Cost-benefit Analysis and Intergenerational Equity:A New Intergenerational Discounting Approach

Becanse of the harm to intergenerational equity,cost-benefit analysis has been thought of as an invalid instrument for evaluating the projects and policies with long-term impacts on natural resources and environment.It,therefores is a research focus on how to adapt cost-benefit analysis to these projects and policies at present.From the perspective of sustainable development theory,the paper,first,conducts a comparative analysis of the background,calculation methods and application scopes of four sorts of representative intergenerational discount rates including experimentation-oriented intergenerational discount rate,zero social discount rate,unitary environmental discount rate and dual social discount rate.Then it establishes a new intergenerational discounting approach which centers on multi-social discount rate,and last,a new discounting approach is simulated in a numerical simulation way with an example of water and soil conservation project.It is concluded that:①multi-social discount rate is superior to the four sorts of representative intergenerational discount rates in terms of evaluating the projects and policies with long-term and complicated impacts on natural resources and environment;②the new intergenerational discounting approach centered on multi-social discount rate could provide systematic guidance to how to select discount rate in the evaluation process of projects and policies;③each environmental discount rate in the framework of multi-social discount rate must be estimated in accordance with the principle that it decreases in time span and in the difficulty of substitution between man-made capital and environmental resources.The paper ends up with the policy implication of establishing a stakeholder of multi-discipline experts and compiling a discount rate table.