The trouble of discounting tomorrow

At its core, sustainability is about living our lives in ways that leave the same or better options for future generations as we enjoy today; and this implies a need to protect the broader environment on which we all depend. The basic problem is that achieving sustainability involves trade-offs. We all discount our own futures, enjoying today’s certain benefits against the uncertainty of what will happen tomorrow. Societies also discount, and do so hyperbolically, which means that they most severely discount the near-term future. From a social-planning point of view, the question of how to discount the future is an open one, involving issues of ethics and basic fairness. Without some form of discounting, we could never use any of a nonrenewable resource, leaving the resource untouched for future generations similarly to leave untouched …obviously a paradox.

Population growth and demographic shifts toward an older population further complicate the issue, increasing future potential demand. China’s population, for example, is aging at a very rapid rate, a result of its one-child policy and lower mortality. Caring for the interests of a large and growing population of seniors will pose great challenges for the Chinese people and will make sustainability even more difficult.

Similar problems exist, if not to the same degree, in other countries. In addition to the responsibility of today’s population for future generations, the social contract in the great majority of nations reverses time’s arrow, making younger generations responsible for older ones through social security schemes. Hungary’s National Sustainable Development Strategy, for example, states that “the decreased willigness to have children and the increased life expectancy at birth may lead to a situation where in 2050 one elderly citizen will be sustained by two workers instead of the current four”. Such trends clearly complicate any sustainability strategy and make it essential to find ways to achieve intergenerational compromise.

Discounting is in part a reflection of uncertainty about the future. But what is the right discount rate to use? It would be difficult enough were we contemplating just our own futures, or even those of our children; where concern for others and the future structure of societies is involved, there is no obvious right answer. Indeed disagreement about the proper discount rate to use is what divides those who accept from those who reject the findings of Britain’s Stern Commission on climate change.

But dealing with discounting in the context of intergenerational transfers is doable. Countries such as Sweden, Denmark, Germany, and Poland have employed relatively long-term perspectives, on the order of several decades, in developing national strategies for sustainable development. Finland has developed a “Programme for Sustainable Development” that incorporates intergenerational indicators that must be monitored; biodiversity preservation is one target of the scheme.This is, at least, a beginning.

The central issues in achieving sustainability are thus ones of temporal allocation, of prosociality toward others (that is, concern for the welfare of others), of cooperation, and of the social norms that sustain cooperative behavior. We live in a global commons, in which the collective consequences of individual actions have externalities and social costs, and these are not adequately addressed through conventional market mechanisms. These problems are magnified as the scale of organisation is increased, where individual nations are the units of decision making. Garrett Hardin, in addressing the “tragedy of the commons,” argued that the solution lay in “mutual coercion, mutually agreed upon.” And indeed, such self-enforcing mutual agreements can work effectively in small communities to achieve sustainability. But how do we go beyond small communities to achieve cooperation at the global level?

The theory of cooperation is one of the oldest in evolutionary biology, and understanding the strongest forms of cooperation was a puzzle even to Charles Darwin. Even bacteria achieve cooperation, and cooperative solutions to problems of public goods and common-pool resources are widespread throughout the biosphere. The emergence of multicellularity itself, one of the major evolutionary transitions, is a story of cooperation. But most examples of cooperation depend on either close genetic relatedness or spatial proximity.Human groups form to achieve collective benefits, and they maintain those benefits through social norms, sustained through reinforcement and punishment. As groups become larger and more heterogeneous, social norms become harder to sustain, and formal laws, contracts, and institutions become essential.

To achieve global sustainability, especially with regard to the most difficult features to monetise – like the services that ecosystems and biodiversity provide to humanity-we must find ways to extend cooperation beyond small groups, like the small fishing societies described by the late Elinor Ostrom. Ostrom convincingly argues for a polycentric approach to environmental problems like climate change – that is, for an approach that does not try to do everything at once but instead builds from multiple centres for a more global solution. Trust is central to achieving enforceable agreements, and single global-scale policies are unlikely to engender such trust. Furthermore, because cooperation deteriorates as the size of a society increases, single governmental units are unlikely to succeed in addressing global-scale problems.

Obviously, these national and international structures differ widely in how the powers are distributed among levels; success is in the details. Still, these are the best models we know for national and global governance; the challenge for sustainability is to encourage nations to cede some of their own immediate priorities for the longer-term collective good. This will require not only advances in the theory of international agreements and the design of effective mechanisms, but also the creation of other layers of cooperation at levels in between individual nations and the global society. When nations are the agents in the search for international cooperation, with all the attendant asymmetries, it remains difficult if not impossible to get agreements on issues like climate change and biodiversity loss. Some new dimensions are needed.

Ultimately, we need new institutions and enforceable agreements that not only work today, but also are robust in a changing environment. Despite the unique challenges, and occasional glitches, international agreements have been effective for more than 60 years in combating nuclear proliferation and the use of nuclear weapons, although the robustness of the Nuclear Non-Proliferation Treaty is facing severe challenge today. Thus we have examples of successes, but even in these successes we must recognise risks and the need to be adaptive.

One step in this direction is to create a modular structure to meet global challenges, in which parts can be changed as needed without leading to systemic collapse. For management, modularity means creating firebreaks to impede the contagious spread of disturbance: for example, many diseases spread rapidly within risk groups, like drug users or particular schools, but can then be contained because of the reduced probability of transmission among groups. Indeed, the first line of defense in dealing with an emerging epidemic, from foot-and-mouth to SARS, is to slow down travel, whether cattle or humans, to reduce the rate of spread. The loss of modularity is widely believed to have been a major factor in the catastrophic financial collapse of 2008-the system was too overconnected. Any successful scheme must be adaptive: one can design schemes to deal with today’s threats, but flexibility and adaptability are essential for adjusting to the unforeseen challenges ahead.

The challenge of sustainability confronts us all. It requires cooperation among individuals and nations in making the sacrifices that are in our enlightened self-interest. Beyond that, however, it also requires cooperation among disciplines and among academic, corporate, governmental, and nongovernmental entities in finding solutions that can be maintained. The prospects are daunting at a time when we are seeing increasing political polarisation within and among nations; but there is no acceptable alternative to finding solutions.

Simon A. Levin is the George M. Moffett Professor of Biology at Princeton University in the Department of Ecology and Evolutionary Biology, and the Director of the Center for BioComplexity in the Princeton Environmental Institute.

A version of this article previously appeared in The Solutions Journal.