Future generations and economic activities: The case of the social discount rate

The objective of this article is to show the difficulties economists have when they try to answer the following question: What can economists do to promote a fair and “safe” economic development? Or otherwise said: what should we do to promote more equity between generations in an environmental perspective? The purpose of this article is not to develop new tools or policies but to give an overview of some theoretical and practical problems linked to the connection between environment, intergenerational justice and economic activities. The first section focuses on the reasons for the need to develop a reflection about intergenerational equity in the economics of the environment. The second section investigates some related theoretical problems, and the third section shows the practical difficulties economists have when dealing with intertemporal economic decisions; that is, trying to take intergenerational equity into account—in particular the choice of a discount rate for public investments.