Suppose that the government is debating whether to spend $ 100 billion today to address climate change. It is estimated that $ 700 billion of damage will be averted, but these benefits will accrue 100 years from now. A critic of the proposal says that it would be far better to invest the $ 100 billion, earning an average real return of 5 percent per year, and then use the proceeds in 100 years to repair the damage from climate change. Is this critic correct?
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