Pluralistic discounting recognizing different capital contributions: An example estimating the net present value of global ecosystem services

Discounting the future is essential to inform long-term decisions, but the future of humanity is being put in jeopardy by using the same discount rate for all capital types. Different types of capital assets (built, human, social, natural) have inherently different characteristics and contribute differently to the production of all goods and services. They will behave and depreciate differently and will thus require different discount rates and different approaches to discounting. Here, we estimate the net present value (NPV) of global ES recognizing that ecosystem services are the product of the interaction of the four different types of capital that each have different characteristics. We combine a range of different discount rates for each of the 4 types of capital according to their relative contributions to the production and value of each of 17 global ecosystem services. We estimate that the NPV of global ES ranges from $5.7 to $9.1 × 10¹⁵ (quadrillion 2011$USD). For comparison, the NPV of global GDP estimated in the same way would be about $2.9 to $4.8 × 10¹⁵. This more nuanced approach to discounting can improve information for long-term project appraisal and decision making and help build a more sustainable and desirable future.