Better decisions for the future
Major challenges that our planet faces in coming years, from faltering pension systems to climate change, require policymakers and authorities to make important decisions that significantly impact future generations. To make such decisions, policymakers generally rely on an approach known as time discounting, which places less weight on costs and benefits for future generations than on current costs and benefits. However, the value and efficacy of intergenerational discounting have been questioned often, being put under much scrutiny by experts in the field. With this in mind, the EU-funded FINDISC (Foundations of intergenerational discounting) project looked at how such crucial intergenerational decision-making can be improved. Working on refining intergenerational discounting, the project team integrated more variables which it deemed necessary into the equation. It considered discounting factors such as expressing judgments concerning the future, thus moving beyond current approaches to intergenerational discounting. More specifically FINDISC refined how judgements can be integrated into intergenerational discounting, creating novel approaches that are useful in debates from economics and public policy to philosophy and environmental impact. The team worked on building a more robust and reliable model of intergenerational discounting by focusing in particular on the philosophy of economics, exploring different approaches to measurement theory such as the representational theory of measurement. It looked at the qualitative concepts that a discounting factor expresses and the conditions under which it tends to be more valid. The project work involved several streams of research. The first investigated and outlined general axiomatic foundations for intergenerational discounting as well as conditions to be met for establishing discounting factors. The second covered evaluating conceptual motivations for intergenerational discounting found in related literature on the social discount rate based on these axiomatic foundations. In addition, FINDISC studied if and how a distinction between facts and values remains valid in intergenerational discounting. It then applied all the results to hot topics and debates in economics and public policy about intergenerational discounting and climate change. The project’s outcomes have no doubt led to better approaches to intergenerational discounting, supporting more accurate decision-making about the future.
Decision-making, climate change, time discounting, intergenerational discounting, FINDISC