On Obligations to Future Generations
After the Stern report, there’s been a lot of discussion about discount rates and how much we owe future generations—if anything. The topic is complicated, but one thing is clear: however we decide this issue will have some interesting implications for how we should treat the developing world right now. As Brad DeLong says of the global-warming discussion,
the same logic applies to the world today. Average annual per capita incomes in the US, Japan, and Western Europe are currently around $40,000, and less than $6,000 for the poorer half of the world’s population. The same logic that says we need our $70 more than the people of 2100 need an extra $500 dictates that we should tax the world’s rich more, as long as each extra $500 in first-world taxes generates as little as an extra $70 in poor countries per capita incomes.
In short, if the world’s rich are stingy today toward our much richer descendants, and if we want to leave our environmental mess to them to deal with, we should be lavish toward the world’s poor. Likewise, if we are stingy today toward the world’s poor, we should be lavish toward our descendents.