Abstract
The scarcity value of diminishing resources should be reflected in the discount rates on investments involving the public sector and environmental resources. Lowering the discount rate as a conservation measure may actually cause more rapid depletion of resources. Environmental resources, which provide recreational or other services at the site, differ from extractive resources in that use of extractive resources is only an intermediate good. In some instances, environmental resources are even more irreplaceable than extractive. The Hells Canyon project is used to illustrate the situation in which a decision to proceed with a project precludes the possibility of realizing other future benefits, while a decision not to proceed leaves the option for future development. (DCK)
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