Discounting while Treating Generations Equally
By: Geir Asheim
Climate Change and Common Sense: Essays in Honour of Tom Schelling, Hahn, R. and Ulph, U. (eds.), Oxford University Press.
This chapter asks whether equal treatment of generations is compatible with social discounting. It presents the rank‐discounted utilitarian criterion, proposed by Stéphane Zuber and analysed in Zuber and Asheim (2010), which combines equal treatment with social discounting by giving priority for the worse off not only due to their absolute level of well‐being but also their relative rank in well‐being. If the future is better off than the present, then this criterion is behaviourally indistinguishable from discounted utilitarianism, which is the criterion usually employed by economists. However, if for example climate change breaks the correlation between time and well‐being, then rank‐discounted utilitarianism more than discounted utilitarianism calls for present action to protect the interests of future generations.