The Sixth Annual Arrow Lecture
Pricing the Planet’s Future: The Economics of Discounting in an Uncertain World
April 25, 2013 · 6:00-8:00PM
Columbia University, School of International and Public Affairs, Room 1501
- Christian Gollier, Professor of Economics and Director, Toulouse School of Economics, University of Toulouse
- Bernard Salanié, Professor of Economics, Columbia University
- Kenneth Arrow, Joan Kenney Professor of Economics and Professor of Operations Research, Emeritus, Stanford University
- Joseph E. Stiglitz, University Professor and Co-chair of the Committee on Global Thought, Columbia University
The Sixth Annual Arrow Lecture was inspired by Arrow’s important work on intergenerational equity and climate change, particularly “Intertemporal Equity, Discounting and Economic Efficiency” (with Cline, Maler, Munasinghe, Squitieri and Stiglitz) in Climate Change 1995 and “Discounting, Morality and Gaming,” in Discounting and Intergenerational Equity (Eds. Portney and Weyant, 1999). Arrow Lecturer Gollier discussed the theory of risk-bearing, with an application to the welfare analysis of policies to reduce the risk of climate change. He compared various approaches to carbon discounting, including the established carbon pricing models developed by Nordhaus and Stern, the discount rates set by various states, as well as positivist, normative and underlying utilitarian frameworks for discounting. He concludes with an argument for a short- and long-term discount rate, suggesting figures for both, and proposes a carbon cost of $20 per ton of CO2.
Read more about the Kenneth J. Arrow Lecture and Publication Series.