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discounting of natural assets

The rate to discount future income in the net present-value method of valuing natural resource assets. The discount rate expresses the degree to which an economic agent prefers income today rather than in the future. This time preference will vary depending on the agent in question. In general, individuals and businesses have higher rates of time preference than governments. In addition to time preference, discount rates can also reflect risks associated with the future returns expected from an investment.

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