Discounting is traditionally defined as the process of comparing the values of gains and losses that occur at different times. The gains and losses are often - but not always - expressed in terms of money. For example, which would you value more: $100 today, or $200 in 10 years? How about one cookie now, or two cookies in 10 years? To make these decisions, we discount. Discounting is important not just to our own decisions as individuals, but also to the collective decisions we make for policy and other matters. Discounting is especially important for very long-term issues. This includes many major environmental issues such as climate change. Indeed, many debates about how we should respond to climate change have focused on how we should discount. These debates have been particularly prominent in the aftermath of the Stern Review on the "economics" of climate change. Contributions to discussions of discounting have come from scholars in many fields, including economics, ethics, psychology, law, and environmental stuides, among others.
I am currently conducting a research project on discounting, which includes my Ph.D. dissertation. The research includes several components. There is a philosophical discussion of what exactly discounting is. There is some ethics critiquing some views on discounting and promoting others. There is some psychological research on how people discount. Finally, there are applications of discounting to climate change and other topics.
My main publications on discounting so far are "Space-time discounting in climate change adaptation" and "Description, prescription and the choice of discount rates". There are also discussions of discounting in "Intrinsic ethics regarding integrated assessment models for climate management", "Is humanity doomed? Insights from astrobiology", "Cost-benefit analysis of space exploration: Some ethical considerations", "The 'Hidden' Social Costs of Forestry Offsets", and "Beyond the Ramsey model for climate change assessments". Other publications on discounting are in progress.
For those new to discounting, I recommend "Against the social discount rate" (pdf) by Tyler Cowen and Derek Parfit and "Valuing future life and future lives: A framework for understanding discounting" by Shane Frederick.
Created 8 Mar 2010 * Updated 8 Jul 2010