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Social Discount Rates from Stratospheric Ozone Control

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  • MARK D. AGEE
  • KENNETH C. FAH

Abstract

We develop a model of optimal project timing to infer the discount rate US residents attach to investments in stratospheric ozone preservation. In this model, the calendar date at which preservation‐related benefits offset costs is shown to be an increasing function of the real social rate of time preference. Estimates of US costs and benefits associated with the original (1987) Montreal Protocol are used to determine a range of discount rates from the US control of stratospheric ozone depletion. From this example the range is about 3.0 to 8.77 per cent.

Suggested Citation

  • Mark D. Agee & Kenneth C. Fah, 1995. "Social Discount Rates from Stratospheric Ozone Control," The Economic Record, The Economic Society of Australia, vol. 71(2), pages 191-196, June.
    • Handle: RePEc:bla:ecorec:v:71:y:1995:i:2:p:191-196
    DOI: 10.1111/j.1475-4932.1995.tb01885.x
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    References listed on IDEAS

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    1. Weitzman Martin L., 1994. "On the Environmental Discount Rate," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 200-209, March.
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    4. Lind, Robert C., 1990. "Reassessing the government's discount rate policy in light of new theory and data in a world economy with a high degree of capital mobility," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 8-28, March.
    5. Anthony C. Fisher & John V. Krutilla, 1975. "Resource Conservation, Environmental Preservation, and the Rate of Discount," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 89(3), pages 358-370.
    6. Kashner, T. Michael, 1990. "Present-future gratification tradeoffs: does economics validate psychometric studies?," Journal of Economic Psychology, Elsevier, vol. 11(2), pages 247-268, June.
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    Cited by:

    1. Robert Dixon, 2011. "Global Environment Facility investments in the phase-out of ozone-depleting substances," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(5), pages 567-584, June.

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