Empower youth to advocate for a just valuation of their future in the economics of climate change, thus unlocking ambitious climate action
Concern for youth and future generations is widespread throughout human societies and cultures. Whether from the macro-perspective of the Brundtland Report that gave us the iconic definition of sustainable development or from the micro-perspective of people with their own children and grandchildren, everyone expresses a concern for the kind of world we pass along to today's youth and their descendants. Yet there is a methodology in traditional economics which works against any concern for the future; commonly referred to as "discounting", it is the practice of assigning less numerical weight to the impacts a policy will have in the future compared to those it will have today. Thus, it creates a powerful bias in our decision-making toward benefits in the present at the expense of greater costs in the future.
While we certainly need to rethink (and ultimately reduce) the practice of discounting, the deeper problem is that young people overwhelmingly lack even the awareness that it happens! Even if they did realize its subtle yet powerful role in hindering their desires and actions to put humanity on a sustainable pathway, very few youth would have the understanding of economics required to intelligently challenge their elder economists about it. Youth may have a special "moral voice" when speaking about climate change and their future, but they need to know where and how to use it for the highest impact. We need to educate them about climate economics.
This proposal therefore calls for two measures with the same goals: 1) to bring about a change in discounting such that our economic models/policies are consistent with Intergenerational Justice, and 2) to provide young people with an awareness and understanding of economics that will empower them to advocate this critical change to our political and economic leaders. It offers a clear Action Plan for implementing these measures and highlights where some initial efforts can be scaled-up toward this end.
Category of action
Youth Leadership on Climate Change
What actions do you propose?
This section will explain the proposal's two measures and the Action Plan for implementing them.
Proposed Measure #1: Rethink (and Reduce) the Social Discount Rate
Background: What is Discounting and Why Should Youth Challenge it?
If you ask economists, "What should I do?", they will look at your various options and evaluate the costs and benefits that would result from each one. In doing so, they would give more weight to benefits you could have right away and less to benefits you would have to wait for; likewise, they would put more weight on costs you would face right away and less on costs down the road. That is, they apply "discounting" to what would happen in your future, assigning less and less value to things the farther into the future they would happen.
There are two main reasons why economists use discounting. First, they believe that people care more about what happens tomorrow than what happens in a year. Their classic example for this is that anyone would say they would prefer to be given $100 today than in one year from now. Second, economists recognize that the value of things changes over time, making it a tricky business to compare values today with values in the future. This happens for a variety of very technical reasons like uncertainty, inflation, economic growth, and technological progress. The result of these two considerations is that economists discount the future by a selected percentage they call the Social Discount Rate (SDR).
But what difference does this really make? The graph below helps to illustrate the effects of discounting. For example, a discount rate of just 4% (the red line) would make a cost of $100 occurring 10 years in the future seem like only $67 in today’s terms (only 2/3 the weight as if it happened now), while the same cost 50 years away would seem like only $14 today (just 14% of its value). For young people today who plan to still be alive in 50 years, such a reduction in value is cause for serious concern. And what about our children, who will live on to experience a future 100 years away which is discounted to only 2% of its value in today's terms?
Since climate policy involves making trade-offs between mitigation activities that we must pay for today and climate impacts that will place severe costs on youth and future generations down the road, how these present and future values are weighted makes a huge difference for our decision-making. Right now, discounting prevents the economic arguments from supporting the kind of ambitious action young people are calling for, so they must use their "moral voice" to push for a change to this methodology and its unjust effects. There are indeed powerful arguments youth can deploy against discounting, based in Intergenerational Justice, human rights, and ecological economics.
(For a thorough review of both sides of the argument, including this powerful rebuttal, please consult the author's masters dissertation cited in the References)
Measure #1: What is the Solution?
A solution youth could propose would be to use a SDR that is no greater than 1.4% (the orange line in the above graph), and that is ideally even closer to 0% (the blue line). Future generations, if they could speak, might even ask us to use a negative SDR (the green line) to make our math consistent with our expressed desire to leave them a world even better off than the one we inherited ourselves.
Shifting to 1.4% is relatively feasible, as this is the same value renowned economist Nicolas Stern used in his Review on the Economics of Climate Change (2006); it shows that ambitious action is indeed economically justified, even though it was widely criticized by some other economists for using a lower-than-normal percentage. A rate of 0% or less, while a perfect fit for Intergenerational Justice, is unlikely to prove very feasible politically, but is nonetheless worth including in the discussion.
Proposed Measure #2: Educate and Empower Youth in Economics
Empowering youth to pursue a change in discounting by educating them about climate economics is vital to the successful implementation of Measure #1. Without the "moral voice" of youth coming to bear on this issue, our political and economic leaders will have very little reason to consider any change to the status quo. Therefore, Measure #2 proposes doing just that, and this section will provide a detailed Action Plan for educating and empowering young people in regard to the economics of climate change.
This Action Plan involves three main steps:
- Develop Educational Content for Youth
- Establish a Network for Outreach
- Deliver Educational Content Via the Network
These three steps will lay the foundation for implementing Measure #1, as well as generate other key benefits (discussed in that section of the proposal).
Develop Educational Content for Youth
The first step is devising and producing the necessary content to inform young people about climate economics and how they can influence it. Such content would include presentations (both personal and virtual), workshops, and the materials for use in these (agendas, Power Points, videos, handouts, etc). All content would work toward one or more of the three following goals:
- EDUCATE: raise youth awareness about discounting and their understanding of economics
- INSPIRE: connect the issue to youth's "moral voice" to motivate their action on it
- EMPOWER: provide youth with the concrete skills needed to take action
Short online videos could widely spark young people's interest in the topic, longer videos and in-person presentations would provide an inspirational education in the subject matter, and workshops of a couple hours might cover all three areas with an emphasis on empowerment.
Some of the above content already exists, meaning this program would not need to start completely from scratch. The author has previously made PPs for use on two separate occasions (US Power Shift, 2013; COY9, 2013) and both were very well received for their educational and inspirational value; the latter even motivated YOUNGO to integrate discounting policy into its work on Intergenerational Equity at the UNFCCC, seeing it as a practical means of implementing the principle (which is often quite abstract).
This campaign, organized by the Intergenerational Equity Group (of which this proposal's author is now the Economic Adviser), also drafted various lobbying documents for use at the UNFCCC; these materials expand the scope of existing content into the area of empowerment as well. Additionally, a mini side event was presented to attendees of COP19 and is available online. Previous in-person presentations, such as this one, not only indicate that speaking content is already available for building into a larger outreach program, but that such content can be very successful at communicating with both youth and adults.
Establish a Network for Outreach
The next step in the Action Plan is creating a network to support the program. Its primary objective would be to provide a means of spreading the produced content to as many young people as possible, while it would ideally also include some of the implementers these young people would hope to reach out to regarding the economics of climate change. Academic institutions are a logical starting point given their proximity to and experience with educating young people; they are also the current teachers of economics! Businesses particularly concerned with Corporate Social Responsibility might join this network as well, both to help facilitate the empowerment of youth and to help them incorporate these ideas into their accounting practices. Finally, some members of government or prominent decision-makers could join to lend their influence and support.
Youth organizations would also have a core role to play, and once again there are already some existing efforts to serve as a foundation for expansion. The Intergenerational Equity (Inteq) Group is composed of youth and their NGOs from around the world who are already actively pursuing this issue within the UNFCCC context. Organizations like SustainUS (of which this proposal's author is also a member), which has its feet in both the UN and US domestic arenas, can help to make further connections. Myriad other domestic and international youth groups could join this existing proto-network to become engaged with a youth program focusing on climate economics.
Deliver Educational Content Via the Network
The final step is actually bringing the content through the network(s) to young people and then harnessing their voices into one collective mobilization for a change in the discount rate. This outreach would include three main components:
- Broad Online Outreach
- Targeted In-Person Presentations
- Targeted In-Person Workshops
Online outreach using social media would allow content, primarily in the form of short videos and blogs/articles, to reach a wide audience of youth. This would generate a basic awareness of the issue and spark greater interest in the program. Since there is no equivalent substitute for personal interaction, a manageable number of in-person presentations would be given to targeted audiences; colleges and universities with a progressive atmosphere are likely the best places for these sessions, while especially enthusiastic organizations from other constituencies might also warrant the attention. Finally, a limited number of workshops, primarily targeting youth who are already experienced activists, would train more young people to engage in outreach of their own. In this way, the Action Plan could increase the number and diversity of young people able to help with implementing this proposal. Multilingual youth, in particular, would be essential for translating the content for non-English speakers.
Youth could expand their outreach to older generations as well; parents and grandparents are likely to support a change in discounting too, once they become aware of it. This expansion would begin to bring the economics of climate change to the attention of political leaders, enabling young people to initiate a serious intergenerational dialogue about how society values their future and how we will implement policies consistent with these values. Thus, the key ingredient needed to undertake ambitious climate action - political will - can manifest to support the transformational changes required to set the world on a sustainable course for youth and future generations.
