benmmurphy
6d ago
I'm reading along as well. Thank you for sharing your book.
one wonders if they are using the same social time preference rate when calculating the costs of global warming in the future vs the costs of preventing global warming in the present. my understanding is the Stern Report used a discount rate of around ~1.5%. So that seems kind of suspicious that they are using a discount rate of between 2.5 and 3.5% here. however, the difference in rates is not super large. I think if they used a Stern rate it would increase the present value of the payments by a factor of 1.4 (where 1.0 would be the same value) compared to the rate they used.
also, whether it was misleading or not I think depends on how it was worded. If they said something like "the cost of the deal is 3.4 billion with payments over 100 years" then I think that is misleading because it gives the reader the impression that the payments are going to be something like 100 payments of 3.4 billion / 100 and a reader might think the net present value will be much lower. If you did not want to mislead the reader you would use more explicit wording like: "the net present value of the payments is 3.4 billion and will be paid over 100 years". My guess is the wording will just be standard wordcel games where you try to put false impressions in the heads of other people and then later claim the reader is at fault. I guess its also completely possible that all of the detail was shared with parliament but no-one in parliament actually reads the detail.
i've read the telegraph article and part of the article is written by the shadow foreign secretary priti patel. it seems like everyone knew what the cash value of the payments were all along but did not know how the treasury were calculating the final cost. i think in this case its hard to claim that treasury were that misleading. treasury should have explained originally how they came to their present value calculations but it's not like the value of the cash payments was hidden.
so the presumably if we follow this logic a CEO of a company would get a shorter custodial sentence than an unemployed person because the extra consequences will be much larger for the CEO. if you have special circumstances that will make punishments extra costly then you should make extra effort to not break the law.
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