Discounting

In economics, converting future dollars into their present value. This can be a misleading indicator because, for example, when damage happens far in the future, discounting can make it seem less costly, such as with pollution or nuclear waste. Also, when benefits occur far in the future, their costs are often more difficult to justify since their value is discounted (such as with reforestation with slow-growing hardwoods). Resource extraction rates are also affected by the discount rate: a high discount rate could cause resources to be used up quickly, leaving fewer available for future generations.

Comments

Post a comment

References to this Definition

Attn Bloggers: If you use this term and want to have your blog cross referenced, use the trackback URL below to ping us.
http://www.triplepundit.com/mt/mt-tb.cgi/1300