Discounting our future

When people say that the Social Policy Bond idea is unrealistic and I think of the decades that I've been trying to promote it with little success, I need only remind myself of the grotesque, disastrous ways in which policy is currently made to remind myself that the bonds do actually have a contribution to make. 

For example: discount rates. Geoff Mann writes:

The rates at which we currently practice discounting mean that the long-term future of humanity, the living world, and the planet itself is not metaphorically but literally valueless. The price of tomorrow, Geoff Mann, reviewing Discounting the Future: The Ascendancy of a Political Technology by Liliana Doganova, 'New York Review of Books', issue dated 23 October 2025

As Mr Mann writes, the choice of discount rate that policymakers use can hardly be overstated.

The 7 percent discount rate - commonly used by the Trump administration...- means that our welfare today should be valued at six times that of people in 2050. ... We have unilaterally indebted future generations (and the rest of life on earth) to the present, and the discount rate is the interest we make them pay on a debt we have fabricated out of nothing but our own narcissistic accounting. 

'Motivated reasoning' is 'a cognitive bias that influences people to favor their existing beliefs, affects decision-making and critical thinking.' It seems to me that using a discount rate to evaluate the long-term impact of policies, and which discount rate to use, are a form of motivated reasoning. If people in government or elsewhere wants a project to go ahead, they'll choose a high discount rate; if not, a low discount rate. 

Most democratic governments have a short time horizon, so that long-term goals, such as the survival of humanity can optionally be valued at almost nothing when it suits their purpose. A high discount rate is one way in which policies are made that would be unpopular if people knew the facts. The opacity and sheer length and tedium of the policymaking process are others. All this means that only powerful and already-wealthy interests can afford to follow and influence the process. Currently, policies that have long-term implications are a by-product of politicians' numerous short-term calculations. The results are plain to see: at the global and national levels, a despoiled physical and social environment and a growing potential for military conflict. I don't believe that most people would choose these outcomes, and that is why I advocate that our long-term goals need to be expressed in terms that ordinary people can understand so that we can, if we wish, participate in choosing and prioritising them.

A Social Policy Bond regime would begin with broad goals that are meaningful to ordinary people: the over-riding goal would be the survival of humanity. Precise definitions would be the subject of debate and discussion between experts and the public. National goals could include a healthy population, a cleaner environment and reduced crime. All would have to be sustained before people would be rewarded for achieving them: the goals would all be long term in nature - a contrast to the wild and deadly short-term thinking that permeates the current policymaking environment. 

Why we must target outcomes

Madeleine Cuff writes:

Levels of hydrogen in the atmosphere have jumped by 60 per cent since pre-industrial times, underscoring the dramatic impact fossil fuel burning has had on the planet's atmospheric composition. Although hydrogen isn't a greenhouse gas, it has an indirect warming effect through reactions with other molecules. Atmospheric hydrogen is rising, which may be a problem for the climate, Madeleine Cuff, New Scientist, 19 September 2025 (my emphasis)

'[H]ydrogen isn't a greenhouse gas' means that it's not been targeted for reduction, as have carbon dioxide, methane and others - and that is exactly why we need to be targeting outcomes, rather than ways that we currently think might help achieve them. Our scientific knowledge is expanding rapidly: we didn't know that hydrogen has a warming effect, and still less do we know which are - and which will be - the best ways to address climate change. To repeat: we need to be targeting outcomes. I suggest that our desired outcome should be a combination of physical, biological, financial and social variables, all of which will have to fall within approved ranges for a sustained period before we can say that we've achieved our climate goal. The focus must be on the desired outcome; current policies are incapable of adapting to our growing knowledge of the climate and its impacts on human, animal and plant life. 

Climate Stability Bonds would be one way of encouraging approaches that adapt to our growing scientific knowledge about the causes, and effects of climate change on our environment. A wide array of approaches will be necessary, and the focus will need to be on more than gas emissions, more than the composition of the atmosphere. By targeting desired outcomes, the bonds would stimulate diverse approaches, and reward people for achieving them. Many of our environmental and social problems are too complex and long term to be targeted by policies that depend on ossified science. Social Policy Bonds, by targeting outcomes, would stimulate the diverse, adaptive approaches that we need to achieve them. 

