Social Investment and Its Discount Rate

2017 ◽  
Author(s):  
Iain Begg
Keyword(s):  
Climate Change ◽  
Discount Rate ◽  
Public Funding ◽  
Rate Of Return ◽  
Social Investment ◽  
Costs And Benefits ◽  
Economic Standpoint ◽  
Over Time

Like any form of investment, social investment will generate a rate of return and will represent a good use of public funding only if that rate of return is high enough compared to alternative uses of the resources. As with assessments of the benefits of action to prevent climate change, it is important to identify the main costs and benefits over time and to take into account the cumulative results of longer-term effects. However, because many of the consequences of social investment only materialize in the longer run, the justification for making social investments will be crucially affected by the discount rate chosen. This chapter examines how social investment can best be assessed from an economic standpoint, drawing attention to aspects that may prove contentious.

The Ramsey Rule

2012 ◽  
Author(s):  
Christian Gollier
Keyword(s):  
Climate Change ◽  
Discount Rate ◽  
Future Generations ◽  
Rate Of Return ◽  
Inequality Aversion ◽  
Main Argument ◽  
Investment Projects ◽  
Goods And Services ◽  
Growing Economy ◽  
Ramsey Rule

This chapter presents the main argument in favor of a positive discount rate. In a growing economy, future generations will consume more goods and services than we do. In this context, investing for the future is equivalent to asking poor consumers to sacrifice more of their consumption for the benefit for wealthier people. Because of inequality aversion, one would be ready to do so only if the rate of return of these investment projects is large enough to compensate for the increased intertemporal inequalities that these projects would generate. The Ramsey rule quantifies this wealth effect. In fact, several experts have used the Ramsey rule to make recommendations on the choice of the discount rate to evaluate public policies, in particular toward climate change.

Cultivating Ice over Time: On the Idea of Timeless Knowledge and Places in the Himalayas

1969 ◽  
Vol 58 (2) ◽  
pp. 193-210 ◽  
Author(s):  
Karine Gagné
Keyword(s):  
Climate Change ◽  
Sense Of Community ◽  
Local Knowledge ◽  
Local Communities ◽  
International Organisations ◽  
Change Over Time ◽  
Local Populations ◽  
Close Study ◽  
Indian Himalayas ◽  
Over Time

Assumptions that local communities have an endogenous capacity to adapt to climate change stemming from time-tested knowledge and an inherent sense of community that prompts mobilisation are becoming increasingly common in material produced by international organisations. This discourse, which relies on ahistorical and apolitical conceptions of localities and populations, is based on ideas of timeless knowledge and places. Analysing the water-place nexus in Ladakh, in the Indian Himalayas, through a close study of glacier practices as they change over time, the article argues that local knowledge is subject to change and must be analysed in light of changing conceptions and experiences of place by the state and by local populations alike.

scholarly journals The most appropriate discount rate

2013 ◽  
Vol 4 (03) ◽  
pp. 391-400 ◽  
Author(s):  
David F. Burgess ◽  
Richard O. Zerbe
Keyword(s):  
Private Sector ◽  
Discount Rate ◽  
Opportunity Cost ◽  
Time Preference ◽  
Cost Of Capital ◽  
Rate Of Return ◽  
Social Time ◽  
The Social ◽  
Benefits And Costs

The social opportunity cost of capital discount rate is the appropriate discount rate to use when evaluating government projects. It satisfies the fundamental rule that no project should be accepted that has a rate of return less than alternative available projects, and it ensures that worthy projects satisfy the potential Pareto test. The social time preference approach advocated by Moore et al. fails to satisfy either of these criteria even in the unlikely case that the private sector behaves myopically with respect to a project’s future benefits and costs.

scholarly journals Up with ecology, down with economy? The consolidation of the idea of climate change mitigation in the global public sphere

2018 ◽  
Vol 33 (6) ◽  
pp. 587-603 ◽  
Author(s):  
Tuomas Ylä-Anttila ◽  
Juho Vesa ◽  
Veikko Eranti ◽  
Anna Kukkonen ◽  
Tomi Lehtimäki ◽  
...  
Keyword(s):  
Climate Change ◽  
Public Sphere ◽  
Climate Change Mitigation ◽  
Analytical Framework ◽  
Economic Evaluations ◽  
Business Elites ◽  
The Public ◽  
The Public Sphere ◽  
Change Mitigation ◽  
Over Time

