Hyperbolic discounting and the time‐consistent solution of three canonical environmental problems

In this paper I propose a time-consistent method of discounting hyperbolically and apply it to three canonical environmental problems: (i) optimal renewable resource use, (ii) the tragedy commons, (iii) economic growth pollution. show that, irrespective potentially high initial discount rates, hyperbolic leads always steady state maximum yield, or, if environment enters utility function, where Green Golden Rule applies. While (asymptotic) extinction is real threat under exponential impossible discounting. This result also confirmed for open-access resources. model pollution, establishes capital accumulation modified Rule.