Economic Calculus and Sustainable Development
Guesnerie, Roger; Guéant, Olivier; Lasry, Jean-Michel (2008), Economic Calculus and Sustainable Development. https://basepub.dauphine.fr/handle/123456789/2266
TypeDocument de travail / Working paper
Series titleCahiers de la Chaire Finance et Développement Durable
Series number15 (Indiqué n°16 par erreur)
MetadataShow full item record
Abstract (EN)This article discusses the discount rate to be used in projects that aimed at improving the environment. The model is quite stylized and involves two diﬀerent goods, one is the usual consumption good whose production increases exponentially, the other is an environmental good whose quality remains limited. We deﬁne an ecological discount rate and we exhibit diﬀerent relations that link this discount rate with the usual interest rate and the growth rate. We also discuss, mainly in the long run, the sensibility of this ecological discount rate to the parameters.
Subjects / KeywordsEnvironment; Discount rate; Ecology
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