The common practice in welfare economics of applying a positive Social Discount Rate—systematically … — Derek Parfit

The common practice in welfare economics of applying a positive Social Discount Rate—systematically counting future benefits and harms for less simply because they occur later—is indefensible, since temporal remoteness has no intrinsic moral significance and time discounting would render distant catastrophes morally trivial.

By Derek Parfit, from Les raisons et les personnes

Key Arguments

Parfit reports the standard view: 'Some writers claim that, while we ought to be concerned about effects on future people, we are morally justified in being less concerned about effects in the further future. This is a common view in welfare economics, and cost-benefit analysis. On this view, we can discount the more remote effects of our acts and policies, at some rate of n per cent per year. This is called the Social Discount Rate.'
He illustrates its implications using nuclear waste: 'Suppose we are considering how to dispose safely of the radio-active matter called nuclear waste. If we believe in the Social Discount Rate, we shall be concerned with safety only in the nearer future. We shall not be troubled by the fact that some nuclear waste will be radio-active for thousands of years.'
He gives a stark quantitative example: 'At a discount rate of five per cent, one death next year counts for more than a billion deaths in 500 years. On this view, catastrophes in the further future can now be regarded as morally trivial.'
He then passes judgment: 'As this case suggests, the Social Discount Rate is indefensible.', directly rejecting the practice as a moral principle.
He concedes there are correlations between temporal distance and other morally relevant features—'Remoteness in time roughly correlates with some important facts, such as predictability.'—but insists that 'these correlations are too rough to justify the Social Discount Rate.'
He claims that 'The present moral importance of future events does not decline at a rate of n per cent per year.', denying any simple exponential temporal discounting of moral weight.

Source Quotes

If I cannot be harmed or benefited by this child, as we can plausibly suppose, the harm that I cause this child has no moral importance. I assume that we should reject this view.7 Some writers claim that, while we ought to be concerned about effects on future people, we are morally justified in being less concerned about effects in the further future. This is a common view in welfare economics, and cost-benefit analysis.

This is a common view in welfare economics, and cost-benefit analysis. On this view, we can discount the more remote effects of our acts and policies, at some rate of n per cent per year. This is called the Social Discount Rate. Suppose we are considering how to dispose safely of the radio-active matter called nuclear waste.

This is called the Social Discount Rate. Suppose we are considering how to dispose safely of the radio-active matter called nuclear waste. If we believe in the Social Discount Rate, we shall be concerned with safety only in the nearer future.

Suppose we are considering how to dispose safely of the radio-active matter called nuclear waste. If we believe in the Social Discount Rate, we shall be concerned with safety only in the nearer future. We shall not be troubled by the fact that some nuclear waste will be radio-active for thousands of years. At a discount rate of five per cent, one death next year counts for more than a billion deaths in 500 years.

We shall not be troubled by the fact that some nuclear waste will be radio-active for thousands of years. At a discount rate of five per cent, one death next year counts for more than a billion deaths in 500 years. On this view, catastrophes in the further future can now be regarded as morally trivial. As this case suggests, the Social Discount Rate is indefensible.

On this view, catastrophes in the further future can now be regarded as morally trivial. As this case suggests, the Social Discount Rate is indefensible. Remoteness in time roughly correlates with some important facts, such as predictability.

As this case suggests, the Social Discount Rate is indefensible. Remoteness in time roughly correlates with some important facts, such as predictability. But, as I argue in Appendix F, these correlations are too rough to justify the Social Discount Rate.

Remoteness in time roughly correlates with some important facts, such as predictability. But, as I argue in Appendix F, these correlations are too rough to justify the Social Discount Rate. The present moral importance of future events does not decline at a rate of n per cent per year.

But, as I argue in Appendix F, these correlations are too rough to justify the Social Discount Rate. The present moral importance of future events does not decline at a rate of n per cent per year. Remoteness in time has, in itself, no more significance than remoteness in space.

Key Concepts

Some writers claim that, while we ought to be concerned about effects on future people, we are morally justified in being less concerned about effects in the further future.
On this view, we can discount the more remote effects of our acts and policies, at some rate of n per cent per year. This is called the Social Discount Rate.
Suppose we are considering how to dispose safely of the radio-active matter called nuclear waste.
If we believe in the Social Discount Rate, we shall be concerned with safety only in the nearer future. We shall not be troubled by the fact that some nuclear waste will be radio-active for thousands of years.
At a discount rate of five per cent, one death next year counts for more than a billion deaths in 500 years. On this view, catastrophes in the further future can now be regarded as morally trivial.
As this case suggests, the Social Discount Rate is indefensible.
Remoteness in time roughly correlates with some important facts, such as predictability.
these correlations are too rough to justify the Social Discount Rate.
The present moral importance of future events does not decline at a rate of n per cent per year.

Context

Central part of Section 121, where Parfit introduces the welfare-economic idea of a Social Discount Rate and argues, using nuclear waste and a numerical example, that discounting the moral importance of future people’s interests merely because they are temporally remote is untenable.