Economics - Section 4 Flashcards
What characterizes common property as “tragedies of the commons”?
when there is no restraint on access (non-excludability) and the resources of the property are overused (rival) and depleted because it is assumed there is no structure of norms, obligations, and expectations that keeps management in place
Why do critics of collective action argue that it [collective action] cannot work?
because of the free rider problem and difficulties of monitoring and enforcing rules and obligations.
What is the expression that is used to determine how much something in the future is worth today (its present value)?
Present Value= 1/(1+r)^t * Future Value -r is the discount rate -t is the length of time I have to wait from today to get it back
What is often used to explain how an emphasis on present choices dominates our concern for the future? In other words, what explains the obligations that present generations might/might not have to direct the decisions of those who are yet to be born?
time value of money
What are the three issues the USAD Economics Resource Guide focuses on in regards to the damages causes by climate change?
1). the magnitude of damages associated with rising global temperatures 2). the calculated social costs of those damages (specifically of carbon) 3). the uncertainty surrounding these estimates
True or False? It can be concluded that humans’ current levels of consumption and resource extraction are sustainable.
False; it is not sustainable as the associated negative externalities and public bads (including greenhouse gases in the earth’s atmosphere) suggest that current climate conditions may be headed towards an economic and ecological crisis
Define cost effectiveness
achieving a specific goal or objective at the least cost
What is the principal/agent problem? Provide an example as well.
the information and monitoring problems faced by a principal (individual/bodies in charge) seeking to oversee many agents (those being monitored) due to higher levels of jurisdiction. For example, as the area of the city that the mayor is trying to oversee it becomes harder to do it as efficiently compared to if the area was smaller. This is because the free rider problem increases as the familiarity between the parties declined; hard to know who is contributing and who is not
What are examples presented in the resource guide collective action succeeding?
groups organizing to confront aggression such as during WWII or in Ukraine after the 2022 Russian invasion
What happens to the value making income in the future worth a lot less as the denominator in the discount rate equation (Present Value= 1/(1+r)^t * Future Value) increases?
it makes the income in the future worth a lot less
What happens if there are high discount rates (r) and long-term future estimates (t) will do what to the present value in regards to the equation: Present Value= 1/(1+r)^t * Future Value
shrink the present value
In regards to the equation: Present Value= 1/(1+r)^t * Future Value, what does it mean if the discount rate (r) equals zero?
future income and consumption is valued just as much as at the present, this reduces the denominator to 1, meaning that we do not discount the future at all but it is given equal weight with the present
In regards to the equation: Present Value= 1/(1+r)^t * Future Value, what does it mean if the discount rate (r) is less than 0 (r<0)?
this means that the future is valued more than the present and we are willing to forgo present consumption, meaning the the discount rate is negative
Which two countries estimate that their SCC is close to zero?
Ukraine and Poland
Rich countries will face more natural disasters & burdens due to climate change. T/F
False
Climate is like the example of the economic house…
Shared obligations, if 1 person doesn’t clean the house looks messy
What is the free rider problem?
People can use public goods without paying for them
What is the SCC?
Social Cost of Carbon. How much damage in $ is each ton of carbon
How many years have climate negotiations (internationally) been going on?
40 years
What is multilateralism?
multiple countries & governments joining to pursue a goal
“While the trading system relies on commercial interdependence, the climate commons depends on _______”
ecological interdependence
What is a “GEO”
Global Environment Organization. A proposed institution for putting regulations on climate change on a global scale. dating as far back as the 1970s, bit still never put in place.
Public goods (& bads) are non___ & non___.
non-rival & non-excludable
what city established the first binding emission reduction target to limit greehouse gas emissions in 1997?
Kyoto, Japan
What is required so a choice in economics can be cost effectively?
Comparative advantage
What major engine was invented in 1698 and what effect did it have?
The Savery steam engine is invented; the dawn of the Industrial Age begins with a reliance on fossil fuels.
How does the trading rules under the WTO system affect trade?
Trading rules under the WTO system encourage and enforce reductions in protection and more open trade.
What is the standing Committee on Trade and Environment of WTO goal?
In 1995, the WTO created a standing Committee on Trade and Environment due to widespread perceptions that trade expansion might be environmentally damaging and that environmental protection measures could act as barriers to freer trade.
When and by who was the ITO proposed and rejected?
