Authors: H. Unnerstall
Addresses: Centre for Environmental Research Leipzig-Halle, Department of Economics, Sociology and Law, Permoserstr. 15, 04318 Leipzig, Germany
Abstract: Discounting is still a highly contested element of cost–benefit analysis. From an epistemological point of view, three levels of arguments must be distinguished: the empirical, the conceptual and the ethical level. On the conceptual level, discounting turns out to be a hypothesis that has to be justified empirically. This approach requires a method for a direct (utility-)evaluation of future cash-flows in order to prove that discounting correctly represents changes of utility-values in time. Reacting on ethical criticism, economic theory tends to draw a sharp line between intra- and inter-generational discounting. This is ethically unacceptable as the composition of any generation is arbitrary. Therefore, many intra-generational problems can be reformulated as inter-generational problems and vice versa. There can be only one consistent theory of inter-temporal justice.
Keywords: discounting; empirical basis of discounting; epistemology of discounting; intergenerational justice; intragenerational justice; intertemporal justice; meta-evaluation.
International Journal of Sustainable Development, 2003 Vol.6 No.1, pp.54 - 69
Available online: 05 Apr 2004 *Full-text access for editors Access for subscribers Purchase this article Comment on this article