Building on theories of valuation and evaluation, we develop an analytical framework that outlines six elements of the process of consolidation of an idea in the public sphere. We then use the framework to analyse the process of consolidation of the idea of climate change mitigation between 1997 and 2013, focusing on the interplay between ecological and economic evaluations. Our content analysis of 1274 articles in leading newspapers in five countries around the globe shows that (1) ecological arguments increase over time, (2) economic arguments decrease over time, (3) the visibility of environmental nongovernmental organizations as carriers of ecological ideas increases over time, (4) the visibility of business actors correspondingly decreases, (5) ecological ideas are increasingly adopted by political and business elites and (6) a compromise emerges between ecological and economic evaluations, in the form of the argument that climate change mitigation boosts, rather than hinders economic growth.

scholarly journals A Framework for Identification, Assessment and Prioritization of Climate Change Adaptation Measures for Roads and Railways

2021 ◽  
Vol 18 (23) ◽  
pp. 12314
Author(s):  
Yvonne Andersson-Sköld ◽  
Lina Nordin ◽  
Erik Nyberg ◽  
Mikael Johannesson
Keyword(s):  
Climate Change ◽  
Risk Reduction ◽  
Climate Adaptation ◽  
Preventive Measures ◽  
Hazard Identification ◽  
Sensitivity Analyses ◽  
Costs And Benefits ◽  
Adaptation Measures ◽  
Severe Accidents ◽  
Risk Reduction Measures

Severe accidents and high costs associated with weather-related events already occur in today’s climate. Unless preventive measures are taken, the costs are expected to increase in future due to ongoing climate change. However, the risk reduction measures are costly as well and may result in unwanted impacts. Therefore, it is important to identify, assess and prioritize which measures are necessary to undertake, as well as where and when these are to be undertaken. To be able to make such evaluations, robust (scientifically based), transparent and systematic assessments and valuations are required. This article describes a framework to assess the cause-and-effect relationships and how to estimate the costs and benefits as a basis to assess and prioritize measures for climate adaptation of roads and railways. The framework includes hazard identification, risk analysis and risk assessment, identification, monetary and non-monetary evaluation of possible risk reduction measures and a step regarding distribution-, goal- and sensitivity analyses. The results from applying the framework shall be used to prioritize among potential risk reduction measures as well as when to undertake them.

scholarly journals Tree diversity and the temporal stability of mountain forest productivity: testing the effect of species composition, through asynchrony and overyielding

2020 ◽  
Author(s):  
Marion Jourdan ◽  
Christian Piedallu ◽  
Jonas Baudry ◽  
Xavier Morin
Keyword(s):  
Climate Change ◽  
Fagus Sylvatica ◽  
Stress Gradient ◽  
Abies Alba ◽  
Forest Productivity ◽  
Climatic Conditions ◽  
Mixed Stands ◽  
Tree Ring Data ◽  
Diversity Effect ◽  
Over Time

ABSTRACTClimate change modifies ecosystem processes directly through its effect on environmental conditions, but also indirectly by changing community composition. Theoretical studies and grassland experiments suggest that diversity may increase and stabilize communities’ productivity over time. Few recent studies on forest ecosystems suggested the same pattern but with a larger variability between the results. In this paper, we aimed to test stabilizing diversity effect for two kinds of mixtures (Fagus sylvatica - Quercus pubescens and Fagus sylvatica - Abies alba), and to assess how climate may affect the patterns. We used tree ring data from forest plots distributed along a latitudinal gradient across French Alps. We found that diversity effect on stability in productivity varies with stand composition. Most beech–fir stands showed a greater stability in productivity over time than monocultures, while beech–oak stands showed a less stable productivity. Considering non-additive effects, no significant trends were found, regardless the type of mixed stands considered. We further highlighted that these patterns could be partially explained by asynchrony between species responses to annual climatic conditions (notably to variation in temperature or precipitation), overyielding, and climatic conditions. We also showed that the intensity of the diversity effect on stability varies along the ecological gradient, consistently with the stress gradient hypothesis for beech-oak forests, but not for beech-fir forests. This study showed the importance of the species identity on the relationships between diversity, climate and stability of forest productivity. Better depicting diversity and composition effects on forest ecosystem functioning appears to be crucial for forest managers to promote forest adaptation and maintain timber resource in the context of on-going climate change.

scholarly journals Weather Differentials and Discount Rate Impact on Farmers’ Net Revenue: Modeling Results from Ghanaian Data Focusing on Different Agro-Climatic Zones

2021 ◽  
pp. 2150012
Author(s):  
Isaac Dasmani ◽  
Samuel K. N. Dadzie
Keyword(s):  
Climate Change ◽  
Soil Fertility ◽  
Discount Rate ◽  
Crop Production ◽  
Critical Issue ◽  
Management Policy ◽  
Negative Effects ◽  
Climatic Zones ◽  
Net Revenue ◽  
Using Data