At a conference in Havana, a proposal emerged in 1948 for an International Trade Organization (ITO). The ITO proposal was blocked in the U.S. by a hostile Republican Congress.
How can geoengineering bring “free driver” problem?
Raises the problem of the structure of authority governing such a decision. Geoengineering could have a “free driver” problem in that one party may decide to act unilaterally.
What are the reasons to the projected economic damages to the U.S. economy?
Projected economic damages to the U.S. economy, as well as the rest of the world, due to climate change include declines in agricultural productivity, increased mortality, added energy use, storm activity, drought, and floods.
AT what conference where the GATT world trade rules created?
The GATT world trade rules are created at the Havana Conference.
When was the UNEP created?
In 1972 the UN Environment Program (UNEP) is created.
When and where was the first world climate conference held?
In 1979 the First World Climate Conference is held in Geneva, Switzerland.
When was the Montreal Protocol on Substances that deplete the Ozone layer adopted?
In 1987 The Montreal Protocol on Substances that Deplete the Ozone is adopted.
What did the Paris agreement of 2016 accomplished?
The Paris Agreement legally binding an international treaty on climate change, adopted by 196 Parties at the UN Climate Change Conference, including the U.S. It enters into force in 2016.
What are the two ways externalities can reflect and what reflects them?
Individuals, firms, (or in climate’s case) countries reflect externalities in two ways: unidirectional (one way) or reciprocal (two way) Climate is one of the externalities that involve reciprocal interactions. However the effects aren’t evenly distributed. Such as the Greenhouse Gas Emissions. U.S. and China emit a substantial amount more than others.
What determines how parties can control externalities? Give an example.
Severity, type, period of time control must be exercised. Example: Pollution from coal-fired power plants, can be controlled by scrubbers on smokestacks, but smoke from fires can not. The Coal-Fired plants (from 1970 legislation) took years to pass, implement and litigate.
What are ways to promote changes in behavior to resolve externalities related issues?
inventive such as taxes and subsides, and negotiations. Legal action such as suits or court-ordered demands happen. With the exception of negotiations, these require a third party, such as tax, subsiding authority, administrative agency, court, or an international body
True/False: In climate policy, many remedies are beyond capacity of local authorities, requiring higher actions or organization and jurisdiction which always exists.
False: In some instances higher actions of organization and jurisdiction do NOT exist. For example, there are no institutional guardians of the atmosphere that have the ability to order countries to cease and desist
A public good is something that is supplied in a large area by many people. What are two defining characteristics that a public good will have?
- They are Non-Rival, meaning, consumption of the good does not compete with your consumption of the same good. 2. Non-Excludable: Individuals cannot be kept out or excluded from consuming
Contrasting the fact that a public good is non-excludable, what can be said about the duality of private and public goods, and what problem does this set up for public goods?
In a competitive market, private goods all have the same price (in equilibrium), people will only consume as much as needed. Since, public goods goods are non-excludable people have different values of them, this sets up the Free Rider problem
What is the Free Rider problem?
consuming a good for less than its value. (If no one knows how much you are willing to pay, its easy to undervalue it, especially if it’s just an expectation to pay.)
Economically, what problem is one of the major reasons reducing Green house gas (GHG) emissions falls short.
The Free Rider Problem, reducing GHG emissions requires contributions, free riding typically means these contributions will fall short, requiring interventions to encourage/enforce the lacking contributions.
Institutions need to provide “cost-effective” remedies when large-scale externalities are having problems. What issues can rise from the scale they are designed?
issues of space, authority, and jurisdiction
How do you aggravate a free rider in context of space, authority and jurisdiction?
When an area public goods are supplied is smaller, individuals can interact. as the space gets larger, organization issues are more complex and familiarity between parties decides aggravating free riders
What is the Principal/agent problem?
Larger space and extent of public good provision individuals and firms cede to authority, at higher levels of jurisdiction it becomes harder for principals to oversee and control those they’re responsible for monitoring (the agents)
What is an “Economic House”?
