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YU News

Katz Publishes Paper on Financing Climate Change

Dr. Yuri Katz, a professor in the mathematics program at Stern College for Women and a director at S&P Global Market Intelligence, co-authored a paper for Physica A: Statistical Mechanics and its Applications with Victor E. Gluzberg of PTC of Haifa, Israel. Titled “Planetary boundaries of consumption growth: Declining social discount rates,” the paper lays out a way to calculate “climate finance with benefits on current investments deferred to centuries from now.”

“A core principle of finance—time value of money—holds that the present value (cost) of the future cash flow (benefit) is worth less the longer investor should wait to receive it,” noted Dr. Katz. The calculations in the paper are aimed at figuring out the best way of justifying present investments in mitigating something large and intergenerational like climate change based on how investments are discounted in value over time.

The full paper can be read here.