The Treatment of Time

Climate change takes place over decades, centuries, and millennia. The consequences of actions taken now also work themselves out on time scales covering multiple generations. The persistence of CO₂ in the atmosphere depends on the long-term response of the biosphere to increased temperatures and concentrations, and the atmospheric lifetimes of many of the non-CO₂ greenhouse gases are over 100 years. The achievement of thermal equilibrium between the surface layers of the ocean and atmosphere takes decades, and achievement of equilibrium between the different layers of the ocean requires even more time (IPCC 2001a).1 These physical facts mean that the treatment of events and policies that unfold over very long stretches of time must be a central feature of the economic analysis of climate change. Not only do policies have long-lasting consequences, but the basic conceptualization of the economic system itself has to reflect the lengths of time involved.