Another way of thinking about the problem of coordination to provide public goods or reduce public bads
What is the social cost of carbon (SCC)
an estimate in dollars of the economic damages that would result from emitting one additional ton of carbon dioxide into the atmosphere
True or false everyone in America agrees on how much the SCC is
False, some think its about 51$ per ton while others belive its 190$ per ton
What are Poland’s and Ukraine estimate for the SCC
they are both about about 0$ per ton
How much less is each year cared about in the SCC estimate made by the EPA in 2022
Each subsequent year is worth 98% of the last
What is Swedes estimate for the SCC
126$ per ton
About what percent of the world lives less than 100k from the ocean
40% of the worlds population
What are the two location based factors that can change the SCC for poorer countries
latitude, countries that are closer to the equator have a worse time due to climate change, and, distance from water, countries less than 100km from the ocean have a worse time due to climate change
What eight country’s or areas has the World Programme deem as the most in risk to danger by climate change
Sudan, Madagascar, Pakistan, South Sudan Somalia, Chad, Sahel, dry corridor of central America
If you have a higher discount rate for the SCC what does that mean
You value the future less when calculating the social cost of carbon
What eight places did Time Magazine identify with special vulnerability to climate change
Haiti, Yemen, United Arab Emirates, Lagos, Nigeria, Manila, Philippines, Kiribati
Other than locations what factors best tell how bad an area would suffer under climate change
The average household income and whether or not most the food is produces inside or outside the country
True or false everyone in America suffers the same amount due to climate change
False, Due to America’s vast location and drastic differences in finalities states different places in the US will be effected differently
What is an externality, according to economics?
irregularities in the orderly functioning of markets
True or False: Externalities are exceptions to the rule of market-based behavior.
False
Do externalities occur regularly or rarely?
regularly
What do externalities result from?
the interdependence of individuals, firms, and countries in which markets do a poor job of signaling behavior and direct, uncompensated, and often unintentional actions by individuals and firms that affect others.
What atmospheric conditions have the characteristics of externalities?
smoke from forest fires and flooding from heavy rainfall
What do externalities affect?
the cost and benefits faced by individuals and business firms
Are externalities controllable?
not easily, and they’re typically set in place
What is an example of a negative externality?
smoke and water pollution contaminating air and water, which raises prices
Why do economists prescribe corrective measures?
the market price mechanism doesn’t fully reflect the impact of externalities
What is an example of a positive externality?
an orchard next to a beehive, both parties benefit from the exchange
What did a 2022 Stanford University study reveal about the increase in the number of people exposed to toxic pollution from wildfires between 2006 and 2020?
the number of people exposed to toxic pollution from wildfires for at least one day in a year increased 27x during that period.
What are climate commons?
the shared atmospheric environment of the globe
The term sustainability is used to encompass issues of what two things?
environment, ecology, and climate.
Many people make wills to allow for an orderly transfer of assets to their ___
Children
Actions we do today will affect present generations, and be the life of who?
future generations
in an intergenerational contract confers an obligation to consider even if not born yet
future generations’ welfare
When what occurs is the less weight is given to the value of what is past?
positive discount rate
what occurs if the discount rate is positive?
the farther back in time we go,
Is it clear exactly what form either remembrance of the past or anticipation of the future takes in the brain or whether they are similar constructions?
no, it is unclear
It is important to incorporate past experience, including experiences of what into the present and future real estate?
natural disasters associated with climate change
estate.40 Experience and experimental data suggest that we are what?
Myopic
Where and when was the first World Climate Conference held?
Geneva, Switzerland in 1979
Where and when did the first environmental summit met?
Stockholm, Sweden in 1972
How long have climate negotiations at international level been going on?
More than 40 years.
When was the Kyoto Protocol adopted and entered into force?
It was adopted in 1997 and entered into force in 2005.
When did the Biden Administriation rejoin the Paris agreement?
2021
When was the the California Air Resources Board created?
1960s
When is the U.S. Clean Air Act Amendments of 1990 credited with?
It is credited with lowering the cost of emissions reductions
by half.
What did Bretton Woods create in 1944?
The International Bank for Reconstruction and Development.
What did the European Union’s Water Framework Directive (WFD) successfully do after two decades?
Connecting national, regional, and local decisions on agricultural chemicals and waste runoff.
What did the 1987 Montreal Protocol do?
Eliminate gases destroying atmospheric ozone.
Where and when did the COP 27 take place?
COP 27 took place in Sharm el-Sheikh, Egypt in November 2022.
Which two countries have shown skepticism about climate change interventions?
Ukraine and Poland.
Where and when was the first Earth Summit held?
