Discounting in the context of climate change economics: the policy implications of uncertainty and global asymmetries

Abstract

Climate change, Discounting, Risk, Uncertainty, Asymmetries,

Envisaging Mitigation Action Can Induce Lower Discounting toward Future Environmental Gains and Promote Pro-Environmental Behavior

“…Building on recent advances that demonstrated the reduction effect of engagement in EFT on the tendency to discount the future [10][11][12][13][14][15] and the association between the discounting tendency and climate change engagement [5][6][7][8], we contend that engagement in EFT to envisage life events involving mitigation action may induce a lower discounting tendency and enhance the tendency to engage in pro-environmental action. We found that engaging in EFT associated with mitigation events promoted the inclination to act pro-environmentally, as reflected by a greater tendency to use air conditioning in an energy-saving manner (Experiment 1), a higher likelihood of choosing a diet with lower environmental impact (Experiment 2), and a higher inclination to participate in beach cleaning (Experiment 2).…”

“…Communications of the future impacts of climate change have been framed as distant threats [2,8]. At the individual level, the discounting of a future risk such as climate change represents a pervasive tendency in which daily, immediate concerns take precedence over remote threats [5,28]. A viable explanation for less engagement of the general public with climate change is that the negative impacts of climate change tend to be perceived as a set of distant, uncertain events [2,6,8,29].…”

“…A viable explanation for less engagement of the general public with climate change is that the negative impacts of climate change tend to be perceived as a set of distant, uncertain events [2,6,8,29]. Nevertheless, individuals also tend to discount the future benefits of taking mitigation action toward climate change [5][6][7]. The large but delayed benefits of pro-environmental behavior are less attractive than the less pro-environmental choice with lower response effort and achieving short-term outcomes [7,30].…”

“…Many people still perceive climate change as a remote, future threat [1][2][3][4]. Due to the long-term and uncertain nature of climate change impact, the general public appears to discount the future threats of climate change and the distant benefits of mitigating behavior [5][6][7][8]. From a psychological approach, the tendency to discount future gains should be a crucial determinant of engaging in climate change mitigation.…”

Multiobjective optimization of cluster‐scale urban water systems investigating alternative water sources and level of decentralization

“…Choosing the value of the discount rate, i , for economic costs and especially for greenhouse gas emissions is not without difficulties, and is significant as PVA is highly sensitive to the value of the discount rate. Many studies have addressed the choice of discount rate [ Simpson , ; Wu et al ., ; Azar and Sterner , ; Conceição et al ., ; Weitzman , ; Rambaud and Torrecillas , ; Guo et al ., ; Wu et al ., ; Cai et al ., ], and a discussion of the issues surrounding this is beyond the scope of the current paper.…”