Hello InVEST community,
I am working with the carbon storage and sequestration model. I have a question regarding the market discount in price and the annual rate of change in the price of carbon.
The research of Ricke et al. (2018) separated two types of market discount rates: (i) fixed and (ii) growth-adjusted.
Growth-adjusted rate is calculated as followed (not relevant, but this is based on Ramsey 1928)
Pure rate of time preference (2 %) + Elasticity of marginal utility (1.5) × Country average growth rate
My question is, is the “annual rate of change” in InVEST the same as the “pure rate of time preference” described in Ricke et al. (2018)?
Thank you and regards, Andreas