How Much Should We Discount Future Generations?

Low-social discount rates help us compare the interests of future generations with the generations alive today. A high social discount rate implies that we value the interests offuture generations less, low social discount rate imply that we value them a bit more than that. And because they compound over time, they can lead to wildly divergent outcomes depending on which discount rate you choose. So for example, Nicholas Stern back in 2006 had a very aggressive climate change policy because he used quite low discount rates,. whereas William Nordhaus proposed more modest mitigatory policies because his discount rate was quite high.