Tran (2009) reviewed individual responses to common resource management and health risk. It is known that the similarity about discounting behavior among individuals is necessary for the success of common resource management.…”