On the Problem of Achieving Efficiency and Equity, Intergenerationally

The paper compares two approaches to the problem of achieving the social goals of sustainability and intergenerational efficiency. The first is a separated approach, where the results of standard benefit-cost analysis are (later) combined with intergenerational equity considerations. The second, in the tradition of institutional design, is an integrated approach, where efficiency and equity considerations are combined from the start. It appears that several well-known problems with discounting can be avoided or mitigated by the second approach.