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This Concept Map, created with IHMC CmapTools, has information related to: pure-time-preference, click on the small, bent arrow at the bottom right of this text box to get back to the Stern Review's main argumentation start here if "the welfare of future generations should be treated on a par with our own" (5), then we should apply a low discount rate of pure time preference of 0.1%, instead of looking at ethically prescribed real interest rate, we should lookt at "the real real interest rate—as the benchmarks for climatic investments. The normatively acceptable real interest rates prescribed by philosophers, economists, or the British government are irrelevant to determining the appropriate discount rate to use in the actual financial and capital markets of the United States, China, Brazil, and the rest of the world. When countries weigh their self-interest in international bargains about emissions reductions and burden sharing, they will look at the actual gains from bargains, and the returns on these relative to other investments, rather than the gains that would come from a theoretical growth model" (Nordhaus 2007, 692) objects (Nordhaus 2007) if "the welfare of future generations should be treated on a par with our own" (5), then we should apply a low discount rate of pure time preference of 0.1%, "very low discount rates" magnify" impacts in the distant future and rationalizes deep cuts in emissions, and indeed in all consumption, today. If we substitute more conventional discount rates used in other global- warming analyses, by governments, by con- sumers, or by businesses, the Review’s dramatic results disappear" (Nordhaus, 2007, 689) e.g. "The effect of low discounting can be illustrated with a “wrinkle experiment.�? Suppose that scientists discover a wrinkle in the climate system that will cause damages equal to 0.1 percent of net consumption starting in 2200 and continuing at that rate forever after. How large a one-time investment would be justified today to remove the wrinkle that starts only after two centuries? Using the methodology of the Review, the answer is that we should pay up to 56 percent of one year’s world consumption today to remove the wrinkle ... In other words, it is worth a one-time consumption hit of approximately $30,000 billion today to fix a tiny problem that begins in 2200." (696), since the the effects of GHG emissions "are potentially very large, and many may be irreversible" (Stern 2010), it is justified to "magnify" impacts in the future objects (M.H.) "very low discount rates" magnify" impacts in the distant future and rationalizes deep cuts in emissions, and indeed in all consumption, today. If we substitute more conventional discount rates used in other global- warming analyses, by governments, by con- sumers, or by businesses, the Review’s dramatic results disappear" (Nordhaus, 2007, 689), "a high rate of discounting of the future will favour avoiding the costs of reducing emissions now, since the gains from a safer and better climate in the future are a long way off and heavily discounted (and vice versa for low discount rates)." (45) suppports if "the welfare of future generations should be treated on a par with our own" (5), then we should apply a low discount rate of pure time preference of 0.1%, "A related feature of the Review’s near-zero time discount rate is that it puts present decisions on a hair-trigger in response to farfuture contingencies. Under conventional discounting, contingencies many centuries ahead have a tiny weight in today’s decisions. Decisions focus on the near future. With the Review’s discounting procedure, by contrast, present decisions become extremely sensitive to uncertain events in the distant future." (696) objects (Nordhaus 2007) if "the welfare of future generations should be treated on a par with our own" (5), then we should apply a low discount rate of pure time preference of 0.1%, "very low discount rates" magnify" impacts in the distant future and rationalizes deep cuts in emissions, and indeed in all consumption, today. If we substitute more conventional discount rates used in other global- warming analyses, by governments, by con- sumers, or by businesses, the Review’s dramatic results disappear" (Nordhaus, 2007, 689) objects (Nordhaus 2007) if "the welfare of future generations should be treated on a par with our own" (5), then we should apply a low discount rate of pure time preference of 0.1%, "A related feature of the Review’s near-zero time discount rate is that it puts present decisions on a hair-trigger in response to farfuture contingencies. Under conventional discounting, contingencies many centuries ahead have a tiny weight in today’s decisions. Decisions focus on the near future. With the Review’s discounting procedure, by contrast, present decisions become extremely sensitive to uncertain events in the distant future." (696) e.g. "We saw above how an infinitesimal impact on the post-2200 income stream could justify a large consumption sacrifice today. We can use the same example to illustrate how farfuture uncertainties are magnified by low discount rates. Suppose that the climatic wrinkle is not a sure thing; rather, there is a 10 percent probability of a wrinkle that would reduce the post-2200 income stream by 0.1 percent. What insurance premium would be justified today to reduce that probability to zero? With conventional discount rates, and one might say with common sense, we would ignore any tiny low-probability wrinkle two centuries ahead. With the Review’s near-zero discount rate, offsetting the low-probability wrinkle would be enormously valuable. We would pay an insurance premium today of as much as 8 percent of one year’s consumption (about $4 trillion) to remove the year-2200 contingency. If the contingency were thought to occur in 2400 rather than 2200, the insurance premium would still be 6.5 percent of one year’s income. Because the future is so greatly magnified by a near-zero time discount rate, policies would be virtually identical for different threshold dates. Moreover, a small refinement in the probability estimate would trigger a large change in the dollar premium. If someone discovered that the probability was 15 percent rather than 10 percent, the insurance premium would rise by almost $2 trillion." (697), The Debate about the Stern-Review and the Economics of Climate Change visualized according to the rules and conventions of Logical Argument Mapping (LAM)