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Destructive intergenerational altruism

Author

Listed:
  • Asheim, Geir B.

    (Dept. of Economics, University of Oslo)

  • Nesje, Frikk

    (Dept. of Economics, University of Oslo)

Abstract

Are the probable future negative effects of climate change an argument for decreasing the discount rate to promote the interests of future generations? The analysis of the present paper suggests that such stronger intergenerational altruism might undermine future wellbeing if not complemented by collective climate action. In the standard one-sector model of economic growth normatively attractive outcomes will be implemented if each generation has sufficient altruism for its descendants. This conclusion is radically changed in a two-sector model where one form of capital is more productive than the other, but leads to negative atmospheric externalities. In fact, the model shows that, if each dynasty is trying to get ahead in a world threatened by climate change by increasing its intergenerational altruism, then long-term wellbeing will be seriously undermined.

Suggested Citation

  • Asheim, Geir B. & Nesje, Frikk, 2015. "Destructive intergenerational altruism," Memorandum 22/2015, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2015_022
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    References listed on IDEAS

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    1. Geir B. Asheim, 2010. "Intergenerational Equity," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 197-222, September.
    2. Asheim, Geir B. & Buchholz, Wolfgang & Tungodden, Bertil, 2001. "Justifying Sustainability," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 252-268, May.
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    6. Zuber, Stéphane & Asheim, Geir B., 2012. "Justifying social discounting: The rank-discounted utilitarian approach," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1572-1601.
    7. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 15, pages 1055-1106, Elsevier.
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    Cited by:

    1. Nesje, Frikk, 2020. "Cross-dynastic Intergenerational Altruism," Working Papers 0678, University of Heidelberg, Department of Economics.
    2. Barrage, Lint, 2018. "Be careful what you calibrate for: Social discounting in general equilibrium," Journal of Public Economics, Elsevier, vol. 160(C), pages 33-49.
    3. Martinet, Vincent & Del Campo, Stellio & Cairns, Robert D., 2022. "Intragenerational inequality aversion and intergenerational equity," European Economic Review, Elsevier, vol. 144(C).
    4. Geir B. Asheim, 2017. "Sustainable growth," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 825-848, December.

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    More about this item

    Keywords

    Intergenerational altruism; climate change.;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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