The post also features this nice graphic that's been a recent hit on the twittersphere, and it sure doesn't hurt to promulgate it further:
Meanwhile, at The Conversation, there's an interesting post up with the title Bjorn Lomborg’s consensus approach is blind to inequality.
The argument is that the cost-benefit analysis that is Lomborg's shtick now does not have adequate regard to intergenerational inequality. The explanation of discounting is dealt with pleasing clarity:
The picture is complicated even more when considering issues where the benefits are deferred – such as taking action on climate change.
Cost-benefit calculations typically deal with this by using “discount rates”. Typically, humans are not good at deferred gratification; we would much rather have $100 today than next year, so discount rates place a lower value on returns the further they are in the future.
This approach is contentious, particularly in environmental economics, where the benefits of our investments accrue to future generations rather than ourselves. Do we have the ethical right to discount the value of the lives and livelihoods of future generations against our own shorter-term financial benefit?
In climate economics, the time horizons are so long that even a relatively low discount rate can generate apparently absurd conclusions. More generally, any discount rate can be interpreted as a preference for intergenerational inequality: it systematically values the welfare of future generations at a lower level than our own.But someone in comments disputes the take on "utility" in the article, saying this:
Your explanation of utility is not quite right and quite unfair to poor old Jeremy Bentham. Given diminishing marginal utility of income, a concept devised by Bentham, an investment that generates a smaller financial return but accrues to a poor person rather than a rich person could easily be considered superior in terms of utility. It seems to me your criticism of Lomborg is precisely that he doesn't assess investments in term of utility.Regardless of that, another comment in the thread perhaps make a more general point that sounds about right: