(The Economics of) Discounting: Unbalanced Growth, Uncertainty, and Spatial Considerations

Posted: 22 Sep 2012

See all articles by Thomas Sterner

Thomas Sterner

Göteborg University - Department of Economics

Efthymia Kyriakopoulou

University of Gothenburg ; Beijer Institute of Ecological Economics

Date Written: August 2012

Abstract

The economics of climate change and the various measures that should be implemented to reduce future damages are highly tied to the use of cost-benefit analysis. Traditional approaches ignore the fact that environmental amenities do not experience the same growth rate as do most of the sectors in the economy, which leads to changing relative prices. Uncertainty should also be considered, especially when one is conducting cost-benefit analysis involving the long-run damages from climate change. This article reviews some theoretical approaches to the economics of discounting and discusses issues associated with unbalanced growth, uncertainty, and spatial discounting.

Suggested Citation

Sterner, Thomas and Kyriakopoulou, Efthymia, (The Economics of) Discounting: Unbalanced Growth, Uncertainty, and Spatial Considerations (August 2012). Annual Review of Resource Economics, Vol. 4, Issue 1, pp. 285-301, 2012, Available at SSRN: https://ssrn.com/abstract=2149996 or http://dx.doi.org/10.1146/annurev-resource-110811-114507

Thomas Sterner (Contact Author)

Göteborg University - Department of Economics ( email )

Göteborg
Sweden

Efthymia Kyriakopoulou

University of Gothenburg ( email )

Vasagatan 1
P.O. Box 640
Gothenburg, 405 30
Sweden
46 (0)31 786 2641 (Phone)

HOME PAGE: http://economics.handels.gu.se/english/staff/senior_lecturers-lecturers-_researchers/efthymia-kyriak

Beijer Institute of Ecological Economics ( email )

Stockholm
United States

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