Estimation of implicit discount rates for climate change adaptation policies

Abstract

This article used evidence from tourists’ willingness to pay (WTP) for a set of climate change adaptation policies to estimate implicit discount rates under different discounting structures. A choice experiment with two different split samples framed at two different time horizons was used to analyse how WTP changes as a function of the timing of the expected benefits. Results confirm that individuals are time sensitive to different horizons and provide support for the use of a very low discount rate in the evaluation of policies having effects in the long and very long run and show that the social acceptability of climate change (CC) adaptation policies can be affected by the timing of the benefits and the use of one or another discounting model.