Table of Contents

Discounting the Benefits of Climate Change Mitigation

Foreword    ii

Executive Summary     iii

I. Introduction    1

II. A Plethora of Discount Rates     6
          A. Market Rates     6
          B. Intergenerational Rates     9
          C. Choosing a Rate     11
          D. Changes in Interest Rates over Time     13

III. The Effect of Discount Rate Uncertainty on Future Valuations   15
          A. Modeling the Long-term Behavior of Interest Rates     16
          B. Random Walks     18

IV. Valuing Future Climate Change Consequences     20
         A. Expected Discount Factors     20
         B. Valuing Future Climate Policy     22

V. Conclusions     25

Endnotes     27

References     30

Appendices    
         A. Estimation     32
         B. Simulations     36