High discount rates by private actors undermine climate change adaptation policies
dc.contributor.author | Alpizar, Francisco | |
dc.contributor.author | del Carpio, Maria Bernedo | |
dc.contributor.author | Cremades, Roger | |
dc.contributor.author | Ferraro, Paul J. | |
dc.date.accessioned | 2023-09-01T19:58:55Z | |
dc.date.available | 2023-09-01T19:58:55Z | |
dc.date.issued | 2023-02-18 | |
dc.description.abstract | Adaptation requires investing now to avoid future damages, and thus adaptation is shaped by discount rates. Although the role of social discount rates in climate policy design has been well documented, the role of private discount rates has been ignored. We illustrate the importance of private discount rates in shaping adaptation investments by empirically demonstrating how household discount rates are negatively correlated with investments in water storage tanks in Central America. High private discount rates are common throughout the world and are a barrier to private adaptation investments. To overcome this barrier, adaptation policies targeted at private actors should ensure that benefits accrue sooner or that costs are lowered or accrue later. Governments or private companies could also offer long-term loans that exploit the differential between the discount rate of the lender and the private borrower. | en_US |
dc.description.sponsorship | The authors acknowledge funding from Canada’s International Development Research Centre (IDRC) through the project “Adaptación al cambio climático de las organizaciones rurales proveedoras de agua en América Central.” | en_US |
dc.description.uri | https://www.sciencedirect.com/science/article/pii/S2212096323000141 | en_US |
dc.format.extent | 6 pages | en_US |
dc.genre | journal articles | en_US |
dc.identifier | doi:10.13016/m2ldtl-iaal | |
dc.identifier.citation | Alpizar, Francisco, Maria Bernedo del Carpio, Roger Cremades, and Paul J. Ferraro. “High Discount Rates by Private Actors Undermine Climate Change Adaptation Policies.” Climate Risk Management 40 (January 1, 2023): 100488. https://doi.org/10.1016/j.crm.2023.100488. | en_US |
dc.identifier.uri | https://doi.org/10.1016/j.crm.2023.100488 | |
dc.identifier.uri | http://hdl.handle.net/11603/29527 | |
dc.language.iso | en_US | en_US |
dc.publisher | Elsevier | en_US |
dc.relation.isAvailableAt | The University of Maryland, Baltimore County (UMBC) | |
dc.relation.ispartof | UMBC Economics Department Collection | |
dc.relation.ispartof | UMBC Faculty Collection | |
dc.rights | This item is likely protected under Title 17 of the U.S. Copyright Law. Unless on a Creative Commons license, for uses protected by Copyright Law, contact the copyright holder or the author. | en_US |
dc.rights | Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) | * |
dc.rights.uri | https://creativecommons.org/licenses/by-nc-nd/4.0/ | * |
dc.title | High discount rates by private actors undermine climate change adaptation policies | en_US |
dc.type | Text | en_US |