Question: Those in favour of immediate reductions in fossil fuel consumption to reduce global wanning typically use a very low discount rate, i.e., close to

Those in favour of immediate reductions in fossil fuel consumption to reduce

Those in favour of immediate reductions in fossil fuel consumption to reduce global wanning typically use a very low discount rate, i.e., close to zero. Those who are critical use a discount rate closer to 3%. Explain why discounting consumption in the future is implied by positive interest rates. Explain why the appropriate discount rate IS an important consideration in the optimum policy response to global warming.

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