Comment of the Week, 2003-09-24
On the subject of the environment and technology, D-squared writes,
Future generations cannot make contracts with us, so their preferences about the rate of extraction don’t figure in the market price.
Suppose that the desire for ivory threatens to make elephants extinct. Economists think that part of the problem is that nobody owns the elephants. An owner would have an incentive to maintain the herd.
However, would the owner of an elephant herd still extract too much ivory from the perspective of later generations of consumers?
UPDATE: this is not exactly an issue that has never been thought about. See, for example, Portney and Weyant.