Energy policy and the further future: the social discount rate

Abstract

The social discount rate, which assigns diminishing moral weight to costs and benefits based on their temporal distance from the present, lacks a sound ethical foundation. Temporal remoteness is a morally neutral factor; while it correlates with variables such as reduced probability, opportunity costs, and the potentially greater wealth of future generations, these factors do not justify a uniform discount for time itself. Distinctions must be made between reinvestable capital and non-monetary benefits, such as environmental quality or physical health, where opportunity cost arguments fail. Similarly, probabilistic adjustments should target the likelihood of an event rather than its timing to avoid misrepresenting the moral importance of future harms. Neither the democratic preferences of the current electorate nor the limits of required sacrifice justify the systematic devaluation of the further future, especially regarding the infliction of grave harms. Just as a “spatial discount rate” based on geographic distance is considered arbitrary, the temporal discount rate bundles distinct moral considerations into a crude metric that obscures clear ethical reasoning. These factors must instead be evaluated independently to ensure that the interests of future generations are not disregarded. – AI-generated abstract.