Temporal Cost-Benefit Analysis: A Dynamic Discounting Framework That Accounts for Intergenerational Equity and Learning Curves

This research challenges the standard use of constant discount rates in CBA, which undervalue future benefits and intergenerational equity. It introduces a framework modeling discount rates as dynamic functions evolving based on societal preferences, technological progress, and learning curves, while explicitly incorporating intergenerational equity weights to adjust valuation of benefits accruing to different future generations. For example, renewable energy investments would be evaluated with discount rates that decrease as technology improves and societal values shift, and future generations' benefits weighted more heavily. The methodology combines adaptive learning models with ethical frameworks to create discounting schedules reflecting technological, societal, and ethical changes. This approach offers a more sophisticated and ethically grounded method for temporal trade-offs in policy analysis, potentially increasing support for long-term infrastructure, environmental, and educational investments.

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