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dc.contributor.authorKoen Vermeylen
dc.date.accessioned2019-09-25T11:14:46Z
dc.date.available2019-09-25T11:14:46Z
dc.date.created2016-03-03 06:07
dc.identifieroai:RePEc:dgr:uvatin:20130203
dc.identifierRePEc:dgr:uvatin:20130203
dc.identifierhttp://papers.tinbergen.nl/13203.pdf
dc.identifier.urihttp://hdl.handle.net/20.500.12424/247144
dc.description.abstractThis paper uses the Kaldor-Hicks compensation principle to compute the present value (PV) of a non-marginal future event. Three theoretical results stand out: First, decreasing returns to capital create a wedge between the PV of future generations' willingness to pay (WTP) and the PV of their willingness to accept compensation (WTA); second, the discount rates implicit in the computation of the PVs are endogenous, and rising (declining) over time for the future generations' WTP (WTA); and third, decreasing returns to capital may make it impossible to compensate future generations according to their WTA, effectively defeating the tyranny of discounting. A back-of-the-envelope calibration suggests that this last result is realistic in the case of climate change. A cost-benefit analysis based on the Kaldor-Hicks compensation principle may therefore be impossible if futu re generations are entitled to a world without climate change; and an environmental trust fund - no matter how large it is - may be insufficient to adequately compensate future generations.
dc.description.abstractclimate change, cost-benefit analysis, discounting, WTP, WTA
dc.titleNon-Marginal Cost-Benefit Analysis and the Tyranny of Discounting
dc.typepreprint
ge.collectioncodeBA
ge.dataimportlabelOAI metadata object
ge.identifier.legacyglobethics:6827238
ge.identifier.permalinkhttps://www.globethics.net/gel/6827238
ge.lastmodificationdate2016-03-21 15:48
ge.submissions0
ge.oai.exportid53
ge.oai.repositoryid1228
ge.oai.setnameRePEc
ge.oai.setspecRePEc
ge.oai.streamid1
ge.setnameGlobeEthicsLib
ge.setspecglobeethicslib
ge.linkhttp://papers.tinbergen.nl/13203.pdf


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