Rio de Janeiro, Brazil in June 1992.
When was the Intergovernmental Panel on Climate Change (IPCC) established?
It was established in 1988.
When did the U.S. withdraw from the Paris Agreement?
The U.S. withdrew in 2017
When did the Doha Amendment extend the Kyoto commitments
It extended the commitments in 2012.
What is the main goal of the UN Framework Convention on Climate Change (UNFCCC)?
To stabilize greenhouse gas concentrations to prevent dangerous human interference with the climate system.
What year was the Paris Agreement reached?
The Paris Agreement was reached in 2015
What significant climate action was taken by the Biden administration in 2021?
The Biden administration rejoined the Paris Agreement
When did COP 26 take place?
COP 26 took place in Glasgow, Scotland in December 2021
What did the 1997 Kyoto Protocol establish?
Binding greenhouse gas reduction targets for industrialized countries.
What did the Emissions Trading System (ETS) aim to regulate
It aimed to regulate greenhouse gas emissions through market-based trading.
What was a key outcome of the 1987 Montreal Protocol?
The elimination of substances that deplete the ozone layer.
Many individuals actually dissave by doing what?
borrowing more than they are worth to consume beyond their means,
What will happen due to differences of location and topography across localities, states, and nation?
Global bargaining over the future of the climate commons will require that these very different circumstances and challenges be reflected in any negotiations over a path forward.
What were the primary fossil fuels used for energy during the beginning of the industrial age?
Wood, coal, oil, and natural gas.
Where did the burning of forest and peat lands have the largest effect on CO2 levels?
Asia
Where did the conversion of rainforest to pasture have the largest effect on CO2 levels?
Latin America
By how much did the prices of large-scale solar PV fall between 2009-2019?
90%
In 2020 wind, solar, and other renewables were how much cheaper than the least expensive new fossil fuels?
62% cheaper
What did Joe Biden sign in 2022?
The Inflation Reduction Act of 2022
What did the “Inflation Reduction Act of 2022,” do?
Create legal and financial incentives to deploy renewable energy resources.
What is one reason cited by advocates for a “wait and see” approach to climate change?
Job loss
What can be seen in the photo used to represent job loss?
An unemployed coal miner looks for jobs at the Kentucky Career Center.
Since the signing of the “Inflation Reduction Act of 2022”, companies have announced plans to build or expand how many clean energy manufacturing facilities?
83
The wildfires causing airborne pollution in New York City in June 2023 were located in
Canada
Between 2006 and 2020, the number of people exposed to toxic pollution from wildfires at least one day per year increased
27 times
Which New York City official declared on June 7, 2023, “Climate change is real. It is here.”?
Health Commissioner, Dr. Ashwin Vasan
The creation or persistence of an economic externality is an example of
market breakdown
How do natural disasters MOST closely resemble externalities?
Human activity can cause them or magnify their effects
Why are international agreements so vital to correcting climate externalities?
Government-based solutions are less effective at the international level.
A synonym for “one-way externality” is
unidirectional externality
Which of the following facilities is MOST likely to use smokestack scrubbers?
a. a slaughterhouse
b. a dam
c. a solar farm
d. a coal-fired power plant
e. a radio transmission tower
a coal fired power plant
The first laws mandating the use of scrubbers in industrial processes date to the
1970s
An externality becomes a public good or bad by affecting
large numbers of people
Under competitive market conditions, a public good
is equally consumed but not equally valued
The first organizers of public radio stations in the United States were
universities
Association of College and University Broadcasting Stations in 1925
Trying to achieve high levels of benefit for a low price is a search for
cost effectiveness
A public good covering a small space encourages
direct interaction between parties
Why do climate-based public goods and bads demand high-level solutions?
a. International bodies have the strongest enforcement mechanisms.
b. Cross-border subsidies require a global banking authority.
c. Local agents’ actions have effects beyond their immediate areas.
d. Local authorities cannot control pollution within their jurisdictions.
e. The Global South contributes low GHG emissions but suffers high consequences.
Local agents’ actions have effects beyond their immediate areas.
How does the concept of the economic house break down at the international level?
a. The economic house has a central authority the global community lacks.
b. The economic house has weaker enforcement mechanisms.
c. It is difficult to “evict” a problem nation from Earth.
d. The “chores” of an economic house have no international equivalent.
e. There is no authority layer above the global “house”.
