Ramsey discounting of ecosystem services

Activity: Talk or presentationConference PresentationsResearch

Stefan Baumgärtner - Speaker

Alexandra-Maria Klein - Speaker

Denise Thiel - Speaker

Klara Winkler - Speaker

Most ecosystem services which are essential for human well-being are globallydeclining, while the production of market goods and services, measured by GDP, is stillcontinuously increasing. To adequately address this opposite development in publiccost-benefit analyses, it has been proposed – based on an extension of the classicalRamsey model – to apply good-specific discount rates for market consumption goods andecosystem services. Using empirical data for ten ecosystem services and five countries aswell as the world at large, we estimate by how much discount rates for ecosystem servicesshould deviate from the discount rate for market goods and services. In a conservativeestimate, we find that ecosystem services in all countries should be discounted at ratesthat are significantly lower than the ones for market consumption goods. On globalaverage, ecosystem services should be discounted at a rate that is 0.9±0.3 %-pointslower than the one for market consumption goods


Monte Verita Conference on Sustainable Resource Use and Economic Dynamics - SURED 2012


Ascona, Switzerland

Event: Conference