1.The piouvian impose
2. The advantages in comparison to the standard system

3. The problem of the practices
3.1 The cognitive requisite
3.2 Equity
3.3 The political sustain

1. The rate of discount and evaluation of the future
1.1 The role of the time
1.2 Rate of discount and evaluation of the future
1.3 Rate of discount is according to the choices
2. The determination rate of discount
3. The sense to deduct a future discount?

The costs benefits budget when it takes the time in consideration:
It is necessary to discount the costs and the future benefits to keep track of their “temporal distant ” !

It is property to isolate in the cost – benefits evaluation the environmental components that can be positive or negative and it represents
THE VALUE OF THE ENVIRONMENTAL CHANGE
This value is naturally discounted like all the others

The fact that the cost benefit analysis uses discounted values emerges from the environmental safeguard point of view …

...Because it reduces the weight of the profits and the future costs, that typically reflect the relevant environmental consequences of the economic choices

Example:
If a contamination happened due to a bad management of nuclear cinders it can, produce a damage of 1 billion in 100 years the recent value of the damage with a discount rate of 8 % would be equal to
100
1 billion X 1 /(1.08 ) = 450.000 liras!

On the base of this logic the saving of one million liras today
WILL be enough to justify the production of a similar danger tomorrow !

General conclusion:
If the damage is far in the future
(and it is uncertain) the discount will decrease its recent value also if the entity of the damage is substantial

An analogous conclusion is worth for the profits:
If the profits concerns remote generations in the time its amount today will be notably under estimated

The presence of the discount rates can underestimate the benefit of a sensible today’s management of the exhaustible resources

On the other hand an elevated discount reduces the expected value of the future investments and it can discourage the adoption of investment projects whose impact on the environment will be negative…

How much the discount rate must be equal?
We will have
S = P + U × C
Where P is the “impatience” of the individual rate, C is the growth rate of the real consumption and U measures the impact of the consumption increase on the welfare

As the individuals are more impatient the more it will be consumed tomorrow, there will be more discount in the costs and in the future profit in comparison to those of today.

If we set U = 1 and we will not recognize a
“social” individual value for the impatience, we will have:
S= C
Or the rate of discount chosen by the society is equal to the growth rate of the economy.

IF THE POSSIBILITY OF CONSUMPTION
EXPAND MORE IN THE FUTURE, IT WILL
BE MORE SUITABLE TO GIVE MORE
IMPORTANCE TO TODAY

But what would happen if they foresee today some negative growth rates of the future consumptions ?
Should we attribute a great weight to the future costs and profit rather than to recent one ?