Youth Advocacy for Measure #1
As youth and other actors become empowered from the Action Plan's work, where will they direct their advocacy? The answer lies in two fronts: at the national and international levels. Youth would target their own national governments to implement the appropriate changes in economic policy (i.e., a lowering of the discount rate), while a collective campaign would continue operating at the UN (at the UNFCCC, in particular). At both levels, the goal would be to have countries match the ambition of their climate actions with what the new, less-discounted economic evaluations recommended. Regarding the UN process, this would manifest in the amount of ambition countries put on the table with their Independent Nationally Determined Contributions (INDCs) for the 2015 treaty (and their pre-2020 ambition too). Advocacy would continue after 2015 as dictated by the situation at that time.
The two Measures this proposal calls for are indeed very ambitious, but their potential as a "game-changer" in our economic decision-making is profound. It will require time and effort to effect a change in the discount rate, but we can begin educating and empowering youth to work on bringing about this change in climate economics right away. The basic elements already exist from the work started by the author, the Inteq Group, SustainUS, and others. All that is needed to get the project underway is the right catalyst, like the kind of high-level attention (and possibly funding) this contest has to offer.
Who will take these actions?
The proposal author can undertake the initial actions for Measure #2 with the help of connected youth organizations (e.g., The Inteq Group, SustainUS, YOUNGO, etc). Through their outreach and training workshops, many other youth and organizations will become directly involved in these efforts. All of these contributors will be united through the creation of a network devoted to implementing Measure #1, which will itself be put into practice by political and economic leaders down the road as a result of the work on Measure #2.
The Elders, CliMates, and the "implementers" who might have this proposal brought to their attention at the MIT conference in November are all prime candidates for this network as well.
Beyond these actors, the general public will eventually become engaged and play a role by exerting their influence on their political leaders. Businesses can take a proactive role by incorporating Intergenerational Justice into their understanding of Corporate Social Responsibility, while colleges and universities can begin to change the way they teach economics to students. In this way, action will grow from a small, committed starting group of young people to involve government and the rest of civil society.
All the efforts across these many actors would be united through their common policy language and platform. A success in one place would lead to a domino effect elsewhere. This is really one of the most unique and powerful abilities of the global youth movement: the ability to work across borders by sharing a common generational identity and common aspirations for the future. Implementing an Action Plan such as this one would be a powerful way to direct and enhance this energy.
What are other key benefits?
Measure #1 would not only be a major "game-changer" in our economic decision-making, but would also cause a shift in the entire way that people think about what sustainable development and Intergenerational Justice really mean (i.e., their practical implications for how we live our lives and manage our relationship with our descendants). This would potentially trigger a powerful "moral ripple" in society, helping to enhance many other efforts to address climate change and injustice.
Measure#2, meanwhile, would help young people to see economics in a completely new and positive light. Many youth only see the economic arguments as an obstacle to their efforts for change. The realization that a shift within economics is possible regarding the discount rate - and seeing the beneficial impact that would have - could open their imaginations to other ways to constructively shift our current economic paradigm to a more just and sustainable one.
What are the proposal’s costs?
Measure #1 will not involve any direct costs from the perspective of this proposal, as it will be a policy shift implemented by political and economic leaders (so normal government operation will cover it).
Measure #2, however, will require some funding to implement. While the author and other youth can volunteer their time and expertise to deploy the Action Plan, some costs are unavoidable. These include:
- Travel and hosting expenses associated with workshops and presentations
- Professional assistance with producing quality content items (like videos)
- Production of printed materials for use in trainings and outreach
As much work as possible can be done virtually to limit travel expenses, but some would still be necessary to give presentations and workshops at major youth conferences around the world (e.g., COY10/COP20 and COY11/COP21). Youth acting as leads for the Action Plan in their country would likely incur some domestic travel expenses as well (depending on the size of their country), but such travel would no longer be vital once the number and geographic distribution of engaged youth grew sufficiently. Ideally, some of the involved organizations would be able to help cover a portion of their own staff and travel costs. It is worth noting that travel costs are often one of the most significant barriers to participation that young people face.
Most of these costs will occur ad hoc, making it hard to define a precise budget for this proposal. Nevertheless, they would amount to enough to make good use of a $10,000 prize; there would always be another worthwhile place to give a presentation or workshop, or even the opportunity to host a conference for rallying the network once it had progressed its mobilization to that point. In the event of receiving a monetary award, the proposal author would accept the responsibility for managing such funds and transparently accounting for their expenditure.
This proposal could be implemented in the short-term, and would have a direct impact on the medium and long-term views taken in our economic decision-making.
The project would launch from the MIT conference in November, where the author could meet the attending "implementers" and gather willing partners/collaborators. If it received a Grand Prize, then the next step from this conference would be to start planning presentations and workshops with this new network, while they also produced the necessary outreach content from the existing materials.
