Now or Never: Environmental Protection Under Hyperbolic Discounting
24 Pages Posted: 18 Dec 2010
There are 4 versions of this paper
Now or Never: Environmental Protection Under Hyperbolic Discounting
Now or Never: Environmental Protection Under Hyperbolic Discounting
Now or Never: Environmental Protection under Hyperbolic Discounting
Now or Never: Environmental Protection Under Hyperbolic Discounting
Date Written: 2009
Abstract
The author analyzes the optimal investment in environmental protection in a model of non-overlapping hyperbolically discounting agents. He shows that, in the long run and in the absence of a commitment device, society is stuck in a situation where all agents prefer further investments, yet no agent invests. This holds no matter whether agents are aware of the time inconsistency of their preferences. As a consequence, awareness of the time-inconsistency problem poses at best a short run remedy. Moreover, such an outcome may be Pareto inefficient and may explain the weak performance of long-run environmental policies. --
Keywords: Environmental policy, environmental protection, hyperbolic discounting, Markov perfect equilibria, time-inconsistency
JEL Classification: D90, Q50, Q58
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Discounting for Climate Change
By David Anthoff, Richard S. J. Tol, ...
-
Now or Never: Environmental Protection Under Hyperbolic Discounting
-
Now or Never: Environmental Protection under Hyperbolic Discounting
-
Now or Never: Environmental Protection Under Hyperbolic Discounting
-
The Social Discount Rate Under Intertemporal Risk Aversion and Ambiguity
-
Numerical Analysis of Non-Constant Discounting With an Application to Renewable Resource Management
By Tomoki Fujii and Larry S. Karp