The irrelevance of vague goals

I have my own ideas about how best to tackle climate change, and they don't necessarily entail cutting back on greenhouse gas emissions but, accepting that such cutbacks have become almost the sole focus of our climate change activity, the gap between rhetoric and reality is spectacular:

Despite all the disasters, all the models, and all the conferences, in 2022 there were at least 119 oil pipelines in development around the world, plus 447 gas pipelines, 300 gas terminals, 432 new coal mines, and 485 new coal power plants. As the historian of science Jean-Baptiste Fressoz showed in his recent book More and More and More, despite the vast quantities of talk and money invested in producing a technological “energy transition,” last year the world burned more coal and more wood than ever before. Trevor Jackson, How to blow up a planet, New York Review of Books, dated 25 September 2025

Sadly, there are parallels in other concerns of great importance to humanity.   

Tong Zhao, writes in the Economist:

China’s silence about the ultimate size and purposes of its nuclear forces feeds fears of a doctrinal shift from pure deterrence towards a willingness to consider the first use of nuclear weapons. American strategists feel compelled to map detailed nuclear-war scenarios between the two countries—ranging from limited regional exchanges to all-out homeland strikes. This, in turn, is likely to push China towards more advanced nuclear-warfighting preparations. Even if deterrence never fails and luck never runs out, the process ensures an unwinnable arms race. Tong Zhao, China should not fuel an arms race, says a close watcher of its nuclear policy, the Economist, 3 September 2025 

The common theme is our utter incapacity to solve these huge, urgent threats to our existence, despite the myriad conferences, agreements, national and supranational bodies, philanthropic and non-governmental organisations whose sole remit is to ensure that we don't blow up the planet. Our institutions and so-called leaders can get away with failing us in this way because there's no accountability. They are good at dreaming up lofty, superficially attractive goals, such as limiting world temperature increases; and the US can spend 1.5 trillion dollars (over 30 years) to maintain its nuclear arsenal so that it can 'field a credible deterrent that can deter, and, if necessary, defeat, adversary aggression and nuclear coercion.' But there is no mechanism or incentive to convert pledges to reduce greenhouse gases (let alone, deal with climate change) or to deter nuclear aggression into their actual fulfilment.

My suggestion is that we have broad, meaningful targets, and reward people for achieving them. Most people don't care about greenhouse gas emissions. We care a little more about the composition of the atmosphere, and much more about the climate's impact on human, animal and plant life. It is those impacts that we need to target for reduction, not the alleged means of reducing them. Similarly, we are paying people - extravagantly - to play around with their nuclear warfare scenarios and to build ever more nuclear weapons, rather than rewarding people to ensure nuclear peace. In both cases there is a mismatch between what our bureaucracies do with our money, and our real wishes and needs.

A Social Policy Bond regime would be different. It would start by identifying those real needs, expressing them in explicit, transparent, verifiable terms. So, rather than target climate change by focusing almost exclusively on greenhouse gas emissions, we'd identify exactly what outcomes we trying to achieve. These would probably be an array of physical, biological, social and monetary targets, all of which would have to fall within a specified range for a sustained period before people would be rewarded for achieving them. And our goal with nuclear weapons is to ensure that none of them are ever used. It is sustained peace that we should be rewarding; probably all of the 51 peace-building think-tanks and relevant committees in the United Nations and elsewhere are staffed by dedicated, hard-working employees and do some useful work, but there is no system in place to reward them in ways linked to their success or otherwise in ensuring peace. The issue is not (only) about raising their salaries, but about giving efficient bodies more resources for their most promising and successful approaches. Identification of clear, verifiable and meaningful outcomes is the essential first step in a Social Policy Bond regime. Channeling the market's incentives and efficiencies into achieving these outcomes is the next step. 

For more about Climate Stability Bonds, see here. For more about applying the Social Policy Bond idea to conflict reduction, see here. To read or buy my recent short book about World Peace Bonds, see here. 

Long termism without dictatorship

Some things are easier in dictatorships. Large projects such as highways, dams, and transport networks can be built swiftly, often with minimal public consultation or opposition. The same with strict law enforcement, mandatory vaccines, lockdowns, or sweeping economic or educational reforms. But the relative ease with which dictatorships carry out such policies comes at significant cost to individual rights or societal well-being. In democracies, vested interests are too often (in my view) successful in opposing any reforms that could generate net benefits to society. The can gets kicked down the road. The result? Spiralling government debt and inefficient public services. 

Social Policy Bonds offer a means by which measures that will benefit society only in the long term could be enacted. They're more palatable than dictatorships, because they would create a coalition that could oppose or creatively encourage vested interests to fall in with society's needs. A bond regime would aim for long term goals, such as much-reduced crime rates, improved health, or full employment. These goals would have to be sustained for decades before redemption funds would be paid out but, because the bonds would be tradable, bondholders would not have to hold them until they were redeemed. They could do what they can to advance the goal, then sell their bonds and realize a capital gain. 

