Frikk Nesje

What do you research?

My research interests are primarily within resource and environmental economics. I am also interested in welfare economics and game theory. Recently I have studied whether we can infer the social discount rate, which determines the comparison of costs and benefits over time in public decision making, from saving behaviour in the market. This approach is generally taken in research and policy.

While I am currently broadening my research agenda, most of my current research focuses on the social discount rate, its foundation or use. This includes both conceptual and more applied work.

Why is it so important?

The social discount rate is the most important variable in any assessment of public programs, policies and projects because it determines how costs and benefits are compared over time. Suppose that climate policy today guarantees a benefit of 1 000 DKK in 100 years. With a social discount rate, or return requirement, of 1.4 percent, society should be willing to invest 250 DKK today to receive the benefit. If the social discount rate is 4.5 percent, then we should be ready to give up only 10 DKK.

That my research has influenced public guidance in Germany, Ireland, the Netherlands, New York State, Norway, the UK and the US, and also been referred to in public documents by the European Union, the Dasgupta Review, the IPCC, the IPBES, the OECD, the Office for National Statistics, Ontario, Sweden and the UNFCCC indicate the relevance.

A project you are proud of?

I am very proud of an early stage project that I am currently working on. The aim of the project is to develop a new theory for imputing evaluation criteria for how to choose between public programs, policies and projects from how choices are actually made. These evaluation criteria would not only be limited to typical formulations of the social discount rate, but can take any form and be revealed with other relevant information regarding the choices. The development of the theory comes with the design of an experiment that allows for calibration of the evaluation criteria.

Updated January 2023

Through his participation in the Mary Centre’s Policy Fellowship Frikk has, among others worked with Anne Thomassen, Head of Division in the Ministry of Climate, Energy and Utilities, and Paolo Perotti, Chief Legal Officer in the Ministry of Environment (Policy Fellowship 2022-23 - Green Transitition).