The value of some goods like wilderness today depends on their futures.
Normally, economists imagine, equal experiences become less valuable as they recede further into the future. But some types of goods don’t have that kind of relationship with future experiences. They can become more valuable as they extend farther into to the future.
Take this blog post, for example. I’m really happy that you’re reading it today. But it will be even cooler if someone reads it ten years from now. And it would be super cool if someone would read it a century from now. It’s also true that some people are more valuable because of their past histories – something owned by your grandparents might mean more to you than an otherwise identical object without that history. Or both could be true — an heirloom might mean more because it belonged to your grandparents and will someday belong to your grandchildren.
What’s going on here is a bit like a network externality. A phone is worth more, the more other people get phones. In the situation I’m discussing, it’s as if a phone became more valuable the more people in the past and the future got phones.
It seems to me that many aspects of the environment have this property. For instance, one reason one might value wilderness would be that the wilderness experience connects us with much older parts of human history, and one might also want to preserve wilderness so that the same experience will be available far in the future, when some much of the manmade world will be radically different.
From an economic view-point, this increase in the value of future wilderness experience has implications for discounting. Although discounting may still be appropriate, it is partly countered by the growing value we might attach the wilderness experience of others that the farther they are in the future. The result would be a lower discount rate for goods of this kind as opposed to ordinary goods.
Or in simpler terms, the ability of some kinds of experiences to link us with the past and the future gives them an extra dimension of value, one that grows over time rather than falling.
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Daniel Farber | January 28, 2016
The value of some goods like wilderness today depends on their futures. Normally, economists imagine, equal experiences become less valuable as they recede further into the future. But some types of goods don’t have that kind of relationship with future experiences. They can become more valuable as they extend farther into to the future. Take […]
James Goodwin | January 20, 2016
Still just a few weeks into the new year, both chambers of Congress are making it clear that attacks on our system of regulatory safeguards will remain a top priority in 2016. The GOP-controlled House of Representatives has already passed—along partisan lines—two antiregulatory measures, and the Senate appears poised to follow suit with their own […]
Evan Isaacson | January 13, 2016
The water crisis in Flint, Michigan, is a tragic reminder of the hidden costs of our nation’s failing infrastructure. Whether through benign neglect or deliberate “starve the beast” cost-cutting measures, we are continually seeing the costly and sometimes terrible consequences of failing to meet our infrastructure financing needs. The American Society of Civil Engineers gave […]
Thomas McGarity | January 13, 2016
President Obama devoted his final state-of-the-union speech to highlighting his administration’s considerable accomplishments, and, more importantly, to articulating a surprisingly robust progressive vision for the future. And that vision properly included a large role for federal regulation. Noting that “reckless Wall Street,” not food stamp recipients, caused the financial meltdown of 2008-09, the President predicted, […]
| January 12, 2016
Last September, the Environmental Integrity Project put a spotlight on the dramatic increase in the number of industrial scale poultry houses being established on the Delmarva Peninsula. In its report, More Phosphorus, Less Monitoring, the organization found that more than 200 new chicken houses had been permitted on the peninsula since November 2014, including 67 […]
Daniel Farber | January 4, 2016
Here are seven of the most important developments affecting the environment. 2015 was a big year for agency regulations and international negotiations. In 2016, the main focal points will be the political process and the courts. Here are seven major things to watch for. The Presidential Election. The election will have huge consequences for the environment. A Republican […]
Katie Tracy | December 22, 2015
As the year draws to a close and the New Year approaches, people all around the world will be contemplating what they can resolve to do better in 2016. This year, the U.S. Department of Labor (DOL) and U.S. Department of Justice (DOJ) seem to be celebrating the tradition as well. In a move akin […]
Matt Shudtz | December 21, 2015
This afternoon, the U.S. Department of Labor announced that it was sending its final version of a long-awaited rule on silica dust in the workplace to the White House Office of Information and Regulatory Affairs (OIRA) for final review. CPR Executive Director Matthew Shudtz responded to the news with the following statement: Workers across the United […]
Alice Kaswan | December 21, 2015
As we seek to understand and assess the Paris Agreement over the coming months and years, we will continue to contemplate the critical underlying political and ethical question: who should be responsible? And to what degree should that responsibility take the form of direct action versus providing support in the form of financing, technology transfer, […]