A long term view is qualitatively different than the more usual, short-term approach of democracies. We can see this clearly at the global level too. For example, peace in the short term can signify nothing more than a temporary lull in overt hostilities, giving opposing sides time to accumulate more weaponry and continue to intensify hatred of each other. A temporary cessation of conflict could just be the precursor to an explosion of hostilities later on. But, a decades-long absence of conflict, as would be targeted by World Peace Bonds, could be qualitatively different. The bonds could help bring about a warm peace - difficult to quantify and define, but achievable simply because, with a long time horizon, bondholders would invest in, and benefit from generational changes in education, media influence, and the possibilities of forgiveness. Bondholders, in working towards a decades-long peace, could create a warm peace. Not always - Egypt and Israel have had a long period of peace marred by some degree of antipathy but even so, simply because of the length of that peace, war is less likely to occur: both sides' interest in pursuing that particular conflict, and the capacity to do so, have atrophied over time. 

The goals of any Social Policy Bond regime, whether they be national or global, would be agreed by society as a whole. I think it would be beneficial to focus society's aspirations on the outcomes we wish for in the long term. Doing so would attenuate the polarisation that we see in today's politics, which is more concerned with personalities, soundbites and the workings and structures of policymaking rather than its goals. 

The unimportance of outcomes: climate change

Trevor Jackson writes:

Despite all the disasters, all the models, and all the conferences, in 2022 there were at least 119 oil pipelines in development around the world, plus 447 gas pipelines, 300 gas terminals, 432 new coal mines, and 485 new coal power plants. As the historian of science Jean-Baptiste Fressoz showed ..., despite the vast quantities of talk and money invested in producing a technological “energy transition,” last year the world burned more coal and more wood than ever before. Trevor Jackson, How to Blow Up a Planet, 'the New York Review', dated 25 September 2025

If we were serious about wanting to stop climate change, we'd have meaningful indicators of the climate and reward people for reaching target levels. In my work on Climate Stability Bonds, I envisage a range of ecological, physical and financial indicators, all of which would have to fall into an approved range for a sustained period, before our climate goal had been achieved. As it is, we focus almost exclusively on one single target: greenhouse gas emissions, and it's clear that we're failing even to reduce those. It's much the same with other social and environmental pathologies: by targeting the supposed means of reducing, for example, crime, or water pollution, or war, our policymakers can spend their time discussing institutional structures and funding arrangements or on internal infighting, rather than put in place incentives for others to get on with actually achieving society's desired outcomes. Politicians retain their power and avoid making difficult choices. One result?

Global atmospheric carbon dioxide compared to annual emissions, 1751-2022, Source

Targeting outcomes, as I advocate, would mean politicians' and officials' relinquishing some of their powers. Under a Social Policy Bond regime, they'd still articulate society's wishes, in conjunction with experts and the public, and raise the revenue for their achievement, but they'd contract out the actual achievement to a protean coalition of people and organisations who would have incentives to be efficient. "Society's wishes": these would be broad goals that are meaningful to ordinary people: goals such as a (relatively) stable climate, or sustained world peace. It's unlikely that governments will take the lead in this. I now believe that it's up to philanthropic individuals and foundations to fund something like a bond regime, and to be prepared to let the market for the bonds allocate those funds in ways that optimise efficiency. 

Efficient payment systems and cascading incentives

A question recently asked of me: once Social Policy Bonds have been issued, how will people working toward the targeted goal be rewarded in proportion to their contribution to the goal's achievement? 

The perceived problem is that some people working toward the goal may not own any bonds, so would not gain anything from their efforts. My thinking is that the bonds would lead to the tacit or explicit creation of a new sort of organisation, comprised of bondholders, and possibly with no fixed structure or composition. This body's raison d'etre - its sole objective - would to achieve the targeted goal as quickly and efficiently as possible. Remembering that the social or environmental goals best suited to a Social Policy Bond regime are those with a decades-long perspective, the body of bondholders would, as a priority, try to identify those activities, organisations or individuals that appear to be the most promising. Existing organisations working to bring about nuclear peace, for example, might try to convince the body of bondholders that they deserve some of the bondholders' funds. They would of course be competing with other existing or new organisations for those funds. So, those working efficiently to achieve the targeted goal would benefit indirectly from the bonds; bondholders would contract some of the work necessary to achieve nuclear peace to these organisations, who might in turn subcontract out some of that work, and so on. Incentives would cascade down from the bondholders to whomever does the actual work, who need not, and probably would not be bondholders themselves. The bonds, in short, would supply incentives to create an efficient payment system, which is just another aspect of achieving the targeted goal as quickly and efficiently as possible. 