In most developing countries, climate variabilities and discount rate played an integral role in the decision-making of farmers, which mostly affect their net revenue. Our study employs Ricardian models to empirically verify this hypothesis using data collected from three major agro-climatic zones in Ghana. We particularly estimated the comparative effect of climate change variability, discount rate, and soil fertility; due to trade-off effect of certain farm practices in response to climate change across major climatic zones and also the fact that discount rate becomes an extremely critical issue in formulating and evaluating conservation and management policy to address climate change. The result indicates that discount rate has a positive and significant effect on the farmers’ net revenue. Further, effect of changes in temperature on food crop production and hence net revenue is more felt in the forest and savannah zones. On the other hand, an increase in rainfall has significant negative effects on crop net revenues and whole-farm net revenue, but a positive effect on net revenue of farmers in the savannah zone. We also found a significant increase in soil fertility to increase crop net revenues.

A New Look into the Determinants of the Ecological Discount Rate: Disentangling Social Preferences

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Luciana Echazu ◽  
Diego Nocetti ◽  
William T. Smith
Keyword(s):  
Term Structure ◽  
Discount Rate ◽  
Environmental Quality ◽  
Social Preferences ◽  
Inequality Aversion ◽  
The Social ◽  
Representative Consumer ◽  
Change Mitigation ◽  
Over Time

Abstract How should changes in environmental quality occurring in the future be discounted? To answer this question we consider a model of “ecological discounting”, where the representative consumer has a utility function defined over two attributes, consumption and environmental quality, which evolve stochastically over time. We characterize the determinants of the social discount rate and its behavior over time using a preference structure that disentangles attitudes towards intertemporal inequality, attitudes towards risk, and tastes over consumption and environmental quality. We show that the degree of substitutability between consumption and environmental quality, the degree of risk aversion, the degree of inequality aversion, and the rate at which these attitudes change as natural and man-made resources evolve over time are all important aspects of the ecological discount rate and its term structure. Our analysis suggests that over medium and long term horizons the ecological discount rate should be below the rate of time preference, supporting recent proposals for immediate action towards climate change mitigation.

scholarly journals The Power of Peers: How Transnational Advocacy Networks Shape NGO Strategies on Climate Change

2017 ◽  
Vol 49 (2) ◽  
pp. 637-659 ◽  
Author(s):  
Jennifer Hadden ◽  
Lorien Jasny
Keyword(s):  
Climate Change ◽  
Global Politics ◽  
Transnational Advocacy ◽  
Costs And Benefits ◽  
Advocacy Networks ◽  
Transnational Advocacy Networks ◽  
Relational Processes ◽  
Network Autocorrelation ◽  
Governmental Organizations ◽  
Non Governmental Organizations

What explains variation in the tactical choices of non-governmental organizations (NGOs)? This article uses network autocorrelation models to establish how the tactical choices of climate change NGOs are shaped by their embeddedness in transnational advocacy networks. Specifically, it finds that NGOs are more likely to adopt protest tactics when adjacent organizations – those with whom they have direct ties – have already done so. The choices of equivalent organizations – those that occupy similar relational roles in the network – do not appear to be influential. Qualitative evidence also shows that NGOs are affected by relational pressure from their peers, which alters their perception of costs and benefits. These findings enhance understanding of how networks influence actors’ behavior and offer insights into the relational processes that generate protest in global politics.

Health and natural landscapes: concepts and applications

2021 ◽  
Keyword(s):  
Climate Change ◽  
Human Development ◽  
Traditional Ecological Knowledge ◽  
Well Being ◽  
Natural World ◽  
Ecological Knowledge ◽  
Positive Outcomes ◽  
Natural Landscapes ◽  
The Many ◽  
Over Time

Abstract This book contains 8 chapters that discuss and explore these positive outcomes by delving into how humans perceive and respond to the natural world. It also looks at the different stages of human development and how societal perspectives regarding natural landscapes have changed over time. These perspectives influence our responses to current issues such as climate change and pandemics. Examining our worldviews is critical to developing a deeper understanding of human beliefs and relationships with natural landscapes. Moreover, empirically based theories and models can be useful in enhancing that understanding, but other realities are also important such as traditional ecological knowledge (TEK) and a rekindling of a sense of connection with nature. Whether empirically derived in recent decades or handed down through the generations, this knowledge can be useful as we consider the many forms of human well-being, including physical, mental, spiritual, and social.

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