Thoughts on intergenerational equality

A new concept in thought has come up recently, mainly around Climate change and it is this concept of inter generational equity....the idea that the present generation owes some sort of benefit to generations coming through and potentially generations unborn.

It is often used as a justification to combat Climate Change. I understand the reasoning because climate change really isn't having any adverse affects on society at the moment. The current generation is probably as rich, healthy and educated as any in human history. So from strictly a cost benefit analysis it makes no sense to do anything about climate change at the moment.

It is only when you employ the "survival of the species" and "think of the grand children" into the mix, that a justification can be employed. We have seen this through the celebration of Greta Thunberg, a child who advocates action on Climate Change based on this "You owe the children" theory.

And we have seen this through most of the economic analysis around Climate Change. Discount rates of 0% (or very low rates) have been employed to make the costs of action today more palatable, even though most economic analysis would employ at least 3% discount rates to future cash flows (as is usually the case).

But both the Stern report and the Australian equivalent (the Gaurnat report) both use Intergeneration Equity arguments to keep the costs of action today low (yet in economic valuation, a dollar spent today is always more expensive than a dollar spent in the future.)

So obviously this theory is worthy of discusions as it does impact policies today.

So I was thinking of the history of Intergational equity and when it appeared on the scene. For much of human history, not much emphasis was put on future generations. In law and finance, inheritance is seen as much as passing on both the positives and negatives, rather than just trying to ensure the negatives are minimised.

For example, my Grandad dies and passes on a house to me. But the mortgage also is passed to me. Is this a net positive or a net negative. By far it is a positive. I have a house to live in that protects me from the elements. And I can sell it if required. Sure, I have to pay off the loan, but still ahead.

And so it is with Climate change. One could argue that the benefits of humanity, with all the advancement based on industrialization are also passed onto future generations, not just the costs. So if ensuring that the world is as rich and advanced today is passed on, shouldn't that also be a priority, rather that just making sure the world is clean?

That's why i don't necessarily agree that rich nations should be doing the heavy lifting on climate change. Countries like India and China have benefited massively through industrialized nations, those same countries that pumped out the Greenhouse gases long ago. Everyone has won so everyone should either keep pumping out the gases or give it up.

Another argument would also be, if we are talking equity, why aren't more priorities placed on the generations before ours, not just the generations coming through. Making sure the elderly are provided for in their dotage is just as relevant as preserving the future generations. So increased power prices doesn't help them.

From a legal perspective, children do have rights, but not as many as adults. And the unborn do not have any rights. Legally we owe nothing to the future generations.

And lastly there is a certain degree of arrogance in Generations today dictating what Generations tomorrow will or wont be able to achieve. I mean, the world tomorrow might be a far colder place, and might require climate change to combat that. Or the world tomorrow may be far wealthier than today so why should be spend sparse resources looking after a Generation that may be far wealthier and more able to adapt to a hotter world.

Interesting times.