It is difficult to “evict” a problem nation from Earth.
A public good that is a subunit of another public good is
nested
Which of the following levels of garbage collection is LEAST affected by the principal/agent problem?
a. along a street
b. across a city
c. inside a neighborhood
d. on a block
e. within a household
within a household
The norms for a public good derive from
agent expectations
The establishment of rules for a public good gives rise to one or more
institutions
The MOST essential criterion for the success of an environmental agency in tackling pollution is
a. the ability to fine offenders
b. voluntary compliance with rules
c. monopoly on the use of force
d. the power to make regulations
e. derived power from a higher agency
voluntary compliance with rules
How is collective action MOST relevant to international climate agreements?
a. It aligns parties to these agreements toward a single set of solutions.
b. It provides a neutral ground for negotiating these agreements.
c. It puts nations and nonprofit organizations on equal footing.
d. It settles disputes over an agreement’s basic principles.
e. It predicts which parties to an agreement will have the most influence on it.
It aligns parties to these agreements toward a single set of solutions.
Why is pollution enforcement more expensive at the national level than at the state level?
a. National entities have more barriers to instituting taxes.
b. The principal/agent problem is worse at the national level.
c. Voluntary compliance goes down as principals become more remote.
d. Monitoring and enforcement require more transactions with their attendant costs.
e. Authorities at the national level must deal with international norms.
Monitoring and enforcement require more transactions with their attendant costs.
A tragedy of the commons requires a lack of effective
institutions
The Ukrainian response to the 2022 Russian invasion is an example of successful
collective action (much of Ukrainian society mobilized and aligned to resist the Russians)
A poorly managed country has dysfunctional
a. bilateral relations
b. local knowledge
c. agents
d. demarcations
e. norms
norms
What is the largest unit of management for climate action?
Earth
The solution to the question, “Who guards the guardians?”, is
mutual supervision
Which of the following concepts BEST explains why much economic decision-making privileges the present over the future?
a. tragedy of the commons
b. principal/agent problem
c. time value of money
d. imperfect collective action
e. free rider problem
time value of money
A person who lends $20 while expecting back $22 in one year’s time is expressing a discount rate of
10%
In the discount rate formula, the discount rate itself is represented by the variable
r, the number is usually positive
In the discount rate formula, time is a(n)
exponent
Present value is equal to future value when the discount rate is
0
When the discount rate “r” equals zero, 1 + 4 = 1, and so 1 / (1 + r) also equals 1. This makes Present Value = Future Value
Why is a negative discount rate emblematic of thinking about the future?
It values future consumption more than present consumption
The discount rate formula is an expression of
time preference
Which of the following classes of assets relies MOST on climate predictions for valuation?
a. real estate
b. government bonds
c. precious metals
d. household goods
e. technology stocks
real estate
Why does the discount rate take on an ethical dimension when applied to climate economics?
The discount rate affects what present humans leave for future humans.
An individual who dissaves has
a. engaged in mutual aid
b. borrowed more than they can repay
c. committed to the future over the present
d. avoided eco-negative investment
e. spent all they earn
borrowed more than they can repay
Which of the following economic decisions falls LEAST within the field of sustainability?
a. choosing which animal to print on a T-shirt
b. selecting a design for an automobile
c. clearing or maintaining a rainforest
d. building a landfill or a recycling plant
e. buying furniture new or secondhand
choosing which animal to print on a T-shirt
To achieve true sustainability, world GDP must
fall on a global basis
In the organizational acronym IPCC, the “I” stands for
Intergovernmental
Intergovernmental Panel on Climate Change
According to Hsiang et al. (2017), if temperatures rise 9°C above the baseline by 2080, the likely damage to the United States economy is between
6% and 14%
The climate change-induced damage to the late 21st century United States economy in Hsiang et al. (2017) includes all of the following costs EXCEPT
a. increased energy use
b. destruction from storms
c. collapse of fisheries
d. temperature mitigation efforts
e. agricultural disruption
temperature mitigation efforts
The temperature baseline for Hsiang et al. (2017) is set at the
preindustrial period
Why does the predicted damage-temperature curve in Hsiang et al. (2017) rise more quickly as temperatures increase?
Damage to biological systems will become increasingly severe.
How does the IPCC express the possibilities and uncertainties of future climate choices?