Presentations and workshops could begin fairly quickly; the first might occur in Lima at COY10/COP20, with many more to follow once the academic year resumed next spring. These would allow the network to start by targeting the mitigation component of the INDCs to be announced in March, 2015, and continue building national and international pressure toward Paris that winter.
The subsequent steps would greatly depend on the outcome of the network's endeavors by the end of COP21. Even under the most successful scenario (e.g., recognition of Intergenerational Justice and its implementation via discounting policy), the network would still have a lot to do to translate this progress into national policies. In the event of little success, they would need to stop and evaluate their situation and determine appropriate next-steps.
This timeline is ambitious, but feasible. It corresponds to the milestones already looming on the global climate policy horizon. If catalyzed as a result of this contest, the Measures in this proposal and its Action Plan would have about a year to generate an impact in Paris. Certainly the dedication, creativity, and passion of today's youth are a match for this challenge, provided their efforts are facilitated with the right empowerment from their peers and elders.
Two other proposals come to mind in connection to this one.
The first one (from The Verb in the pre-semi-finals of this contest) aimed to provide young people around the world with training in climate change communication/journalism. Having a global network of youth already engaged in effective outreach on climate change issues makes The Verb a great candidate for a collaborator on this Action Plan. Certainly they would have some skills related to the empowerment goal.
The second proposal (a current semi-finalist in the Shifting Behavior contest) seeks to generate political will for climate action via divestment from fossil fuels. While not directly related to this proposal, it is still an example of young people taking a fairly economic approach to encouraging political will. As such, they may represent a sub-section of youth activists who would also be particularly interested in tackling the discount rate through the proposed Action Plan.
This proposal is based heavily upon the author's 2013 masters dissertation, "A Changing Climate for Youth: The Ethics and Economics of an Intergenerational Equity Approach to Climate Change", and his on-going work in this area. Copies are available upon request.
A partial list of notable references utilized in that dissertation include:
Ackerman, F. (2009). The new climate economics: the stern review versus its critics.
Beckerman, W. and J. Pasek (2001). Justice, Posterity, and the Environment. Oxford, Oxford University Press.
Broome, J. (1992) Counting the Cost of Global Warming. Cambridge: White Horse Press.
Caney, S. (2009). Climate change and the future: Discounting for time, wealth, and risk. Journal of Social Philosophy, 40(2), 163-186.
Caney, S. (2008). Human rights, climate change, and discounting, Environmental Politics, 17:4, 536-555.
Dasgupta, P. (2006). Comments on the Stern Review’s economics of climate change. University of Cambridge.
Dietz, S., Hepburn, C. J., & Stern, N. (2007). Economics, ethics and climate change. Ethics and Climate Change (December 2007).
Howarth, R. B. (1992). Intergenerational justice and the chain of obligation. Environmental Values, 133-140.
Karp, L. (2005). Global warming and hyperbolic discounting. Journal of Public Economics, 89(2), 261-282.
Mendelsohn, R. (2008). Is the Stern Review an economic analysis?. Review of Environmental Economics and Policy, 2(1), 45-60.
Nordhaus, W. D. (2007). A Review of the" Stern Review on the Economics of Climate Change". Journal of Economic Literature, 686-702.
Padilla, E. (2004). Climate change, economic analysis and sustainable development. Environmental Values, 13(4), 523-544.
Padilla, E. (2002). Intergenerational equity and sustainability. Ecological Economics, 41(1), 69-83.
Pearce, D., Groom, B., Hepburn, C., & Koundouri, P. (2003). Valuing the future. World economics, 4(2), 121-141.
Prager, M. H., & Shertzer, K. W. (2006). Remembering the future: A commentary on “Intergenerational discounting: A new intuitive approach”. Ecological Economics, 60(1), 24-26.
Saez, C. A., & Requena, J. C. (2007). Reconciling sustainability and discounting in Cost–Benefit Analysis: A methodological proposal. Ecological economics, 60(4), 712-725.
Spash, C. L. (1993). Economics, ethics, and long-term environmental damages. Environmental Ethics, 15(2), 117-132.
Stern, N. (2006). Review on the economics of climate change. London HM Treasury.
Sumaila, U. R., & Walters, C. (2007). Making future generations count: Comment on “Remembering the future”. Ecological Economics, 60(3), 487-488.
Sumaila, U. R., & Walters, C. (2005). Intergenerational discounting: a new intuitive approach. Ecological Economics, 52(2), 135-142.
Weiss, E. B. (2008). Climate change, intergenerational equity, and international law. Vt. J. Envtl. L., (2007-2008): 9, 615.
Weiss, E. B. (1992). In Fairness To Future Generations and Sustainable Development. American University International Law Review 8(1), 19-26.