All blog posts in one pdf file

All posts on this blog are now downloadable as a - long - pdf file from here. Posts began in December 2024. The file is about 1590 pages long and includes posts up to yesterday, 21 August 2025. 

Creating countervailing coalitions

Max Wilbert writes: 

As the climate crisis accelerates, as the 6th mass extinction spirals further, as chemical pollution reaches record levels day after day, as our overshoot predicament worsens, as more land is paved and more wild places bulldozed, bank accounts continue to rise. We — that is, anyone with a retirement or investment account, and anyone who cheers when the economy booms and groans when it falls — have become business partners in the apocalypse. We’ve Become Business Partners in the Apocalypse, Max Wilbert, 'Counterpunch', 21 August 2025 

We are, effectively, all part of a coalition that has a vested interest in an economy that takes no account of things that are not, or cannot, be measured: the environment and social cohesion, most importantly. Regulation can help, but it's usually too late and is itself influenced by powerful players in the economy, often with the goal of resisting changes that, while benefiting society as a whole, would diminish their income or influence. 

Social Policy Bonds could be a way of creating a countervailing coalition, with goals that explicitly and inextricably linked to societal and environmental well-being. By rewarding the achievement of, say, a cleaner environment they would channel funds into that goal and away from activities that currently pay well, but have little, no or negative social benefit. It's not about raising the incomes of those currently engaged in cleaning up the environment - though they would probably do that, at least at first: it's also about raising the level of resources pumped into improving the environment. There are hard-working organisations that are dedicated to improving our environment, but they operate at too small a scale and are not rewarded in ways commensurate with their efficiency - not financially, that is, and financial resources are necessary: simply, more funding means that could do more. By applying the Social Policy Bond concept to the environment we could create a coalition with a shifting cast of characters, dedicated to the long-term improvement of human, animal and plant life. The bonds would encourage diverse, adaptive approaches, all with a decades-long perspective, to the targeted environmental goals. The way the bonds work would ensure that only the most promising approaches would be pursued, while failing approaches would be terminated. 

Planet Pay for Slay

Applying the Social Policy Bond concept to war would go some way to offsetting the current system in which arms merchants and others are richly rewarded. World military expenditure in 2024 reached $2718 billion. But, regrettably, financial incentives to keep conflict going aren't limited to suppliers of weapons. Strategy Page writes about the Palestinian Authority's (PA) Pay for Slay program, which the US is trying to end: 

Last year [2024] the PA continued using its Pay For Slay program to reward Palestinian terrorists. Since October 2023, the PA declared nearly 10,000 imprisoned Palestinian and Hamas terrorists as eligible for Pay for Slay money. The PA also recognized an additional 39,000 families of dead terrorists as eligible for Pay for Slay payments. While the PA agreed to the American demands, it is believed that the PA would seek to find a way to make the payments anyway. ... The most recent payment totaled $142 million for 738 Palestinian terrorists. That averages $193,000 per terrorist. Information Warfare: Pay For Slay Forever, Strategy Page, 8 August 2025

We now also have the 'gamification' of war whereby, under a scheme dubbed Army of Drones: Bonus, Ukrainian military units can earn points for each Russian soldier killed or piece of equipment destroyed. By contrast, few global resources are committed to the prevention, management, or resolution of the world's most prevalent wars, almost all of which take place in poor countries. Nor, in relative terms, is much spent on peacekeeping and post-conflict reconstruction. The annual budget for UN peacekeeping is about $5.6 billion. Preventive diplomacy missions cost only a tiny fraction of this amount: the United Nations Department of Political and Peacebuilding Affairs, which leads the UN's preventive diplomacy and conflict prevention work, operates on an annual budget of approximately $80 million. World Peace Bonds, about which I've written in a short piece here, and in my book, just published would be an attempt to redirect the market's incentives and efficiencies into preventing and ending conflict. With more efficient conflict reduction, it's likely in my view people would be more willing to put more resources into it. Of all the many urgent social and environmental problems that we face, I now believe that conflict and in particular the threat of nuclear conflict, is the biggest threat to humanity. 

Market Incentives to End War: ebook now available

My book Market Incentives to End War: World Peace Bonds, is now available as an ebook at Amazon. It is short, at about 24000 words. A softback printed version should be available soon. I will make pdfs of the chapters available at SocialGoals.com for no charge, but if you would like to support my work please consider buying the ebook or the printed version when that becomes available.