It presents “pathways” representing outcomes of various choices.
The Polish and Ukrainian estimates of the social cost of carbon are
near zero
What is the CLOSEST to the per-ton social cost of carbon figure used by the Biden administration?
$51/ton
How does the discount rate affect estimates of the social cost of carbon?
Lower discount rates emphasize the risk of damage to the future.
What nations has the HIGHEST estimate of the social cost of carbon?
Sweden at $126/ton
What BEST explains why poorer nations are more vulnerable to damage from climate change than wealthier nations?
They have less financial cushion to absorb the damage.
Which of the following regions is MOST vulnerable to economic damages caused by changes to the climate?
a. South Asia
b. Central North America
c. Western Europe
d. Eastern Europe
e. Northern Australia
South Asia
As temperatures on Earth warm, the most vulnerable populations are closest to the
equator
Approximately what percentage of Earth’s population lives within 100 kilometers of an ocean?
40%
The vulnerable Sahel is BEST described as a(n)
transition zone
The Dry Corridor is a climate-vulnerable region of
Central America
According to Time, what Caribbean nations is MOST highly vulnerable to climate damage?
Haiti
Which of the following Southeast Asian cities did Time magazine highlight as being vulnerable to climate damage?
a. Hanoi
b. Kuala Lumpur
c. Bangkok
d. Manila
e. Singapore
Manila
Decreased rainfall in a region can lead to drought and
desertification
All of the following energy sources are based on hydrocarbons EXCEPT
a. coal
b. geothermal
c. oil
d. natural gas
e. wood
geothermal
Which of the following continents saw the GREATEST use of steam engines in the 1700s?
a. South America
b. Australia
c. Europe
d. Asia
e. Africa
Europe
The destruction of rainforest to create agricultural land is of particular concern in
Latin America
Which of the following Canadian provinces is MOST notable for the presence of tar sands, a source of oil?
a. Ontario
b. Alberta
c. Prince Edward Island
d. Manitoba
e. New Brunswick
Alberta
Why did natural gas prices stay relatively low into the 2010s?
Fracking made new sources of natural gas accessible.
Between 2009 and 2019, prices for large-scale photovoltaic technology fell by around
90%
Compared to today’s prices, in 1991, lithium-ion batteries were approximately
33 times as expensive
Between 2010 and 2020, the annual decline in solar costs was
15%
The Andasol power station is an example of renewables investment in
the European Union
Why were Western economists puzzled by China’s heavy investment in renewable energy in the 2010s?
China’s decision went against their analyses.
According to IRENA figures, compared to new fossil fuels, renewable energy cheaper by about
60%
To affect climate trends by 2030, the Earth needs to reduce its yearly carbon dioxide released by
15 gigatons
To achieve net-zero emissions by 2050, World Bank estimates that investment in renewables by 2030 must reach
$1 trillion
Why do some capitalist economists argue against governments “playing favorites” when making climate investments?
They believe that the investment decisions are best left to markets.
The numerous externalities and public bads seen in climate economics are signs of
market failure
As legislation, the Inflation Reduction Act was known as
a. H.R. 5376
b. H.R. 93
c. S. 71
d. S. 1401
e. S. 432
H.R. 5376
How does the Inflation Reduction Act subsidize individual taxpay
It creates a federal tax deduction for part of the spending on those systems.
How many new or expanded clean energy facilities were announced in the first year after the passage of the Inflation Reduction Act?
83
An adaptation strategy for climate change
tries to minimize harm
In 2021, the number of poll respondents in the United States who stated climate change was not happening was
one in ten
All of the following situations exemplify a “doing nothing” approach to climate change EXCEPT
a. worry about job losses and other economic harm in the present
b. thinking that corporations are doing enough to fight climate change
c. disbelief in climate change itself
d. perceiving that climate change is too massive and complex to fight
e. resistance to building nuclear power plants
resistance to building nuclear power plants
Why are the worst-case scenarios for climate risks difficult to quantify?
Distinct risks have multiplicative effects that are hard to calculate.
A “no regrets” approach to climate economics
emphasizes taking action even if disaster might not happen
“No regrets” approaches to climate economics use a discounting approach known by the Greek letters
beta and delta
What does a quasi-hyperbolic approach to discounting do?
applies different discount rates to near-term and long-term decisions
