Justifying a Positive Social Discount Rate

Speaker: Joseph Heath
Director, Centre for Ethics, University of Toronto
Wednesday, January 23
Room 200, 15 Devonshire Place

Abstract: Recent debates over the economics of climate change have made it clear that the choice of a social discount rate has enormous consequences for the type of policies that will be recommended. The social discount rate determines how future costs are to be compared to (and traded off against) present costs. Since most economists acknowledge this to be a “moral” problem, one might think that moral philosophers could be of some use in at least exploring the issue. Unfortunately, the specific proposal that philosophers have been inclined to make, with respect to the social discount rate, is so far outside the ballpark of what economists and policy-makers have been considering, that it has resulted in them being largely sidelined in the discussion. This is because almost all philosophers who have written on this topic believe that the only acceptable social rate of time preference is zero, a view that, when taken literally, has absurd implications. As a result, philosophers have made very little contribution to the ongoing debates over climate policy. My first goal in this paper is to show that many philosophers have moved too quickly from the idea that the goodness or badness of a beneficial or harmful event is independent of when it occurs, to the conclusion that temporal discounting of benefits and harms in the present is impermissible. My second goal is to explore several different avenues of argument that could be adopted, in order to show that temporal discounting of welfare may be permissible.