Recent research suggests that the long term future should be discounted with a declining discount rate. One such line of research, exemplified by Weitzman [Gamma discounting, Amer. Econ. Rev. 91 (2001) 261–271], shows that the certainty equivalent discount rate is declining when future capital...

We estimate schedules of declining discount rates for cost benefit analysis in the UK. We highlight the importance of model selection for this task and hence for the evaluation of long-term investments, namely climate change prevention and nuclear build.

In a recent paper, Newell and Pizer (2003) (N&P) build upon Weitzman (1998, 2001) and show how uncertainty about future interest rates leads to ‘certainty equivalent’ forward rates (CER) that decline with the time horizon. Such Declining Discount Rates (DDR’s) have important implications...

This paper reviews the arguments for and the implications of employing Declining Discount Rates (DDRs) in CBA and in the analysis of economic growth and sustainability. We show that there exist several growth models in which a relationship has been found between the long-run equilibrium under...

Discussions about applied Cost Benefit Analysis are incomplete without the thorny issue of discounting emerging at some point. Indeed, since the calculation of Net Present Values (NPV), and hence the efficiency of a project or policy, hinges so crucially upon the level of the discount rate...

The scarcity of water resources in both arid and temperate countries alike is one of the most pervasive natural resource allocation problems facing water users and policy-makers. In arid countries this problem is faced each day in the myriad of conflicts that surround its use.Water scarcity is a...

In this chapter a ‘watershed economics approach’ that could be applied in Cyprus is proposed which is composed of two important stages. In Stage I economic valuation techniques are used to establish the economic value of the competing demands for surface and groundwater, incorporating where...

Discussions about applied Cost Benefit Analysis are incomplete without the thorny issue of discounting emerging at some point. Indeed, since the calculation of Net Present Values (NPV), and hence the efficiency of a project or policy, hinges so crucially upon the level of the discount rate...

This paper describes global biodiversity conservation as a co-operative bargaining problem. We model an interdependent ‘technology rich’ North and a ‘gene rich’ South who must co-operate in the biotechnology sector in order to combine their unique and essential resources and maximise...