Climate Quote by Jørgen Randers
““Short-termism also dominates in the marketplace. The market uses a discount rate of 10% per year (or more) when comparing costs now with benefits in the future. This means that a benefit that lies twenty years ahead will be valued at one-tenth of its real value. In other words, a problem twenty years in the future will be worth solving only if the cost of the solution is less than one-tenth of the value saved. It comes as no surprise to those who know economics that it is “cost efficient” to allow the world to collapse from climate damage, as long as the collapse is more than forty years into the future. The net present value of reducing emissions and saving the world is lower than the net present value of business as usual. It is cheaper to push the world over the cliff than to try to save it. The political world is not much better, given the short tenure of political appointments. Politicians can rarely spend time on agendas that yield a positive result only after the next election—which is normally less than four years away.””
About This Quote
Short‑term discounting makes future climate benefits undervalued, leading rational actors to favor immediate profit over long‑term survival.
In simple terms: Discount rates bias decisions toward the near term.
Key Takeaway
High discount rates rationalize inaction on climate change.
Themes
economics
climate policy
intertemporal choice
political incentives
risk assessment
Mood
concerned
critical
urgent
Type
analytical
warning
policy critique
When to use this quote
- government budgeting
- corporate investment planning
- environmental regulation
- long‑term infrastructure projects
Key Concepts
net present value
discounting
future valuation
policy lag
Practical Applications
- designing low‑discount‑rate financing for green projects
- advocating policy reforms to extend political horizons
Questions to Reflect On
- How can societies reconcile short‑term political cycles with long‑term environmental goals?
- What mechanisms can lower effective discount rates for climate investments?
A Different Perspective
Some argue that high discount rates reflect opportunity cost of capital and that immediate needs must be met before distant benefits can be funded.
