IDEAS home Printed from https://ideas.repec.org/p/cdl/agrebk/qt10d7d7n4.html
   My bibliography  Save this paper

Sustainability, Limited Substitutability and Non-Constant Social Discount Rates

Author

Listed:
  • Traeger, Christian P.

Abstract

The paper explores the consequences of limited substitutability in welfare between environmental and produced goods for long-term evaluation. I show how the magnitude and time development of optimal social discount rates depend on the substitutability between the different classes of goods. The notions of weak and strong sustainability are translated into the degree of substitutability. I show that a strong notion of sustainability results in lower weights given to long-run service and consumption streams compared to a weak notion of sustainability.

Suggested Citation

  • Traeger, Christian P., 2008. "Sustainability, Limited Substitutability and Non-Constant Social Discount Rates," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt10d7d7n4, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt10d7d7n4
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/10d7d7n4.pdf;origin=repeccitec
    Download Restriction: no
    --->

    Other versions of this item:

    References listed on IDEAS

    as
    1. Weikard, Hans-Peter & Zhu, Xueqin, 2005. "Discounting and environmental quality: When should dual rates be used?," Economic Modelling, Elsevier, vol. 22(5), pages 868-878, September.
    2. Traeger, Christian P., 2007. "Sustainability, limited substitutability and non-constant social discount rates," CUDARE Working Papers 6099, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Thomas Sterner & U. Martin Persson, 2008. "An Even Sterner Review: Introducing Relative Prices into the Discounting Debate," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 61-76, Winter.
    4. Traeger, Christian P., 2011. "Sustainability, limited substitutability, and non-constant social discount rates," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 215-228, September.
      Full references (including those not matched with items on IDEAS)

      Citations

      Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
      as


      Cited by:

      1. Karp, Larry S., 2009. "Sacrifice, discounting and climate policy: five questions," CUDARE Working Papers 51612, University of California, Berkeley, Department of Agricultural and Resource Economics.

      Most related items

      These are the items that most often cite the same works as this one and are cited by the same works as this one.
      1. Kögel, Tomas, 2009. "On the Relation between Dual-Rate Discounting and Substitutability," Economics Discussion Papers 2009-10, Kiel Institute for the World Economy (IfW Kiel).
      2. Rick Van der Ploeg & Armon Rezai, 2015. "Intergenerational Inequality Aversion, Growth and the Role of Damages: Occam's rule for the global tax," Economics Series Working Papers OxCarre Research Paper 15, University of Oxford, Department of Economics.
      3. Kögel, Tomas, 2011. "On the Relation between Discounting of Climate Change and Edgeworth-Pareto Substitutability," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-12.
      4. Gollier, Christian, 2010. "Ecological discounting," Journal of Economic Theory, Elsevier, vol. 145(2), pages 812-829, March.
      5. Armon Rezai & Frederick Van der Ploeg, 2016. "Intergenerational Inequality Aversion, Growth, and the Role of Damages: Occam's Rule for the Global Carbon Tax," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 493-522.
      6. Armon Rezai & Frederick Van der Ploeg, 2016. "Intergenerational Inequality Aversion, Growth, and the Role of Damages: Occam's Rule for the Global Carbon Tax," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 493-522.
      7. Traeger, Christian P., 2009. "The Social Discount Rate under Intertemporal Risk Aversion and Ambiguity," CUDARE Working Papers 55785, University of California, Berkeley, Department of Agricultural and Resource Economics.
      8. Rintaro Yamaguchi, 2019. "Intergenerational Discounting with Intragenerational Inequality in Consumption and the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 957-972, August.
      9. Defrancesco, Edi & Gatto, Paola & Rosato, Paolo, 2014. "A ‘component-based’ approach to discounting for natural resource damage assessment," Ecological Economics, Elsevier, vol. 99(C), pages 1-9.
      10. Marion Dupoux, 2016. "The land use change time-accounting failure," EconomiX Working Papers 2016-28, University of Paris Nanterre, EconomiX.
      11. Moritz A. Drupp & Martin C. Hänsel, 2021. "Relative Prices and Climate Policy: How the Scarcity of Nonmarket Goods Drives Policy Evaluation," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 168-201, February.
      12. Kollenberg, Sascha & Taschini, Luca, 2016. "Emissions trading systems with cap adjustments," Journal of Environmental Economics and Management, Elsevier, vol. 80(C), pages 20-36.
      13. Antonio Nesticò & Gabriella Maselli & Patrizia Ghisellini & Sergio Ulgiati, 2023. "A Dual Probabilistic Discounting Approach to Assess Economic and Environmental Impacts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(1), pages 239-265, May.
      14. Moritz A. Drupp, 2018. "Limits to Substitution Between Ecosystem Services and Manufactured Goods and Implications for Social Discounting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 135-158, January.
      15. Dupoux, Marion, 2019. "The land use change time-accounting failure," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
      16. Stefan Baumgärtner & Alexandra Klein & Denise Thiel & Klara Winkler, 2015. "Ramsey Discounting of Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(2), pages 273-296, June.
      17. Zhu, Xueqin & Smulders, Sjak & de Zeeuw, Aart, 2019. "Discounting in the presence of scarce ecosystem services," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
      18. Lampert, Adam, 2024. "Global non-sustainable harvest of renewable resources reduces their present price but increases their net present value," Resource and Energy Economics, Elsevier, vol. 76(C).
      19. Jonas Heckenhahn & Moritz A. Drupp, 2024. "Relative Price Changes of Ecosystem Services: Evidence from Germany," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(3), pages 833-880, March.
      20. Jasper N. Meya & Stefan Baumgärtner & Moritz A. Drupp & Martin F. Quaas, 2020. "Inequality and the Value of Public Natural Capital," CESifo Working Paper Series 8752, CESifo.

      More about this item

      Keywords

      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;
      ;

      Statistics

      Access and download statistics

      Corrections

      All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:agrebk:qt10d7d7n4. See general information about how to correct material in RePEc.

      If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

      If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

      If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

      For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/dabrkus.html .

      Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.