Policymaking for Posterity
55 Pages Posted: 11 Sep 2008 Last revised: 12 Nov 2008
Date Written: September 10, 2008
Policymaking for posterity involves current decisions with distant consequences. Contrary to conventional prescriptions, we conclude that the greater wealth of future generations may strengthen the case for preserving environmental amenities; lower discount rates should be applied to the far future, and special effort should be made to avoid actions that impose costs on future generations. Posterity brings great uncertainties. Even massive losses, such as human extinction, however, do not merit infinite negative utility. Given learning, greater uncertainties about damages could increase or decrease the optimal level of current mitigation activities. Policies for posterity should anticipate effects on: alternative investments, both public and private; the actions of other nations; and the behaviors of future generations. Such effects may surprise. This analysis blends traditional public finance and behavioral economics with a number of hypothetical choice problems.
Keywords: Business and Government Policy, International Economics, Microeconomics, Environment and Natural Resources, International Affairs/Globalization, Science¿ Technology and Public Policy
JEL Classification: D90, D64, Q54, D81
Suggested Citation: Suggested Citation