Economic Incentives, Intergenerational Altruism and Sustainability
Within the framework of a small scale numerical model this paper carries out a simple thought experiment There are two perspectives: one, in which investment-saving decisions are made by an immortal agent acting as trustee on the behalf of both present and future generations; and one in which generations simply save during working years and dissave during retirement, but where carbon rights are traded internationally on competitive markets. Despite these polar views on intergenerational altruism virtually the same results can be observed with respect to sustainability as well as the variables directly relevant to the greenhouse problem.
KeywordsDiscount Rate Climate Policy Abatement Activity Social Discount Rate Atmospheric Carbon Dioxide Concentration
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