Social discount rates?
July 31, 2012 9:22 PM Subscribe
Help me understand the argument that the social discount rate sets the amount we should invest to mitigate climate change.
posted by piyushnz to work & money (8 answers total) 3 users marked this as a favorite
After listening to this Planet Money podcast
and reading this article
on the Economist (amongst others), I am confused.
I think I understand what the social discount rate means, but I do not understand how it sets the current cost of investment to mitigate the effects of climate change in the future (as per the Stern report). Instead, it seems like it indicates how likely we are to make this investment. Surely the investment required will depend on the scope of future climate change, and not our likelihood to invest.
Can someone make this clearer to me please!